Spends on digital media to grow by 44%, mobile 600%: Study

According to a study jointly conducted by Webchutney and Juxt, spends on digital media by the top 500 marketers in India is expected to grow by 44 per cent from Rs 278 crore in 2008-09 to Rs 399 crore in 2009-10. The study also projects that the top marketers are likely to increase their ad spend on the mobile medium from the current 2 per cent of the overall digital spends to 9 per cent of the digital spends.

“We expect this Rs 278 crore to be not more than 64 per cent of the total spends on the internet by all marketers. Assuming that the top 500 marketers continue to account for only about 2/3rd of the total online spends, then the total online ad spend kitty may well cross Rs 625 crore in 2009-10,” states the Digital Media Outlook 2009.

The study also reveals that while 82 per cent of the top 500 marketers in India have allocated ad spends to internet, the spend share of this medium remains at just 5.4 per cent of their total advertising budget, which stood at Rs 5,163 crore during the financial year 2008-09.

What is a bit surprising about the top 500 marketers in India is the fact that sectors like FMCG (fast moving consumer goods), consumer durables and consumer services & utilities, which account for about 70 per cent of the total ad spends across all media, account for only 30 per cent of the online ad spends.

“The defined objective of the top 500 marketers using the internet as an advertising medium is heavily skewed towards ‘lead generation and conversion’. It is evident that the medium is popularly perceived and is being used as a ‘direct marketing platform’ rather than a medium of marketing communication,” according to the researchers.

The study estimates that the current online spends of the FMCG sector, which is around Rs 16 crore, is likely to grow by 353 per cent and touch Rs 72 crore in 2009-10. Also, the IT/ITeS/Internet companies are likely to increase their internet spends by almost 70 per cent. However, BFSI (banking, financial services and insurance), one of the early adopters of digital marketing in India, is expected to cut down spends by 35 per cent from their current Rs 47 crore budget to Rs 30 crore.

The findings are based on a study conducted during January-March 2009. For the study, the researchers interviewed 445 respondents, typically C-level executives, representing the top 500 marketers in India. While 13 per cent of the respondents were brand heads and 15 per cent marketing communication heads, almost 72 per cent were marketing heads.

Disclaimer: Goosefish Media Ventures, which incubated AlooTechie, is a subsidiary of Webchutney.