Signs up 70% of Indian online advertisers

Microsoft's $47 billion plan to buy Yahoo may have come unstuck, but that has not prevented the giant from Redmond from aggressively pursuing the online ad market.

Five months since the company started pushing its online ad-network in India, it has signed up around 70% of the online display advertisers in the country. Online ad networks are the intermediaries between advertisers and content websites and mostly get paid on a commission basis for placing ads on websites or search listings. The Indian online advertising market, excluding classifieds, is estimated at around Rs 500-600 crore per annum, split equally between display and search-based listing.

Like most markets across the world, about 70% of the online ad-spend in India is estimated to pass through Google's 'Adwords' advertising network.

Richard Dunmall, GM for Asia-Pacific, Microsoft's advertising division, said the company has leveraged its existing relationships for its own websites such as MSN India and Live search, to jumpstart its ad network. "About 85-90% of the nearly 200 advertisers we have tied up with advertise on third party websites," Dunmall said.

Microsoft's current ad network, called 'Microsoft Advertising' is based on 'DRIVEpm', a smaller network it had acquired in late 2007.

In India, Microsoft manages online advertising for Mid-day and Facebook, among others. Unlike Google, which gets most of its revenues from small advertisers, said Dunmall, Microsoft will focus on the bigger spenders, at least initially.

He admitted there was a lower acceptance of online advertising by the big brands in India than from the small players. "What we have seen is that while online advertising accounts for about 3% of the overall ad market in India, for the big brands such as the FMCG players, it's mostly 0.1% or 0.2%."

However, Dunmall agreed that working with the existing relationships between big advertisers and their media-buying agencies is a challenge.

The ad budgets of big spenders in India are guided or controlled by media-buying agencies. The latter usually have their own creative arms who design advertisements for the print and TV medium, but not for online, due to the technical nature of Internet advertising.

Sreejiraj Eluvangal/ DNA-Daily News & Analysis Source: 3D Syndication