Motley fool did a write up on Rediff. The interesting items to me were
Users – 53.6 million Revenues: $30MM annually ARPU annual : 0.56 cents.
10 advertisers accounted for 55% of revenues. Maybe all revenues were not advertising related. If say Rediff has 10% ( wild guess) of all online ad media spend then total online ad media spend in India would be $250MM.
Does this look high or low and how does it compare to other countries.
These numbers seem to suggest that the market for ad backed plays in India is limited. Will these numbers grow exponentially. How much will total media spend in India be in 2012 and of that how much online.
Does anyone know of reasonably credible estimates.
Entrepreneurs who are trying to pitch ad backed critical mass plays will need to address what share of the media spend they hope to get and how will they get it.
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Given that the Indian AD market is ~$3Bn, assuming penetration (for internet advertising) as high as that in the US (10%), one gets a cap on the internet ad spend (across all categories: display, search, classifieds, with the first two accounting for about 75% of the total internet ad spend) as ~$300M. Obviously internet advertising in India is not as mature as in the US, so expect the total Internet ad market size to be anywhere between $100M & $200M.
A small number (in the US, this is $14B). One can expect this to touch $400M over the next few years as both ad spends & share for Internet ads grow.
Google already has a dominant share (~40%), so limited scope for startups. To establish a successful business in such a small market, you need flawless execution, not to mention tons of luck.
there is no way Rediff has 53M users.. how I wish that was true hahahaha… I mean seriously I am disappointed to see Rediff put out that number, to say its misleading is an understatement.
The IAMAI – IMRB reports are credible, er, sort off, they have some misleading heads such as “ever users” which are irrelevant, and also active users are defined as “logging in atleast once a month”; but if you dig deeper you should find what you need.
Most sources peg the current Indian online ad size in the range $60-$80m. Projections for 2010 are in the range $250m-$300m with 50% annual growth.
There can be some variation depending on one defines/measures Indian Online Media Market. Whether we include money spent on only Resident Indians or do we also include that earned by Indian firms from NRIs. In case of Rediff for example, $20m of $28m came from resident Indians, rest came from NRIs and others.
Likewise, whether we see only earnings of Indian Focused Firms or do we include earnings from Resident Indians by sites having no Indian focus/presence such as say youtube/myspace.
IMAI looks like a credible source…
Internet Users (IMAI)
—————
04 25m
05 end: 38.5m
08 100m Est
http://www.iamai.in/IAMAI_new.html
Advertising market (Rs Crore)
2003-04 42
2004-05 107
2005-06 162
2006-07 218
aditya kumar
Sanjay, in my understanding, most of rediff revenues are not online advertising based. The total display market for online ads is believed to be in $60m range currently, and then there is pay-for-performance on top of that. The overall number might be just south of $100m.
I agree with your conclusion regarding ad based businesses,