Facebook reported a 43% jump in its revenues in India for the year ended March as marketers in the country continue to increase advertising spends on digital media, according to filings with the registrar of companies.
The social network major posted Rs 177 crore of revenues at Rs 16 per user; for FY16 against Rs 123 crore at Rs 9 per user in the previous year. Its net profit doubled to Rs 31 crore from Rs 16 crore during this period.
India is already the second largest market for Facebook outside the United States, where it earned Rs 610 per user, and there is huge potential for growth given the rapid expansion of mobile data usage in the country.
Less developed markets such as India lag behind in consumers’ use of digital devices and brands have been slower to embrace digital media; traditional media still secures the bulk of ad budgets in the country.
But most marketers have increased advertising spends on digital media, particularly in urban areas where the infrastructure supports Wi-Fi and affordable mobile connections, though Google attracted most of it, media insiders said.
“Facebook is fairly small but it is usually a number one or two chouce for marketers. In terms of a broader visibility, it gives enough band for the buck compared to Twitter or LinkedIn which is very niche,” said Karthik Srinivasan, national lead at Social@Ogilvy, the social media division of leading advertising firm Ogilvy & Mather.
Umang Bedi, managing director at Facebook India & South Asia, had last week told “Indian digital macro-economic growth is driving user adoption. Someday India is bound to be the largest user market but I don’t know when.”
New York based market research company eMarketer estimates that digital media accounted for 12.6% of total ad spend in India, but will surpass $1 billion or about 14.3% of total ad outlays by 2017.
Companies across segments – from telecom operators to mobile phone makers to car makers and fast-moving consumer goods companies – have been increasing digital advertising spends to attract younger consumers.
India’s largest advertiser, Hindustan Unilever, currently spends roughly 10% of its advertising budget on digital media. Marketers said that while Google and Facebook compete for digital dominance, both platforms are powerful advertising channels that cater to different needs of a business.
“Since in India, mobile is one of the fastest growing market segments, it gives Facebook a unique edge over Google, as social discovery is more intuitive to mobile-first.” said Himanshu Bakshi, marketing director at Danone India. “The trend shows that in the near future, investments in Facebook will be more promising with the new features and more effective targeting and engagement opportunities. What better than hearing back immediately on a campaign from consumers,” he said.
Nearly a year ago, Facebook was caught in a debate on net neutrality, with its Free Basics initiative to offer free access to certain internet services in tie-up with local mobile operators seen as violating the principle of free and open internet. Telecom regulator TRAI then forced Reliance Communications – the only Free Basics distributor in the country – to put commercial deployment of the service on hold.
Facebook is now testing Express Wi-Fi, or public Wi-Fi deployments for offering internet across rural areas in the country. “We are working with carriers, internet service providers, and local entrepreneurs to help expand connectivity to under served locations around the world. We’re currently live in India, and are expanding to other regions soon,” the Express Wi-Fi website says.
Facebook added 28 million new users in the country in the last year, made the platform available in Hindi, and added 11 more local languages to attract customers.
Also, with the majority of Indians still using 2G connections, the company last year came up with a fast loading , lighter version called, Facebook Lite, for which users pay less for data.
Source – ET