By Vipin Agnihotri
Internet advertising stood at Rs 215 crore last year (a 43 per cent growth over the previous year), but in my opinion it could grow more than ten-fold (to Rs 2,500 crore) by 2011. What’s more, mobile advertising is also going to grow from Rs 40 crore currently to Rs 500 crore by 2011. It is worth mentioning in this regard that for every Internet user there are five mobile phone users in India.
At this moment of time, there are three clear categories in Internet advertising that are drawing the attention of entrepreneurs, investors, and established agencies. It includes, mobile-related search and advertising, ad networks that aggregate advertisers and sites and play match-makers, and full-service agencies that do everything from search engine marketing to blog creation to online advertising.
Despite the hubbub in online marketing and advertising, it’s early days in terms of business models. For example, when one takes into consideration SMS advertising, one will find that most of the companies are “push-based”. In other words, they still need to be shoved to consumers rather than consumers ‘pulling’ such ads.
In my opinion, most of the companies associated with online marketing and advertising do not have a scalable business model, but despite that no one is going to argue with the fact that there is a plenty of interest in the Indian market.
On the other side of the coin, online ad networks seem more mature. Point to be noted here is that most of them don’t just have stable and growing revenues, but are profitable. Furthermore, since they can churn out quality work at much lower costs as compared to rivals abroad, they make attractive targets for foreign majors.
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