Kapil Ohri
Digital

Will paid search overtake display advertising in 2010?

Though Starcom MediaVest Group forecasts that paid search will become bigger than display advertising spends this year, digital media experts have different views on this

If the digital ad spend forecast in the Global Media Intelligence report by Starcom MediaVest Group (SMG) and eMarketer (a digital marketing research firm) is to be believed, paid search will surpass display ad spends this year in India.

By the end of 2010, the total digital ad spends --including display, search, mobile and social marketing -- in India are expected to reach Rs 1,021 crore. Of that, paid search spends would contribute about Rs 470 crore (46 per cent share); while display advertising spends would be about Rs 420 crore (41 per cent). Mobile marketing and social media advertising spends could be around Rs 124 crore and Rs 9 crore, respectively, this year, as per SMG's estimates.

Will paid search overtake display advertising in 2010?
Will paid search overtake display advertising in 2010?
Will paid search overtake display advertising in 2010?
Will paid search overtake display advertising in 2010?
The prediction is based on interactions with digital media owners and advertisers. In the report, paid search comprises text ads -- served on the pay-per-click (PPC) model -- on the search results pages of various search engines and the Google content network. Banner, video, rich-media ads and display ads served via Google content network are segmented under display advertising. Mobile advertising includes SMS marketing, mobile banner ads and branded mobile applications. Branded social media applications, games and social ads are considered under social media advertising.

Interestingly, the forecast states that the gap between paid search and display advertising would widen further. Paid search spends are expected to grow at a rate of more than 45 per cent, as compared to 20 per cent growth in display ad spends in the next two years.

By 2012, the total digital ad spends may reach around Rs 1,714 crore. Of this, paid search spends would be around Rs 815 crore (47 per cent share); while online display ad spends would be Rs 625 crore (36 per cent).

"In addition to India, in all markets that SMG has studied, search is growing faster than online display and is actually significantly larger in the total digital ad spend pie," points out Pushkar Sane, chief digital officer, north and south Asia, Starcom MediaVest Group.

He adds, "We predict that very few brand campaigns in the future will go live without a search component. Additionally, marketers in India now understand that their consumers are searching on a 24x7 basis; and hence, many of them are taking an 'Always On' approach to search."

Though SMG expects that paid search marketing spends will outdo display advertising this year, various digital media planners and professionals have different views on this.

"Currently, paid search could be about 35 per cent of total digital ad spends in India; while majority of the digital ad spends (55 per cent) still belong to display advertising. The rest is divided between mobile and social media marketing. This scenario will not change this year; it may take a few more years for that to happen in India," MP Singh, media group head, Lintas Media Group, tells afaqs!.

Even Suresh Reddy, chairperson and chief executive officer, Ybrant Digital, the company which owns various online ad-networks, believes that display advertising will continue to dominate the digital media ad spend pie for some more time, before paid search overshadows display eventually.

Reddy reasons, "Large traditional advertisers, who are in the mode of experimenting with the digital medium, usually prefer to allocate their first major chunk of money on display advertising, as compared to performance-driven campaigns. Thus, paid search marketing, which comes under performance-led campaigns, would get a lower share of spends, as compared to display advertising, in the near future."

However, Rajnish R, co-founder, Althea Systems (the company which runs a social video browser named Shufflr.tv) agrees with the SMG forecast.

He says, "SMG's estimation seems valid, and search will overtake display this year. A lot of small advertisers, who market their products and services through search engines like Google, do not get noticed or counted by media planners, who roughly estimate the total digital ad spends based on corporate spending."

He adds, "In-fact, 30-40 per cent of Google's ad revenue -- where majority of the search marketing money gets routed -- arrives from small advertisers such as travel agents, restaurant owners and anti-virus software sellers."

Rajnish also believes that the dominance of both search and display advertising in the digital ad spend pie may get challenged by social media in future. According to him, "Social media will eat away the share of the search engine marketing platform (Google), because online minutes spent on social media sites would be much more than the time spent on searching."

He adds that the openness of ad platforms would lead to social media taking away share from display advertising. "Social media has made display advertising almost self-serve. This allows the advertiser to use Google analytics data to track the funnel down to conversion and change campaigns very quickly."

For the record, the SMG report estimates that mobile marketing and social media advertising spends could be around Rs 240 crore and Rs 37 crore by 2012.

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