India is quickly becoming an advertising powerhouse, with promises of a $17-billion web-enabled industry by 2008.

The most recent Nasscom-McKinsey report states that India could build a $17-billion web-enabled industry by 2008.
 
According to comScore Networks, India is the ninth biggest country in terms of the total online population, and is rapidly outpacing countries like the U.S., China and Japan. The total online population in India (people aged over 15 years accessing the internet -- excluding traffic from mobile phones, PDA's and internet cafes) is at 42 million users, around 3.7 percent of the total population (Internet World Stats, 2008)
 
With a population of over one billion people, there is huge opportunity for internet growth in this market. Aside from the high economic growth paired with low broadband rates, mobile marketing and outsourcing in the online advertising arena is what is boosting online growth. These two statistics alone are an indication of this growth:

• According to a recent national survey, 55 percent of young Indians are now opting for careers in web-related activities
• India is poised to become the third largest mobile population in world by 2007/2008 (Indian Mobile Market 2006)

Mobile2India
As stated above, India is poised to become the third largest mobile population in world by 2007/08 as middle classes "go mobile." Mobile ownership passed 100 million in 2007 as "the largest middle class in the world" took up ownership. India ranks third in the world behind only China and the United States.

Aside from messaging, mobile gaming, also known as advergaming is turning out to be the stickiest mobile application. Consumers play with the lure of winning a prize, and in the process take away key messages of the brand. According to Rajiv Hiranandani, vice president of Mobile2win India, "Advergaming has the ability to involve users, to get them to interact, to entertain and engage them, and in doing so facilitate the attention value exchange that most marketers dream about. Ads will go where the eyeballs are, and cellular games are the fastest growing form of entertainment. It's a sexy trend of blending advertising and entertainment."

Outsource2India
According to the McKinsey Global Institute, outsourcing will lead to a net savings of $390 billion for the U.S. economy by 2010. As global production grows progressively specialized, and companies are increasingly faced with new modes of competitive pressure, offshore locations provide U.S. firms lower operational costs while providing their customers with quality work.

As Robyn Meredith, author of New York Times bestseller, "The Elephant and the Dragon: The Rise of India and China and What It Means for All of US":

"By bringing the global economy to India and China—both by hiring Indians and Chinese and by selling products to them—Western companies are changing the face of the world economy and thus the way we live, those of us in the East as well as those of use in the West."

Let's take a look at the advertising industry as an example. The U.S. accounts for half of the world's $500 billion advertising industry, which would make many think that America is number one in this industry. However, if one looks at a volume-to-award ratio, one can't help but admit the creative power of countries like Brazil, India, Thailand and Singapore. For instance, at the 2004 Cannes Awards, the president of the Jury was Piyush Pandey, group president and national creative director of Ogilvy and Mather, India -- a country quickly becoming a viable online advertising center.
 
U.S.-based brand name advertisers such as MetLife, Johnson & Johnson and DirecTV have all tested the global outsourcing trend in their advertising operations and have found that because all major multinational brands are now available in India, Indian professionals are skilled with the global positioning and advertising of these brands.

It is perceived that the biggest challenge of globally outsourcing online advertising is the lack of a deep understanding of the local market of the customer. According to Dave Banerjee, founder and brand strategist of Banerjee & Partners, a mainstream advertising agency that offers a blended outsourcing model comprised of onshore strategy, offshore production and creative execution:

"What convinces a client is actual work. When we present some of our work, and some of the work that's going on in India, clients simply can't believe that the advertising industry is so evolved in India. There are hundreds of campaigns, created and run in India, that are as American as any American campaign. The reason is that a certain socio-economic segment of the country is heavily influenced by the American culture and lifestyle. They watch the same TV shows as we do, hip-hop is a rage, and it is impossible to get a ticket to a rock concert a week in advance. People drink as much bourbon as they drink scotch. Marlboro Lights is the standard cigarette brand. English is the official language at work as well as at play. The major cities in India have gone through dramatic change in the last ten years or so. So much so, that some of the advertising professionals can write better ads for Americans than they can write for Indians."

What is interesting to note is the connection between India and China online growth. India joined the internet before China, but since 1998 Chinese internet quickly caught up and/or surpassed India. This is due to a variety of conditions such as economic growth, government involvement and telecommunications infrastructure. It will be interesting to see how both countries will manage this growth compared to Western countries in the years to come.

Elizabeth Lloyd is co-founder and chief revenue officer, 9Global, Inc.