Paid search tipped to overtake display in 2010
India - Paid search advertising is tipped to surpass display advertising in India by the end of 2010, according to a new report from Starcom MediaVest Group.
The Global Media Intelligence report by Starcom MediaVest Group (SMG) and eMarketer forecast that the gap between paid search and display advertising is set to widen further with paid search spends expected to grow at a rate of more than 45%, as compared to 20% growth in display ad spends in the next two years.
By the end of 2010, the total digital ad spends - including display, search, mobile and social marketing - in India are expected to reach US$2.2 billion.
Of that, paid search spends would contribute about 46%; while display advertising spends would be about 41%. Mobile marketing and social media advertising spends are expected to jump significantly.
Banner, video, rich-media ads and display ads served via Google content network are segmented under display advertising. Mobile advertising includes SMS marketing, mobile banner ads and branded mobile applications.
Branded social media applications, games and social ads are considered under social media advertising.
"In addition to India, in all markets that SMG has studied, search is growing faster than online display and is actually significantly larger in the total digital ad spend pie," points out Pushkar Sane (pictured), chief digital officer, North and South Asia, Starcom MediaVest Group.
"We predict that very few brand campaigns in the future will go live without a search component. Additionally, marketers in India now understand that their consumers are searching on a 24-7 basis; and hence, many of them are taking an 'Always On' approach to search."
Though SMG expects that paid search marketing spends will outdo display advertising this year, various digital media planners and professionals have different views on this.
"Currently, paid search could be about 35% of total digital ad spends in India; while majority of the digital ad spends (55%) still belong to display advertising. The rest is divided between mobile and social media marketing. This scenario will not change this year; it may take a few more years for that to happen in India," MP Singh, media group head, Lintas Media Group, said.
Even Suresh Reddy, chairperson and chief executive officer, Ybrant Digital, the company which owns various online ad-networks, believes that display advertising will continue to dominate the digital media ad spend pie for some more time, before paid search overshadows display eventually.
Reddy reasons, "Large traditional advertisers, who are in the mode of experimenting with the digital medium, usually prefer to allocate their first major chunk of money on display advertising, as compared to performance-driven campaigns. Thus, paid search marketing, which comes under performance-led campaigns, would get a lower share of spends, as compared to display advertising, in the near future."
However, Rajnish R, co-founder, Althea Systems (the company which runs a social video browser named Shufflr.tv) agrees with the SMG forecast.
He says, "SMG's estimation seems valid, and search will overtake display this year. A lot of small advertisers, who market their products and services through search engines like Google, do not get noticed or counted by media planners, who roughly estimate the total digital ad spends based on corporate spending."
He adds, "In-fact, 30% to 40% of Google's ad revenue - where majority of the search marketing money gets routed - arrives from small advertisers such as travel agents, restaurant owners and anti-virus software sellers."
Rajnish also believes that the dominance of both search and display advertising in the digital ad spend pie may get challenged by social media in future.
"Social media will eat away the share of the search engine marketing platform (Google), because online minutes spent on social media sites would be much more than the time spent on searching."
He adds that the openness of ad platforms would lead to social media taking away share from display advertising.
"Social media has made display advertising almost self-serve. This allows the advertiser to use Google analytics data to track the funnel down to conversion and change campaigns very quickly."
For the record, the SMG report estimates that mobile marketing and social media advertising spends could be around Rs 240 crore and Rs 37 crore by 2012.
- Starcom Mediavest
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