During the pandemic, Facebook’s gross ad revenue from the Indian market grew to Rs 9326 crore, recording a 41% year on year growth.
The company ended up paying a Rs 518 crore equalisation levy to the government on the gross ad revenues as per the filings.
Facebook India works on a reseller model, wherein they buy inventory from a global subsidiary and sell it to clients in India.
For Facebook India, these revenues consist primarily of advertising revenues generated by displaying impression-based ads on Facebook, Instagram, Messenger, and third-party affiliated websites or mobile applications.
In FY19-20, the social media giant clocked a Rs 136 crore net profit on revenues of Rs 1216 crore.
According to industry insiders, Google and Facebook roughly corner around 75% of the digital advertising pie in India, and this has been the case for the last five to seven years.
During the pandemic, advertisers gravitated towards platforms like Facebook and Instagram due to high engagement numbers. Ajit Mohan, Facebook’s managing director for India, told ET in July: “We are seeing marketers shift more and more attention from traditional media to digital media, driven by the growth of these platforms and also an increase in usage and engagement levels.”
Last month, Google India reported net profits of Rs 808 crore for the year ended March 31, 2021, on revenues of Rs 6386 crore.
Advertising accounts for approximately 27 percent of Google’s total revenue.
Experts say that both Google and Facebook have multiple platforms that have extremely high traction with consumers, and the size and scale of their audiences is only increasing year on year.
The rapid offline-to-online shift by businesses both, large and small, can be attributed as one of the key factors for FB’s revenue growth in India.
“Research shows that digital adoption and online shopping in India have accelerated by two to three years in the country within months of the pandemic. More importantly, it pointed out that these shifts are structural, ” said a consultant who works with digital companies.
Digital spending has been going up steadily for some time, but has accelerated during the last two years. According to GroupM’s ‘This Year, Next Year’ (TYNY) 2021 report, India is the second-fastest growing market in the top 10 list.
The digital share of overall Indian ad spends in 2021 is estimated at around 35%.
