Executive Summary-

As the number of Active Internet Users continues to surge in India (currently standing at 52
million ), Internet as a medium is fast evolving not only into a compelling medium but also a highly
1

efficient media vehicle for marketers (Source: I-Cube 2009 – IMRB’s annual syndicated study on
Internet in India). This coupled with the challenges to stand out using other available media, calls for
the need to source creativity and innovation with Internet as backbone.

Internet has enabled various new dimensions that allow marketers reach target segments in the most
measurable, interactive and more essentially, cost-effective ways. While advertising on the Internet
knows no geographic boundaries, technology is already available to help marketers focus only on
specific markets and target segments. With so much on platter, inevitably Internet is a medium to stay
and not wither away. Taking that into perspective, the purpose of the report is to take a deep-dive
into the Online Advertising scenario in India. Online Advertising in India is estimated to have
reached Rs. 785 crores for FY 2009-10 of which, Text Advertisements accounted for Rs. 368 crores.

The study also reveals that display advertisements contribute Rs. 417 crores to the overall figure, as
predicted in our previous reports. Display Advertising continues to surge, registering a growth of 22%
over previous year’s figure of 325 crores. In FY 2007-08, Display Advertising was estimated to be Rs.
235 crores, registering growth of 77% in two years.

Online Advertising is expected to grow by 26% in the year FY 2010-11 over FY 2009-10.
Interestingly though, the study reveals that big spending veteran advertisers like BFSI continue
to repel away from Display Advertising (from 25% in FY 2007-08 to 17% in FY2008-09 and 13%
in FY 2009-10).

Industry vertical wise, Auto, BFSI, Online Publishers, Travel, IT & Telecom are the biggest
online spenders and they continue to remain so. FMCG companies are one of the biggest advertisers on
Television and other conventional media, but they are relatively new to Online Advertising.
It is expected that FMCG’s online ad spend will gradually increase over the next couple of years.
Education appears as another vertical likely to grow in future.
 METHODOLOGY
Methodology-

The results of the report are arrived at by conducting primary as well as secondary research.
Report follows the financial year and details information captured from respondents for the year
FY 2009-10. Estimates based on inputs as provided by industry players are for the year FY 2010-
11 (April 2010 – Mar 2011).
Internet users: Structured face to face quantitative research was conducted with 800 individuals
across among 15 cities during I Cube 2009, a syndicated product of eTech, IMRB International.
Secondary research was done to understand the structure and dynamics of the Online Advertising
in India. Information from various published resources was used to perform a data validation
check.

Information collected from secondary as well as primary research was thoroughly analyzed in
preparing the report.

Additions in this round of report:

Online Advertising report always updated to encompass changing market dynamics. Details of
new features included in this report include:
• Market sizing and advertiser segment analysis for Text Ads is added for the first time
• Travel industry is added separately as advertiser segment
• IT & Telecom industry is now analyzed as separate advertisers
• Advertisement on Social Networking sites is estimated
Online Advertising-

Online Advertising is a form of marketing communication on the Internet, intended to persuade

an internet user (viewers, readers or listeners) to purchase or take an action upon content
displayed on a website (or webpage) in relation to products, ideals, or services.

One of the most intriguing advantages of online advertising is its capability to immediately publish
information and content that is not limited by geography or time. This coupled with the
ability to tweak or customize the advertising content and locations, makes it an efficient medium.
Online advertising can be classified in two types-

• Text Ads - Advertisements made up of text (displayed largely as sponsored links on search
engines), which are backed by hyperlinks which when clicked on, takes the potential
customer to the advertiser's web site. Text ads are generally lower in cost than banners, as they
are simple and a lot of web sites accept them.

• Display Ads - Ads that are placed at various points on a web page that typically contain
text, logos, photographs or other images. Banner ads are priced slightly higher than text ads are
known to have higher effectiveness.

Evolution Model-

Online ads have evolved from CPI (Cost Per Impression) or CPM (Cost Per Mille-1000
Impressions) to CPC (Cost Per click) to CPA (Cost Per Acquisition) and this transition is observed
among advertisers. Following illustration depicts how this shift from CPC to CPA is observed.

Veteran advertisers such as BFSI, Auto, and Travel are gradually moving towards Performance Based
advertising.
Market Size-
Total Online Advertising market of India is estimated at Rs. 785 crores for the year 2 FY2009-10
and is expected to grow to Rs. 993 crores in year FY2010-11. Market is currently dominated by
Display ads and is expected to remain so for the next year.

