State of Mobile Advertising in India
Given mobile’s inherently personal nature, it has quickly grown to become a major social media channel. This willingness of users to engage with mobile social networking, offers real opportunities for brands to create contextually relevant messages for their customers. Return on investment (ROI) is high for advertisers in mobile advertising. The biggest advantage with mobile advertising is that brands can do a state, city and content wise segmentation. And, the cost of ad delivery to the same user on mobile is much cheaper. Also, it is extremely targeted and tailored.
The concept of Mobile Advertising has grown and expanded considerably over the past one year and continues to grow. According to a recent report, this market has grown to $25 million in India with an expected growth of $60-$80 billion globally by 2014, in terms of mobile advertisements and monetization. By 2014 the expected no. of mobile internet users is likely to be 4.5 billion globally with 250 million users in India.
Some interesting facts:
- The automobile sector is one huge sector that uses mobile advertising in India. Some of the top brands include: Maruti Suzuki, Honda, and Yamaha.
- Brands like Coca Cola, Reebok, CricInfo.com, etc. are major advertisers too.
- India has the world’s second-largest mobile phone user base with over 919 million users as of March 2012.
- The number of mobile subscribers in India is growing by 20,000,000 every month
- Penetration of mobile phones in India is more than 50% higher than penetration of TV
- Number of mobile ads served in India each month exceeds 10 billion
- 40,000,000 internet users in India access via mobile devices.
Among publisher categories, social category took the lead in mobile ad traffic volume in terms of ad impressions, while Music, Video & Media sites and apps retained the top spot in terms of ad revenue generation. Business, Finance & Investing category still produces the highest revenue per impression. As opposed to 2012, FMCG saw a high uptake in the last two quarters of 2013, as five major advertisers including ITC, Reckitt Benckiser, HUL, Mondelez and Nestle ran more than 30 campaigns at a reasonably good scale. The improving networks and rapid surge in uptake of data hungry smartphones are driving demand for online content, which is now being satiated through applications by various content providers. Also, gradually, the price sensitive Indian market is observing an increased consideration from users to pay for content, which is also opening up business opportunities for various stakeholders.
The advertising scenario in India is rapidly changing and each brand has either opted for digital media or is considering going for it. Now enterprises and brands are opting for mobile advertising to promote their products and services and to reach out to customers in a cheaper and more targeted way. According to a report by Mobile Marketing Association (MMA), the Indian mobile advertising market would cross ₹ 2,800 crore, while revenues from paid mobile applications would touch ₹ 2,000 crore by the year 2016. Even during recent times of economic slowdown, mobile advertising is emerging as the major tool for brands to advertise in a cost-effective way. The mobile advertising segment is seeing 20-30 percent growth and 2014 would be a major year for mobile advertising in the country. There are multi modes of advertising within the mobile domain, including in-app, rich media, video and banner. Anyone can use these modes to advertise their services and products with a local approach.
There are three categories of advertisers: 1) The first group is the conventional brands, who opt for mainstream media first to advertise. 2) The second category is online first customers, such as e-commerce players and OTA services. These companies are getting most of their traffic from mobile, but they are now trying to increase the number of transactions that happen via the platform. For most of the players in this category, only 15% of the transactions happen on the mobile and the rest are still from a computer. It is worth noting that Snapdeal had announced that 50% of its transactions came from mobile. 3) The third category consists of mobile first advertisers, who have carrier billing services and in-app purchases enabled.
For these companies, the only way to attract customers is through advertising, since carriers are not doing it for them any longer. Earlier the discovery part was managed by the carriers who used to charge a higher commission per transaction, but this has changed since the TRAI regulation.
Video: Main Tool For Mobile Advertising
While all these modes are growing significantly, mobile advertising through videos has emerged as a major tool for brands. The main reason behind this trend is that TV advertising is becoming a pricey affair for brands and slots are limited there. Additionally, the change in consumer preferences, such as opting for smartphones and tablets to consume content instead of linear broadcasting is also another reason behind brands switching toward the digital mode. Mobile advertising offers targeted reach to consumers and offers a variety of advertising formats. TV content is being reproduced for mobiles as well, given the demand in the market. Mobile advertising also has a unique differentiation over other platforms like TV — that it allows brands to do very deep segmentation by target audience and therefore feed them with most relevant and engaging content, something that a mass, linear platform like TV can’t achieve, and certainly not at a cost that mobile makes possible. However, TV advertising will continue to have its own set of relevance and impact. For marketers, mobile advertising is becoming a powerful ad channel outperforming online advertising by about 3 times across a variety of metrics such as ad awareness, message association, & purchase intent.
Role Of Telcos
In the mobile advertising space, Indian telecom service providers are also playing a pivotal role. Last year, Bharti Airtel and Sistema Shyam TeleServices launched their respective mobile advertising platforms to help leading brands connect with their customers in a personalized manner. Telcos are forging revenue sharing models with advertising content providers to augment their revenue streams. With the advent of 3G and 4G, operators can no longer ignore the potential of this new advertising medium, and given that they have a good understanding of the behavior and patterns of their customers, it can make a big business case for them in the years to come. An operator can offer its subscribers incentives for agreeing to receive advertising, thereby increasing the attractiveness of the medium and user responsiveness. With the help of right profiling, end-users will receive meaningful ads (and not spam) in a controlled environment, such as, say, up to four ads a day.
Experts believe that despite an increasing smartphone and 3G adoption in India, mobile advertising is still not on par with the western world, hence rural community is the primary target of mobile advertisers. Since majority of our country resides in rural areas, there lies a huge untapped opportunity and we at iEntrepreneur believe the next cycle of growth will come from tier 2 and tier 3 cities.
A huge hurdle cited by mobile advertising firms is the lack of uniform technology among the operators. This makes it difficult to target consumers consistently across multi-channels like SMS, Outbound Dialing, Multimedia services, etc. However, the condition is likely to change as operators are realizing the potential of engaging aggressively with their subscribers to offer them more customized offerings and not bulk advertisements which often lead to irate customers.
IAMAI also predicts that by the end of the ongoing fiscal year, the mobile advertising industry in the country will touch ₹ 1.4 billion ($27.7 million), a sign of slow but consistent growth. Mobile internet is the next big opportunity for the domestic telecom players. Of the total internet subscriber base of 21 crore at the end of September 2013, over 90% accessed the net through a mobile handset. This has catapulted mobile advertising in India. According to Mobile Marketing Association, mobile advertising grew by 60% to ₹ 300 crore in FY13. It is expected to grow by another 43% in 2014 to ₹ 430 crore.