NEW DELHI: Social networks are gaining in popularity among Indian consumers, but advertisers have not yet begun to reflect this trend by directing more of their budgets through this channel.
ComScore, the online research firm, reported that the number of unique visitors to portals like Facebook rose by 51% in December last year, to 19.3 million, compared with 12.7 million in the same month in 2008.
According to Webchutney, the digital agency, these properties will take a 13% share of online adspend in the Asian nation this year.
The company also predicted that the 500 biggest marketers in the country will increase their digital advertising expenditure by 44% during the current fiscal year, to 400 crore rupees ($83.8m; €57.7m; £52.5m).
Brands in the FMCG category are expected to be among the main drivers of this growth, as they try to reach younger consumers.
For example, the latest campaign for Sprite, the carbonated drink owned by Coca-Cola, was launched online before running on TV and other forms of traditional media.
PepsiCo, Colgate Palmolive and ITC are among the other major players in this sector that are looking to the web, with sector spending set to hit 72 crore rupees in the financial year ending in early 2010.
Facebook is the social network thought to be attracting the highest amount of advertising revenue in India at present, followed by Orkut and LinkedIn.
However, it is estimated that each of these Web 2.0 services currently generates revenues of less than 10 crore rupees.
Earlier this year, Microsoft, the American IT giant, launched Windows Live Planet, a new social network developed specifically for the Indian market.
Neville Taraporewalla, head of the local arm of Microsoft Advertising, argued that "search is far ahead of social media. Social media is used differently."
However, he added that marketers still have some reservations about using this medium, particularly because they have little control over the material hosted on these sites.
"Brands fear that they will have to put up with uncontrolled and inappropriate content from consumers," he said.
Google, the owner of Orkut, has introduced a range of innovative online and mobile services in India, and is optimistic that social networks will improve their position going forward.
Parminder Singh, business head of Google India, said "with the growing popularity of social networks, many advertisers are showing great interest in tapping the audience on these platforms."
"But the context and objectives of the campaigns on social networks is different from campaigns on other media platforms – so it's not a fair comparison."
Data sourced from Business Standard; additional content by WARC staff