Market size for Text3 Advertisements is calculated for the first time in this round of the report.
Earlier two rounds of the report had market size for Display Ads only. Overall Display ad market
is expected to grow by 28% while Text is expected to grow by 26% in FY 2011.
Display ads-
Total Display advertising market of India in year 2009-10 is estimated at Rs. 417 crores and is
expected to grow by 28% to reach Rs. 534 crores in year 2010-11. Relatively new advertisers
such as FMCG and Education sector are spending more on Display ads than Text ads.

Travel, BFSI, auto & Telecom continue to remain biggest display ad spenders in year 2009-10
and will remain so for year 2010-11 as well. Advertiser proportion for Display ads is likely to
remain more or less similar for year FY 2011.

A sample of Banner ad is shown below-

Banner ads can range from being simple pieces of HTML code, to being multimedia objects
developed using technologies like Java, Shockwave and Flash and also having video, sound and
animationto maximize effectiveness.
Text Ads-
Total Text advertising market of India in year 2009-10 is estimated at Rs. 368 crores and is
expected to grow by 25% to reach Rs. 459 crores in year 2010-11. BFSI, Travel and Online
Publishers - the top three Text advertisers of year FY 10 are expected to continue to lead text
based advertisers in FY11 as well.

A sample of text ad is shown below-

Revenue Models-

The three most common ways in which online advertising is purchased are CPM, CPC,
and CPA.

CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for
exposure of their message to a specific audience. "Per mille" means per thousand impressions, or
loads of an advertisement. However, some impressions may not be counted, such as a reload or
internal user action.

CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the
advertisers website.

CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement
or website (usually used with pop-ups, pop-unders and interstitial ads.

CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user
clicks on their listing and is redirected to their website. They do not actually pay for the listing,
but only when the listing is clicked on. This system allows advertising specialists to refine
searches and gain information about their market. Under the Pay per click pricing system,
advertisers pay for the right to be listed under a series of target rich words that direct relevant
traffic to their website, and pay only when someone clicks on their listing which links directly to
their website. CPC differs from CPV in that each click is paid for regardless of whether the user
makes it to the target site.

CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is
common in the affiliate marketing sector of the business. In this payment scheme, the publisher
takes all the risk of running the ad, and the advertiser pays only for the amount of users who
complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for
banner advertisements and the worst type of rate to charge as it ignores any inefficiency in the
sellers web site conversion funnel.
Internet users in India-
Internet in India has significantly grown in the past decade. According to I-Cube, IMRB’s annual
syndicated study on Internet in India, in September 2009, India had 52 Million active internet
users.

It was estimated that in the year 2007-08, Ad monetization per internet user on display ads was
Rs. 50 (USD 1.2) which increased to Rs. 65 per Internet user in year 2008-09.
In year 2009-10, Display ad industry is estimated to be Rs. 417 crores and Text ads is Rs. 368
crores; hence online Ad monetization4 per internet user for India in the year 2009-10 is Rs. 58
for Display ads and Rs. 52 for Text Ads.
This indicates that online ad monetization per internet user has not grown significantly in year
2009-10 as compared with previous year.
Industry Trends-
This section gives detailed view about various advertiser segments.

BFSI-
BFSI sector has been one of the long standing advertisers on Internet. BFSI verticals covers all
advertisers from financial companies including Banks, Non-Banking Financial companies,
Insurance companies, Asset Management Companies, Credit rating agencies and so on.

This sector contributes most towards Text as well as Display ads. However during the economic
slowdown, it was the most affected as well, and it reflected in their online ad spent.
As an advertiser, BFSI has evolved from a display advertiser to a performance based advertiser.

It is one of the first advertisers to adopt performance based advertisements and performance
based payment mechanism (such as pay per activations). It is estimated that BFSI will continue
to have display ads but is likely to have more of Performance based and Text advertisements in
future.

In FY 2010 (Apr’09-Mar’10) BFSI contributed around Rs. 89 crores towards Text5 and Rs. 52
crores towards Display ads. This totals to Rs. 141 crores for year FY10 and is estimated to grow
to Rs. 177 crores in year FY11. Effect of economic slowdown is reflected in ad spent by BFSI
segment. Display ad spent for FY09 was down to Rs. 52 crores from Rs. 55 crores for the year
earlier.
AUTO-
Auto industry is another big contributor to online ads. The industry is primarily uses display
advertising. Hit by the economic slowdown, auto industry’s online ad spend didn’t grow much
during FY08 and FY09. However, with economy back on track, it is expected that this segment
will continue to remain one of the biggest online advertisers.

