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Online advertising market pegged to grow at 30% YoY in India

According to IAMAI, the online advertising market in India was projected to reach Rs 3,575 crore by March 2015, with search and display as top two contributors to the total digital ad spends in India

Online advertising market pegged to grow at 30% YoY in India

According to IAMAI, the online advertising market in India was projected to reach Rs 3,575 crore by March 2015, with search and display as top two contributors to the total digital ad spends in India

BestMediaInfo Bureau | Delhi | September 3, 2015

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The Internet and Mobile Association of India (IAMAI) believes that the year 2014 was the year of Internet and is of the firm view that Internet has reached an inflection point. The consolidated numbers taken out by IAMAI for FY2014 affirms the fact that Internet in India has now becoming inclusive, which augurs well for the industry and society at large.

The number of Internet users in India reached 302 million by December 2014, registering a Y-o-Y growth of 32 per cent over FY2013. The Internet in India took more than a decade to move from 10 million to 100 million and three years from 100 million to 200 million. However, it took only a year to move from 200 million to 300 million users. Clearly, Internet is mainstream in India today.

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Mobile Internet in India also witnessed significant growth rate. If the following chart is anything to go by, mobile Internet in India is set to grow at an exponential rate. India had 159 million mobile Internet users as on October 2014. Out of this, 119 million users were from urban India and the remaining 40 million were from rural areas. There has been a growth of 45 per cent from October 2013. Mobile Internet users reached 213 million by June 2015.

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The impact of Internet penetration has seen a huge spurt in digital commerce. The digital commerce market was valued at Rs 81,525 crore by the end of December 2014, and registered a growth of 53 per cent over 2013. According to IAMAI-IMRB estimates, the industry is estimated to grow further at a rate of 33 per cent and cross Rs 1 lakh crore by the end of 2015.

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Digital advertising has also been witnessing a steady growth. The online advertising market in India was projected to reach Rs 3,575 crore by March 2015 with a Y-o-Y growth rate of 30 per cent. The online advertising market was pegged at Rs 2,750 crore in March 2014. Search and display are the top two contributors to the total digital advertisement spends in India. Of the Rs 2,750 crore digital advertisement market, search ads constitute 38 per cent of the overall ad spends followed by display ads, which contribute 29 per cent and social media contributing 13 per cent of overall digital advertisement spends.

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IAMAI has also said that increase in local language content on the Internet will lead to a growth of 39 per cent in the current Internet user base. Rural India will be the primary driver of this growth (75 per cent) while in urban India, the growth will be 16 per cent. The local language user base is growing at 47 per cent Y-o-Y to reach 127 million in June 2015. IAMAI believes that the next set of Internet users will come from rural India and the availability of local language content on the Internet will be the key for the growth of the Internet industry in India.

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Data on social media users also reflect that the usage of social media in rural India has grown by an impressive 100 per cent during the last one year with 25 million users in rural India. On the other hand, urban India registered a relatively lower growth of 35 per cent with the total number of users at 118 million as on April 2015. According to IAMAI and IMRB estimates, there are 143 million social media users in India as on April 2015. The report also finds that the top four metros continue to account for almost half of the social media users in urban India.

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The digital industry is also buoyed by the fact that the digital payments industry is maturing at a fast clip. The digital payments industry grew at a rate of 40 per cent to reach Rs 120,120 crore by December 2014. The digital payment industry was pegged at Rs 85,800 crore in December 2013. The report finds that the top four metros – Delhi, Mumbai, Kolkata and Chennai – are approximately 60 per cent of the total digital payment gateway market size. Next four metros – Bangalore, Hyderabad, Ahmedabad and Pune – together contribute only 25 per cent to the total market size.

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