scorecardresearch
Follow Us:
Saturday, January 29, 2022

Ad revenue: Facebook and Google make more than top 10 media firms put together

🔴 At Rs 23,213 crore, their combined ad revenues is higher than the combined ad revenues of the top 10 listed traditional media companies at Rs 8,396 crore, an analysis by The Indian Express showed.

Written by Aashish Aryan | New Delhi |
Updated: December 4, 2021 7:49:40 am
Together, Facebook India and Google India corner up to 80 per cent of the domestic digital advertisement revenues.

That online advertising was gradually chipping away from other media was known, but the latest advertisement revenues from the India operations of BigTech companies Facebook and Google has put traditional media companies on notice.

At Rs 23,213 crore, their combined ad revenues is higher than the combined ad revenues of the top 10 listed traditional media companies at Rs 8,396 crore, an analysis by The Indian Express showed.

Together, Facebook India and Google India corner up to 80 per cent of the domestic digital advertisement revenues.

Consider this: For the last financial year, Zee Entertainment Enterprises, which has the largest market capitalisation among listed media entities, reported total revenues of Rs 7,729 crore. Of this, revenue from advertisements were 48 per cent, or roughly Rs 3,710 crore. In comparison, Facebook India alone reported gross advertisement revenues of Rs 9,326 crore for financial year 2020-21,while for Google the same was Rs 13,887 crore.

Similarly, for Sun TV Network, which is among the largest broadcasters in India, the total income from advertising and sale of broadcast slots for the last fiscal stood at Rs 998.5 crore, which is a tenth of the gross advertisement revenue reported just by Facebook India.

Bennett Coleman and Company Limited (BCCL), one of the largest and most diversified media companies, had reported a consolidated revenue from operations of Rs 5337.9 crore for the fiscal ended March 31. This is a little more than half the gross ad revenue of Facebook India.

Both Facebook India and Google India, however, lag on aspects such as net revenue and net profit, when compared to traditional media companies. For example, while Facebook India reported a net revenue of Rs 1,481 crore, and Google India reported a net revenue of Rs 6,386 crore, Zee Entertainment Enterprises reported a net revenue of Rs 7,729 crore.

The main reason for this is that Facebook India and Google India operate on an advertisement reseller model in India, which means that they buy inventory from a global subsidiary of the firm’s US headquarters and then re-sell that ad space to their client in India. For this, they pay a share of their gross advertisement revenue to the global subsidiary from whom they purchase the ad space.

Among the top ten listed traditional media companies are media houses such as TV18 Broadcast, DB Corp, Jagran Prakashan, Entertainment Network, and TV Today Network, which reported advertisement revenues of Rs 1083.18 crore, Rs 1008.4 crore, Rs 886 crore, Rs 52 crore, and Rs 580 crore, respectively for the last fiscal.

Industry sources said that while Facebook India pays up to 90 per cent of their gross advertisement revenues to the global subsidiary, Google India pays up to 87 per cent.

The growth in gross advertisement revenues, a Meta spokesperson said, could be attributed to India’s shift towards digital, which reflected not just in consumers using digital tools for purchase of everyday needs, but also deep digital engagement with businesses and brands.

“We are now discovering that many of the changes in consumer behaviour triggered by the pandemic are here to stay and will continue to drive growth for digital advertising platforms, especially as savvy marketers make digital a central part of their strategy,” a spokesperson for the company said.

According to a report by Dentsu, the advertising industry in India was poised to grow to Rs 70,343 crore by the end of 2022 from Rs 62,577 crore at the end of 2021, while the digital advertising industry would grow to Rs 23, 673 crore by 2022 compared to Rs 18,938 crore by the end of 2021.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
Advertisement
Advertisement
Advertisement
Advertisement