Auto vertical covers all advertisers from the automotive sector including OEM manufacturers,
cars and passenger vehicle manufacturers, tyre manufacturers etc.

Display advertising for the Auto industry has risen from Rs. 24 crores in FY08 to the current
level of Rs. 39 crores for FY10. This is expected to reach Rs. 62 crores for FY 2011. In other
words, the there has been a growth of 63% over a period of 2 years. It is estimated that the Auto
industry spent Rs. 17 crores on Text6 ads in FY10 which is expected to grow by 65% and reach
Rs. 28 crores for FY11.
TRAVEL-

Travel industry is another big online advertiser. Added as separate advertiser segment this year,
it is estimated that its Display ad spend for the year FY10 was Rs. 59 crores and is expected to
grow by 14% to Rs. 67 crores for the year FY11. Text8 ad spent on other side is expected to
grow from Rs. 74 crores in FY 10 to Rs. 90 crores in FY 11.

Like BFSI and Auto advertisers, Travel is one of the evolved online advertisers, which is
gradually moving from display to performance based advertising.

ONLINE PUBLISHERS-
Online advertising for publishers is defined as all advertising emerging from various websites
related to gaming, email, portals, matrimony, job space etc.

Advertising spend of online publishers from this round does not include ad spend by Travel and
tourism portals as it is now analyzed as separate advertiser segment. During FY10 online
publishers are estimated to have spent Rs. 37 crores towards display and Rs. 58 crores towards
Text ads which adds up to Rs. 95 crores. This spend is expected to grow to Rs. 122 crores
(Display Rs. 40 crores and Text Rs. 72 crores) in FY11 i.e. a 28% increase.
IT- INFORMATION TECHNOLOGY-

Information technology is includes all those products and services for computing platforms
including packages / customized software and services, PCs, laptops, servers, PC accessories,
broadband, data cards and Internet services.

TELECOM-

Telecommunications is one of the biggest display advertisers. Broadly speaking, telecom related
products and services include Pre Paid cards, mobile services, landline services, mobile phones,
PDAs etc.

FMCG-

FMCG, one of the biggest advertisers on Television, is so far one of the lowest spenders on the
Internet. However, slowly, this industry vertical has started realizing importance of Internet as an
advertising medium and leading FMCG companies have started advertising online. This new
entrant is expected to spend about Rs. 17 crores on Text & Rs. 39 crores on display advertising
in year 2010-11.

For our analysis, the FMCG is includes advertisers from consumer goods such as soaps,
detergents, powder, cosmetics, personal care, beverages, processed food, edible oil etc. Being
new entrant in online media, FMCG is likely to remain mainly as a Display advertiser in current
year, as well as in near future.
CONSUMER DURABLES-

All consumer durable items like Air Conditioners, Refrigerators, TV, Audio systems and
excluding IT and Mobile products are categorized as Consumer durables in our analysis. This
category is also mainly a display advertiser.

During year FY10, Consumer durable advertisers are estimated to have spent Rs. 34 crores on
Display which is almost double the amount they spent in FY08 and Rs. 10 crores on Text13 ads.
The ad spends of display ads have been growing steadily over the years, and are pegged to touch
Rs. 48 crores by the year 2011.

EDUCATION-

Education sector is one of the fastest growing advertisers on Internet. This segment has seen
growth of more than 200% in ad spent from FY08 to FY10.

Predominantly a display advertiser, Education vertical includes all education related ads such as
those by Educational institutes, coaching classes, schools, colleges and universities etc. It is
estimated that the segment will spend Rs. 35 crores towards Display and Rs. 18 crores in Text
ads in FY 2011.
ONLINE MARKETING ACTIVITIES-

Social media marketing has been on the rise, as one of the prime online marketing activities
among online advertisers. It is observed that email marketing is done by companies with the help
of their internal databases.

Spending on email marketing campaigns is not as common, as compared with spending on

Social Media marketing. Other conventional Online marketing activities such as SEO, SEM
Advertising are still the most common forms of online marketing among advertisers

ADVERTISING ON SOCIAL NETWORKING-

Social networking sites (SNS) have gained large user base in the past two to three years. Large
numbers of advertisers are now moving towards SNS for their marketing activities. These could
be branding activities like “Follow the Company” on a social networking site or it could be
advertising on the same.

