Bangalore: Internet advertising has become a major platform for venture capitalists to invest. Industry estimates show that around Rs.400 crore has been pumped in by various private equity or venture capital firms like IDG Ventures, Sequoia Capital India, Opus Capital and Intel Capital to online advertising sector this year.

Moreover, the Indian Online advertising is expected to touch Rs 2,500 crore in the next three years. It is projected to grow by 32 percent year-on-year over and will contribute 6.8 percent of the entire advertising pie, which is only 2.4 percent at present.

Internet penetration in urban India has grown from nine percent last year to over 12 percent. Realizing the future growth of internet as an online advertising media, IDG ventures has invested Rs.16 crore in Ozone Media, a Bangalore based internet advertising firm. While Sequoia Capital has pumped in Rs 20 crore in Ideacts, Jivox, a self-servicing online video advertising platform, has managed to rope in Helion Venture Partners and Opus Capital to invest around Rs 40 crore in its latest venture.

"In the past we've invested in similar propositions in the West and in China. We've developed an expertise in this sphere and firmly believe that our investments will add value to our partners," Manik Arora, MD, IDG Ventures India, told The Economic Times.

A study by ZenithOptimedia has found out that 75 percent of online users notice ads on the internet. "Banner ads is the next big thing in online ad space. It is set to reach Rs 350 crore by next year. The platform is already drawing companies from sectors like auto, FMCG and education. It will certainly attract many more and we are gearing up for the boom," opined Kiran Gopinath, CEO, Ozone Media.