Advertising revenue: Facebook and Google are among the top 10 media companies combined
At Rs 23,213 crore, their combined ad revenue is higher than the combined ad revenue of the top 10 traditional media companies listed at Rs 8,396 crore, according to an analysis by The Indian Express.
Together, Facebook India and Google India capture up to 80% of national digital ad revenue.
Consider this: For the last fiscal year, Zee Entertainment Enterprises, which has the largest market capitalization among listed media entities, reported total revenues of Rs 7,729 crore. Of that total, advertising revenue was 48%, or roughly Rs.3,710 crore. In comparison, Facebook India alone reported gross advertising revenue of Rs 9,326 crore for fiscal year 2020-21, while for Google it was Rs 13,887 crore.
Likewise, for Sun TV Network, which is among the largest broadcasters in India, total revenue from advertising and selling broadcast slots for the last fiscal year was Rs 998.5 crore, or one tenth of Gross advertising revenue reported only by Facebook India. .
Bennett Coleman and Company Limited (BCCL), one of the world’s largest and most diverse media companies, reported consolidated operating revenue of Rs 5,337.9 crore for the fiscal year ended March 31. That’s just over half of Facebook’s gross advertising revenue. India.
However, Facebook India and Google India both lag behind in aspects such as net income and bottom line, compared to traditional media companies. For example, while Facebook India reported net income of Rs 1,481 crore and Google India reported net income of Rs 6,386 crore, Zee Entertainment Enterprises reported net income of Rs 7,729 crore.
The main reason for this is that Facebook India and Google India operate on an advertising reseller model in India, which means they buy inventory from a global subsidiary of the company’s US headquarters and then resell that ad space to their client in India. To do this, they pay a portion of their gross advertising revenue to the global affiliate from which they buy the advertising space.
Among the top ten traditional media companies listed are media companies such as TV18 Broadcast, DB Corp, Jagran Prakashan, Entertainment Network and TV Today Network, which reported advertising revenue of Rs 1,083.18 crore, Rs 1,008.4 crore, Rs 886 crore, Rs 52 crore, and Rs 580 crore, respectively for the last fiscal year.
Industry sources said that while Facebook India pays up to 90% of its gross advertising revenue to the global affiliate, Google India pays up to 87%.
The growth in gross ad revenue, said a spokesperson for Meta, could be attributed to India’s digital switchover, which is not only reflected in the use of digital tools by consumers for purchasing needs. daily, but also in a deep digital engagement with companies and brands.
“We are now discovering that many of the changes in consumer behavior triggered by the pandemic are here to stay and will continue to drive the growth of digital advertising platforms, especially as savvy marketers are making digital a central part of the business. their strategy, ”a spokesperson for the company said.
According to a report by Dentsu, the advertising industry in India was set to grow to Rs 70,343 crore by the end of 2022, up from Rs 62,577 crore at the end of 2021, while the Digital advertising industry would reach Rs 23,673 crore by 2022 compared to Rs 18,938 crore at the end of 2021.