It is estimated that about 11% of total online advertising was done on social networking sites in
year 2009-10 and is expected to grow to 18% in year 2010-11.
ONLINE ADVERTISING VIEWED BY INTERNET USERS-

From the above data, it can be seen that around two thirds of the active Internet users have seen
sponsored ads and about half have clicked on them. On the other hand, Viral Marketing Ads
have the minimum viewership and are the least clicked.

Thus, sponsored links in search engines have the highest Conversion ratio from Seen to Click
followed by Streaming Videos. On the other hand, Pop-Ups have a very low Clicked to seen
ratio. The main reason for that is that people while surfing do not prefer unwanted intrusion.
They treat the web space as their personal and any attempt to interfere in that space does not go
down well with the people. But the sponsored links in search engines always display
advertisements relevant to the search made by the people. Hence the propensity of clicking those
ads increases.

Also, Viral Ads, although known to create a lot of buzz have the least seen to clicked ratio. They
are mostly seen as a novel and creative video/ad rather than an ad. The attention span is very low
for these ads and do not result into click conversions.

Ad Types like to see-

The right type of ads have the best seen to click conversion ratio. And it is the placement of the
ads which have the highest impact. Customers get most influenced by ads that are relevant to the
context that they are looking for on the Internet. It is only those ads which are noticed the most
and thus have the highest visibility.

Sponsored links in search engines have the highest demand followed by Email Ads. This is
because the ads are relevant to the other contents on the web page. Streaming Videos have a low
viewership demand because they usually do not have any relevancy to the content of the web
page. So do the Viral Ads, which are seen more as an entertaining video rather than an ad.
A majority feel that online ads are informative and interesting but click them only when they are
relevant. This is because online ads are often intrusive and distracting. Thus care should be taken
while deciding the placement of the ad. These ads also help users find the right products they are
looking for and to some extent, influence their buying decision.
CHALLENGES-
In India, online advertising faces some challenges before it can achieve its potential. One of the
reasons commonly cited by many, is the reluctance of advertisers to spend heavily in a medium
whose ‘Reach’ has yet to reach a significant level of the total population. ‘Reach’ signifies
number of unique visitors exposed to a given medium. As per ICube 2009, with 78 million
claimed Internet users, ‘Reach’ of Internet users in India is approximately only 8%. In addition,
unavailability of proper infrastructure in rural areas for Internet facilities is another major
concern for advertisers, and progress in terms of Internet penetration is by far, limited. On the
other hand, Television has reached the masses and advertisers are easily able to reach their target
audience quickly, albeit at a much higher cost.

Existing online advertisers are especially keen to understand the return on investment for a given
online investment. Clients are looking beyond page views, page clicks and other existing metrics
as CPC, CPI, CPA etc. in other words, a major challenge that web publishers face, is their ability
to convince why an advertiser must advertise on the publisher’s website (and not on any other).
Along similar lines, many feel that very few companies are talking about brand metrics, accurate
targeting as well as quality and type of audience.

Also, existing online advertisers face another challenge with regards to sustaining the interest
level of an online advertising campaign. In fact, some advertisers have launched successful
online campaigns to begin with, but have been unable to sustain interest level for an extended
period of time.

Besides these challenges, traditional high spenders in advertising like FMCG companies have
not invested any significant money in online advertising. Building appropriately tailored
solutions for companies from the FMCG sector, will be critical for publishers to attract more
advertisers and help growth of the online advertising industry.

Also, advertisers seem to lack knowledge about the online medium and how it could be
leveraged effectively. As per some, the online medium evolves so fast that before some
measurement standard can be set, some other measure becomes the norm and replaces the earlier
standard. Essentially, many feel that measurement will play a key role for online advertising
medium to succeed. A common currency would be required by both advertiser and publisher to
use the medium effectively.
Ethics-
Online advertising encompasses a range of types of advertising, some of which are deployed
ethically and some are not. Some websites use large numbers of advertisements, including
flashing banners that distract the user, and some have misleading images designed to look like
error messages from the operating system, rather than advertisements. Websites that unethically
use online advertising for revenue frequently do not monitor what advertisements on their
website link to, allowing advertisements to lead to sites with malicious software or adult
material.

Website operators that ethically use online advertising typically use a small number of
advertisements that are not intended to distract or irritate the user, and do not detract from the
design and layout of their websites. Many website owners deal directly with companies that want
to place ads, meaning that the website linked to by the advertisement is legitimate.

