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Online banner ads to be worth Rs 350 crore in 2008-09: IAMAI

By afaqs! news bureau , afaqs!, New Delhi | In Digital | August 27, 2008
Online banner advertising is expected to grow by 49 per cent from 2007-08

The Internet & #BANNER1 & # and Mobile Association of India (IAMAI) has estimated the size of the online banner advertising market in 2007-08 to be Rs 235 crore; it expects it to grow by almost 49 per cent to Rs 350 crore by the end of 2008-09. This study is part of a report released by the IAMAI and IMRB International on the online banner ad market in India.

Of the categories of advertisers, the BFSI (banking, financial services and insurance) category makes up 25 per cent of the banner advertising pie. This share is expected to grow to 26 per cent by the end of the year. The share of the online publisher category is 25 per cent and expected to come down to 23 per cent. The share of the IT and telecom category is expected to remain constant at 13 per cent.

The other major categories are auto, FMCG (fast moving consumer goods) and consumer durables. The education category is expected to show the fastest growth from 4 per cent to 7 per cent. This is possibly because this category targets the youth segment.

The report also shows that the online banner ad spend per Internet user is only about $1.20 (Rs 52.50), which could be $1.60 (Rs 70) by the end of the year. This figure is quite low as compared to global standards and shows that the ad spends in banner ads are not keeping pace with the growth in Internet users.

The low ad spend on banners could also be attributed to the increased spends in other forms of online advertising, such as social media. In the UK, the online ad spend per user is $188, and in the US, it is $143.

The report reveals that people are increasingly noticing online banners. In 2006, 56 per cent of the active Internet users clicked on an online ad. In 2007, this figure was 80 per cent. Computed on a base figure of 15.4 million, this implies that 12.3 million people clicked on an ad in 2007.

Further dissecting the behaviour of these users, the report shows that after seeing these ads, 41 per cent of the users looked for information on job sites, 35 per cent visited education and training sites and 27 per cent looked for information on investments.

Some of these ads were converted into purchases. Around 4.3 per cent bought hotels and holiday packages, 3.8 per cent acquired loans from banks and 1.4 per cent bought computers, laptops, printers or scanners.

Referring to the attitude of the Internet users towards online ads, the report reveals that 65 per cent of the users are less likely to buy a product after seeing an online ad. Around 65 per cent said they don't like clicking on online ads as they are distracting and 58 per cent said they usually ignore online ads.

The findings of the report are based on an annual survey of 65,000 individuals and 12,000 households in 30 cities in India.