Online Advertising In India - The MSN India And NDTV Media Tie-Up

According to the Internet and Mobile Association of India (IAMAI), internet users have increased from 25 million in 2004 to 38.5 million in November 2005. In 2004 online advertising was 0.5% of the total media market share of INR 116 billion (i.e., INR 0.58 billion) and in 2005 it was 0.8% of the total media market of INR 132 billion (i.e., INR 1.06 billion).

For 2006, the share of online advertising was estimated to reach INR 1.62 billion and INR 2.8 billion by 2007-08. Raj Nayak (Nayak), CEO, NDTV Media, said, “If we look at dotcoms today, there are 38 million users, which in perspective is five times the readership of the leading English Newspaper, and the medium adds about 1 million new audiences every month.

As is known, there are 30,000 advertisers on print, 3,000 advertisers on TV, while there are only 70-80 advertisers on the Internet. So, one can imagine the potential of the Internet space and even if we are able to bridge the gap of getting all the advertisers who are on TV to start with we are talking of expanding the market by some X hundred per cent.”^[3]

“We are the fastest growing ad market in the world. The Indian market is growing at 21 per cent, which is ahead of China, which is at 16 per cent. The online ad market is growing at 63 per cent, the fastest in the world. So, if we continue to grow at these rates than the sheer organic growth will take us to about $165-200 billion by 2010,”^[4] says Rajnish.

MSN India had already received advertisements from brands like Windows media center, Sahara, Reid & Taylor, Punjab National Bank, GE country wide, India Today, and Alliance Insurance. MSN India hoped to have in its fold at least 500 advertisements by the end of 2006.

However, many advertising and media experts were of the view that it would take some time for this concept of desktop television to gain popularity. Venkatesh Sharma, Country Head, Tribal DDB India^[5] said, “Internet penetration is urban-centric, largely concentrated in the top 23 cities, almost 70 % male, between 15 and 40 years.

That apart, unlike TV or print, there is no standardization and no agency such as TAM or MRUC to measure viewer/ readership. A number of people are not sure of the return on investment.”^[6] Even Sriram Adukoori, Director MSN, South Asia was of the opinion that there were few bottlenecks in internet advertising like the lack of a credible agency or source for measuring reach and ranking of portals.

contd....

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^[4] Pritie Jadhav, “MSN India, NDTV media ink deal,” http://www.exchange4media.com/e4m/news/Newfullstory.asp?section_id=8&news_id=19058&tag=13785, December 20, 2005.

^[5] Tribal DDB Worldwide is a leading international digital marketing agency and has offices across the Americas, .Europe, and the Asia-Pacific region.

^[6] Pallavi Sah, “Net gains steam,”www.financialexpress.com/fe_full_story.php?content_id=113551, January 05, 2006.

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