The overuse of technologies like Adobe Flash in online advertising has led to some users
disabling it in their browsers, or using browser plug-ins. Many sites use centralized advertising
services whose advertisement may be blocked as a side effect of security and privacy measures,
because the services require JavaScript and cross-site requests to function, while such features
are often not necessary to use the sites and are a potential source of vulnerabilities.
Some companies perform customer engagement studies in online marketing to insure consumer
satisfaction, through the use of online compliance centers, building and deploying fraud
detection tools, while inspecting websites and publishers to insure website pages offer the
highest degree of information security and compliancy with Can Spam Requirements.
Emerging Trends in Online Display Advertising Market-
Online advertising avenues include various web-based options using which brand and marketing
messages get delivered. These options include search engine marketing, banner ads, rich media,
digital video, email marketing, lead generation, classifieds and sponsored links. Search engine
advertising comprises a high proportion of the overall options due to efficient search engine
avenues. Online display advertisement comprising banner ads, rich media, digital video and
sponsored links has relatively large number of participants but enjoys a limited share in the total
spends. There are, however, inherent differences in these options. Online display advertisement
provides a marketer an option to generate awareness which in turn will result in brand-building
in long run. Meanwhile through search advertising a marketer can generate leads in a short span
of time. Search engine marketing provides a distinct advantage of enabling a marketer by
providing complete control over a campaign with selection of keywords and the ability to place
the advertisements on the selected websites while the same does not hold true for online display
advertisements.

“Performance based” online display advertisements-

The yardstick to measure the effectiveness of online advertisement has evolved from mere
number of impressions to the customer acquisitions leading to performance based
advertisements. This trend is very much apparent in India where in pricing for online advertising
campaigns are frequently measured against the performance. In some of the recent examples
seen, the display advertising is evolving to deliver performance and leads similar to the ones
delivered by search marketing. There are transactional banner systems5 emerging which enable
users to purchase products and services via banner without visiting the vendor‟s website. This
service has generated better response rates compared to the traditional banner for some of the
clients.

Integrating Internet advertising in marketing campaigns-

Recognizing the possibility of using Internet as an effective tool for targeting niche audiences,
innovative perspectives are being practiced by established and traditional institutions. During the
recent US Presidential elections, Barak Obama's team ensured that the campaign had a strong
presence on social networking sites such as Facebook, MySpace and LinkedIn. Through such
presence, Barak Obama ensured he maintained a two-way interaction with his electoral.

In the recent general elections in India (early 2009), many Indian politicians considered Internet
as a useful platform for interactive political communication especially with youth. Indian
National Congress party used sites like YouTube and Facebook to execute web-based social
marketing campaigns. With 50 Million Internet users in Urban India and majority of them in the
age group of 18-24 years, Internet was found to be an effective tool to engage with them.
Bhartiya Janata Party (BJP) launched a website LKAdvani.in for its prime ministerial candidate
Lal Krishna Advani. Further, both the key parties (Congress as well BJP) teamed up with top
Internet companies for spreading their campaign messages over the Internet.

Apart from the political general elections, several brands have started integrating Internet as part
of their communications. The key ones to do so in 2009 include Tata Tea, Nike, Nokia, Perk,
Vodafone, Airtel, etc.

Immersive formats for Internet Advertising-

The advancement in the technology is leading to the development in the area of online display
advertisements allowing display advertisements to become more immersive, interesting and
useful. Thus combined with the traditional advantage of delivering contextual messages at the
right time, with the emerging technologies, the marketers can now allow their target audience to
indulge into an in-depth brand experience. Thus with the advancements in the space the

Expandable Banner-

Expandable banners which use a new technology that allows the banner to expand when the user
rolls over them. These banners are fresh, exciting, compelling and highly interactive to the
viewer. They can deliver a story with a mouse over or give an enticing hint to what users can
expect when they click on the banner and led to a micro-site. Most of the portals have already
adopted these for inventory on their home pages.

Augmented Reality (AR):

AR will offer different various advantages for different forms of online display advertisement in
future. The goal of augmented reality is to add information and meaning to a real object or place.
Unlike virtual reality, augmented reality does not create a simulation of reality. Instead, it takes a
real object or space as the foundation and incorporates technologies that add contextual data to
deepen a person’s understanding of the subject. Augmented reality is designed to blur the line
between the reality the user is experiencing and the content provided by technology. Augmented
reality adds graphic, sound and smell to the virtual world as it exists in the real world.

