Facebook, Google gross more ad revenue than top 10 traditional media
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New Delhi: In India, the combined advertisement revenues of Facebook and Google is Rs 23,213 crore, which is more than the combined advertisement revenue of the top 10 traditional media companies, at Rs 8,396 crore, The Indian Express (TIE) reported. An analysis by TIE found that Facebook India and Google India earn 80 per cent of India's domestic digital advertisement revenues.
Zee Entertainment Enterprises has the largest market capitalisation in India among the listed traditional media entities. In the financial year 2020-21, Zee reported total revenue of Rs 7,729 core, of which roughly Rs 3,710 came from advertisements. But Facebook India alone reported net advertisement revenue of Rs 9,326 crore while Google reported 13,887 crores.
Sun TV Network, one of the largest broadcasters in India, gathered Rs 998.5 crore, which accounts for both advertising and sale of broadcast slots for the financial year. That was only a tenth of Facebook India's reported revenue. Meanwhile, Bennet Coleman and Company Limited (BCCL) grossed Rs 5337.9 crore in the same financial year, but it is only a little more than half of what Facebook India grossed.
But in the case of net revenue and net profit, both Facebook and Google lag when compared with traditional media. While Facebook reported net revenue of Rs 1,481 crore and Google reported Rs 6,386 crore, Zee reported Rs 7,729 crore. This is because Facebook India and Google India operate on an advertisement reseller model. They buy inventory from a global subsidiary of the firm's US headquarters and resell that ad space to their client in India. They have to pay a share of their gross revenue to the global subsidiary for purchasing the ad space. While Facebook India pays up to 90 per cent of their revenue to the global subsidiary, Google India pays up to 87 per cent.
TV18 Broadcast, DB Corp, Jagran Prakashan, Entertainment Network, and TV Today Network are among TIE's top ten listed traditional media companies. Their ad revenues for 2020-21 stood at Rs 1083.18 crore, Rs 1008.4 crore, Rs 886 crore, Rs 52 crore, and Rs 580 crore, respectively.
A Meta spokesperson told TIE that the growth in gross ad revenues could be attributed to India's shift towards digital, which is not just because of consumers using digital tools for purchases but also deep digital engagement with businesses and brands. The pandemic had triggered many changes in consumer behaviour, and they expect these changes to stay and continue to help digital advertising platforms to grow, the spokesperson added.
A report by Dentsu has predicted that the advertising industry will grow to Rs 70,343 crores by the end of 2022 from 62,577 crores at the end of 2021, while the digital advertising industry will grow to 23,673 crores by 2022 compared to Rs 18,938 crores in 2021.
