Analysis: Group M India Online Advertising Forecasts

GroupM, the media buying arm WPP Group Plc has released a comprehensive report on Indian media market and paints a very rosy picture for Indian advertising with a 20% year on year growth in 2008. All the categories are expected to show growth but the key takeaway for the online market is that not only the Indian Online market is expected to grow from 390 crores in 2007 to 624 crores in 2008 at the rate of 60% per year but also the share of Online advertising in the total advertising pie is expected to grow to 3% from the current 2%. While this may seem small at the moment but even online advertising in US is just 10% of total advertising pie. This report makes couple of interesting points

• Increase in advertisers’ spends on traditional media to maintain status quo and their willingness to look at new media (which also tend to be cheaper options) to create differentiation and grab attention
• Shift in focus from conventional target consumers (Housewife, aged 25-45 years), to include the Male and the Youth, who are the primarily being targeted through new mediums like Mobile and Internet, and Radio and Niche Publications.

This report also states that advertising growth in new media in India seems to have no effect on growth of advertising in traditional media quite unlike the US market but this arises because the Indian print media has not reached saturation like in the US but is still growing. Just a check PWC had came out with a report and calculated the Indian advertising market to be worth 270 crores in 2007 which Group M states to be 390 crores so the actual figures could be anywhere. Check out the complete report at livemint
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