Technological development in the field of AR is leading to the acceptance of this technology in

various marketing activities. Of these, usage of AR is predominantly witnessed in the field of
advertising. Large corporate like P& G, IBM have used AR in their latest advertisements6. IKEA
PS, dealer in household furniture has offered mobile augmented reality solutions which enable
users to imagine how this furniture would fit in their houses.
FUTURE OF ONLINE ADVERTISING IN INDIA-
With Internet penetration ever increasing, future of online advertising is promising. Broadly
speaking, following key drivers will enable growth of this medium – Rising broadband
penetration, emergence of social media and video ads, increased investments by various
companies as well as positive macroeconomic situation in India.

Emergence of High Speed Broadband connectivity is a prime driver for online advertising to
increase. Traditionally, we have observed online text advertisements or display advertisements
(without much animation). However, with rising broadband penetration, advertisers can target
end users with video ads, which are similar to television advertisements. Moreover, the cost of
hosting a video ad on the Internet is significantly lower than that of a television advertisement.
Besides, the cost of broadband plans has been decreasing consistently and is becoming
affordable for an increasing number of Internet users.

With rising broadband availability, video ads or ads that require additional bandwidth will be
more commonly seen. These are comparable with television advertisements, albeit at much lower
advertising costs. Also, with a plethora of small and medium businesses mushrooming in India,
companies will utilize online advertising in a much larger way, rather than relying on traditional
forms of advertising, which might not be cost effective either.

Social Media has captured the imagination of over 500 million people globally. In fact, India has
also seen rise in number of Internet users, thanks to social media itself. Online advertising has
therefore been positively influenced by social media. Also, with people pressed for time, they
spend more time on social media to interact with friends, colleagues and relatives. In fact, as per
IMRB International’s web audience measurement product WAM, across India, the time spent on
social media is second only to that spent over email. Various social media applications like
gaming, friend updates, chat etc have been instrumental in users spending a great deal of time on
social media websites.

Additionally, with social media, companies are able to create buzz about their products and
services. People can interact with the brand and get a feel of the product or service on offer. In
addition, people can get immediate answers for their questions in real time, either through brand
owners themselves or even through end users who have experienced the brand, either positively
or negatively. With this in mind, advertisers are now gradually awakening to the opportunity
presented by social media. Effective engagement with consumers is the need of the hour for
many organizations. The Internet will enable this and moreover, at significantly lower costs.

Increased investments from the FMCG sector will be another important driver for increased
online advertising expenditure. FMCG companies are traditionally huge spenders as far as
marketing and advertising of products are concerned. Currently, Indian FMCG companies spend
a majority of their advertising budgets on traditional advertising media i.e. television and print
advertisements. However, with emergence of social media, it is likely that FMCG advertisers
will be keen to exploit the online advertising medium.

As per ICube 2009 (Annual syndicated study by IMRB International on Internet users), the
number of claimed Internet users has risen to 78 million across India. Therefore, with ever
increasing number of Internet users, FMCG advertisers have now realized that it is merely not
enough to advertise on television or print only. While television and print ads can increase
awareness of a certain product in a very quick manner, these media are unable to engage the
consumers actively. In addition, television as well as print advertising involves sizeable costs
which smaller organizations might not be able to sustain. Internet on the other hand, enables
immediate interaction with end users and helps bridging this gap in a very cost effective manner.

Companies from the BFSI, Automotive and Travel sectors have been early adopters of online
advertising. Having tried and tested various advertising models as pay per click, pay per
pageview and so on, companies belonging to these industries are now keen on performance
based advertisements, where they would pay publishers for the sales generated or at least sales
enquiries for a given product or service.

Internet would become an extremely important Sales medium, while television and print
media would be used for increasing awareness primarily. Companies would use television, print
and billboards for creating buzz about their brands, products and services. Internet, on the other
hand, will enable one to know intricate details, features, and specifications of the
product/service. Further to interact with customers, Internet can play a pivotal role by engaging
and helping customers know benefits of the companies’ products or services, as well as
advantage or disadvantages, if any.

In addition, Internet as a medium is progressively targeting required end users in an effective

manner. In other words, online advertisements have evolved to a certain extent, whereby they
can be placed on strategic websites to attract desired target group.

In sum, with a rising Indian Internet user base as well as the advantages that online advertising
offers, it will be increasingly difficult for advertisers to neglect the Internet as an advertising
medium. In addition, it is becoming very important for advertisers to build an emotional connect
with consumers. Internet would go a long way in enabling this bond, which bodes well for the
online advertising industry as a whole.

Overall, with the macroeconomic situation in India also upbeat, Indian companies as well as
multinational companies (MNCs) are likely to spend more on their marketing and advertising
budgets. This certainly will trickle down to the online advertising spends of various companies.