it happened in denmark about six months back; and repeated itself in UK, the world’s fourth largest economy. We are talking about Internet ad-spend overtaking TV ad-spend for the first time in UK. As per a report by PriceWaterhouseCoopers and Interactive Advertising Bureau (IAB), where on one hand, Internet advertising spend touched £1.75 billion (having grown by 4.6%), the ad-spend on TV fell by 16% to touch just £1.6 billion. This being great news for online advertisers, website hosts, social networking entities et al, the question is whether this phenomenon can be repeated in a developing economy like India. In this context, it is imperative to remember that online advertising in developed economies are a direct result of the high penetration, fast and cheap broadband, and the quick acceptance of new formats such as video adverts. But, despite Internet fast becoming a strong media vehicle in the country, today, we can only boast of 38.5 million Internet users – not enough to push advertisers to spend more on the Internet than on TV 30-second spots. Even the forecasts by KPMG testify the same.
Advertising over Internet during the year 2009 is expected to touch just Rs.8.4 billion, while the amount sidelined for TV ads is predicted to touch Rs.88.2 billion. So there is where the question comes in – how about a few years later? Certainly speaking, in terms of growth figures, Internet advertising looks more handsome, with a CAGR of 27.9% (between 2009-13) vis-à-vis TV ad-spend, which is projected to grow at just 13.5%, however in terms of absolute amount spent, advertisers will still maintain a higher focus on TV, with expected ad-spend during 2013 to be Rs.155.5 billion, than on the Internet where only Rs.21.4billion is expected to be spent by the advertisers. Translation: In India, TV and traditional media vehicles will reign longer!
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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