Google India MD Shailesh Rao has said in an interview with the Economic Times that 2009 was a breakthrough year for the company, with double digit advertising revenue growth, despite some reports estimating a 5% shrinkage of the Indian advertising market. Google India has clarified to MediaNama that Rao was referring to year on year growth. Google does not publish country specific revenues or traffic acquisition costs for India, but according to industry sources, Google India revenues for the fiscal year 2008-09 were in the Rs. 400-450 crores range.
The downturn, and this has been said by publishers like Rediff.com as well, has seen a shift in advertiser base from Internet companies like job and matrimonial segments to banks, telecom and FMCG companies. Rao says, surprisingly enough, that airlines and online travel agencies have been advertising with them too. Now that may be seen as an indication of two trends: Firstly one may say that there was growth in online advertising despite a shrinkage in the overall Indian advertising market, with spends shifting to the Internet space, and Google benefiting as a consequence.
Secondly, it may also be indicative of spends shifting to a performance based model of advertising: the most bizarre case of which that I noticed in 2009, was of Nokia looking at a lead generation model online in India for the E71, which required users to fill up a form. Which business phone buyer would fill up a form online? While an improvement in advertising spends has been mentioned by many in the industry, it will be interesting to see if publishers are able to retain a CPM (cost per thousand impressions) model, or are forced to retain/switch to CPC (cost per click).
As expected, in the interview, Rao also says that Google does not want to bid for 3G spectrum in India. That’s something we had told you about earlier. Interestingly, Rao puts the number of Mobile Internet users in India at 25 million.