Online banner ad spend growth slows down as clients switch to search marketing, mobile ads

The growth in online banner ad spend is expected to slow down this financial year as clients have been switching to search marketing and mobile advertising.

In 2008-09, the online banner ad spend grew by 38 per cent to Rs 325 crore. In contrast, the growth rate is expected to drop to 32 per cent (Rs 430 crore) in 2009-10, according to a study by Internet and Mobile Association of India-IMRB.

Search marketing and mobile advertising are expected to reach Rs 325 crore and Rs 50 crore respectively in this financial year, according to afaqs!

Prasanth Mohanachandran, Executive Director, Digital Services, OgilvyOne India, has told afaqs!, “Advertisers have started to experiment, and must have increased their spending on other formats such as search marketing and social media marketing.”

The IAMAI-IMRB study revealed that the growth in banner ad spends in 2009-10 would be driven by sectors such as education (expected to grew by 76 per cent to Rs 34 crore), IT/telecom (41 per cent to Rs 68 crore), FMCG (46 per cent to Rs 47 crore) and auto (40 per cent Rs 39 crore).

The study indicated that the traditional online advertisers - banking, financial services and insurance (BFSI) and online publishers - have not increased spends on banner advertisements significantly.

Banner ad spends in the BFSI sector is projected to increase by 17 per cent to Rs 64.5 crore in 2009-10. Online publishers' banner spend is anticipated to reach Rs 107 crore in 2009-10, compared to Rs 84.5 crore in 2008-09.