What Percentage Of Indirect Revenue Comes To You

Programmatic and direct digital eCPMs are facing significant challenges, especially when it comes to the Hindi market where eCPMs are as low as Rs. 10.

• This scenario becomes even more problematic when considering the revenue distribution model, where ad networks, including giants like Google, claim as much as 50% of the top line.
• Google primarily operates on a performance-based buying mechanism, utilizing cost per click (CPC), whereas media purchases typically hinge on impression-based models (CPM). This dichotomy leads Google to reverse calculate CPC to CPM when making payouts to media, which invariably affects the bottom line.
• Additionally, the situation is compounded by the involvement of Supply-Side Platforms (SSP) and Demand-Side Platforms (DSP), which are in the business of constantly trading ads. These platforms further erode the margins, taking away a significant portion of the revenue in the process.

Based on the discussion within the cohort, we’ve come up with some rough estimates regarding India’s digital advertising market.

• It is valued at approximately Rs. 30,000 crore, which translates to about $4 billion.
• A substantial majority of this market, about 85% or Rs. 25,000 crore, is dominated by digital behemoths Google and Meta.
• In contrast, news publishers in the digital space have a much smaller slice of the pie. Their total digital advertisement revenue potential through direct sales stands at around Rs. 1000 crore, with a more optimistic estimate reaching up to Rs. 2000 crore.
• This estimation aligns with insights from Ashwin Padmanabhan of GroupM.

Changing scenario: With third-party cookie deprecation, Google’s revenue is expected to drop, and so is that of news publishers.

The direct sales pie is degrowing.