The ongoing digital revolution in India has transformed the scale and the way in which media and content are being consumed. This, in turn, has created substantial interest among advertisers, who have in recent years been tapping the digital media space to enhance their reach.
Now, with smartphones and mobile phones becoming the primary and most used digital devices, a significant portion of the spending on digital advertisements is expected to be diverted to mobile advertising. According to a report by InMobi, approximately 80 per cent of the total web traffic is generated through mobile devices. An average smartphone user spends close to 4.5 hours accessing and browsing the internet every day, which is 37 per cent higher than the average time spent watching television daily. Owing to these factors, companies are increasingly diversifying their digital ad spends to mobile advertisements in order to improve their returns on investments.
tele.net takes a look at the trends, growth drivers and the challenges faced by the mobile advertising industry…
Size and growth
Although television will continue to be the dominant medium for advertising, mobile is expected to become the fastest growing advertising medium in the coming years. Sectors such as e-commerce, and banking, financial services and insurance (BFSI) are the leading verticals in terms of adopting mobile advertising. Sectors such as consumer products are also seeing increased uptake and have started moving past SMSs and interactive voice response (IVR) services to reach out to the rural masses. Spending on mobile advertisements is expected to experience double- digit growth over the coming few years up to 2021. Estimates by eMarketer suggest that mobile ad spends will grow by 75 per cent and 40 per cent in 2018 and 2019 respectively. Further, the share of mobile advertisement is expected to increase from 37.9 per cent in 2017 to 61.7 per cent in 2021. It is also estimated that the share of smartphone users as a percentage of total mobile phone users will increase from around 36.6 per cent in 2017 to 47.7 per cent in 2021, which is further expected to contribute to the growth of spending on mobile advertisements.
Trends and opportunities
Diversification of platforms
Organisations today are recognising the increasing popularity of social media platforms and are leveraging audiences on these platforms in order to augment their marketing campaigns. Further, the emergence of affordable internet has supported such platforms and is changing the advertising landscape. Advertising companies are now venturing beyond traditional methods of advertising and developing out-of-the-ordinary and innovative techniques.
eMarketer estimates that social media networks reached 26.8 per cent of all mobile phone users in 2017, up by 24.3 per cent over the preceding year. Further, roughly 74.9 per cent of the total social media users accessed these platforms through their mobile phones. Advertising on these mediums is undoubtedly cheaper as compared to the traditional mediums and as such, is expected to adversely affect traditional advertisement spending in favour of mobile advertisement spending.
According to InMobi, apps accounted for roughly 88 per cent of India’s mobile time and India ranked third in mobile app downloads in 2017, with a 12 per cent share of the world’s total app downloads. In terms of categories, users are increasingly downloading travel and retail apps owing to attractive first-time offers and discounts.
Rising video content consumption
According to a report by Star India’s over-the-top platform Hotstar, online video consumption grew almost fivefold in 2017. There have been two marked shifts in the country’s video consumption patterns. First, in the early years of video content, users preferred short-duration videos primarily due to the high price of mobile data. This has changed with almost 96 per cent of the video consumption being in the long format; that is, videos longer than 20 minutes.
Second, smaller cities with populations in the range of 100,000 to 1 million clocked the highest growth in watch time at 4.3 times, growing faster than the larger cities with populations of more than 1 million and metropolitan cities, where the watch time grew by 4.1 and 3.5 times respectively. Some cities such as Moradabad, Allahabad, Hubli and Sonepat have taken big strides with their online video consumption figures growing more than tenfold in 2017. Most importantly, the report highlights that 90 per cent of the time spent on consumption of online video content is through mobile phones, which presents a huge opportunity for players in the mobile advertising space.
Focus on rural markets
With the increasing penetration of the internet, smartphones and feature phones in rural areas, companies are looking to increase their focus on rural markets. The Boston Consultancy Group estimates that by 2020, half of India’s internet users will be in the rural areas. Although traditional television advertisements will continue to grow, mobile advertisements will see faster growth. This is largely because the former is more expensive and has relatively smaller reach. Meanwhile, mobile phone and mobile data prices are today at industry low levels, which is expected to increase the target audience in rural areas. Also, intermittent power supply impacts the time spent on television sets, thus constraining the effectiveness of traditional advertising.. Moreover, companies are increasingly focusing on advertising in vernacular languages in order to reach a larger and more diversified consumer base.
Several companies including Hindustan Unilever Limited have innovatively designed IVR systems and mobile messaging campaigns to tap these media-dark consumers in order to build their brands and educate the masses on the use of various products. Therefore, rural marketing is in the cusp of a revolution with mobile phones at the helm of it.
As per a report by the Mobile Marketing Association and GroupM, an ad spend of Rs 270.14 billion on television in 2016 reached approximately 553 million people, who averaged 130 minutes of television watch time. In comparison, a significantly smaller mobile ad spend of Rs 42 billion was able to reach roughly 680 million households, with an average of 178 minutes spent on their mobile phones every day. Therefore, mobile advertising offers the benefit of reaching out to a larger audience for a fraction of the cost incurred by advertisers on traditional channels.
For mobile marketers, defining the relevance and timing of an advertisement is crucial for the success of the campaign. According to a survey by Forrester, 60 per cent of users said that a good user experience was one where advertisements did not disrupt their ongoing activities. Therefore, timing is the most critical, followed by relevance, as voted by 42 per cent of the users. Further, determining the optimum frequency and size of advertisements is also important. Unnecessarily large advertisements that cover a large portion of user screens lead to users taking measures such as installing ad-blockers in order to avoid the ads.
Clearly, there is a huge opportunity available for mobile advertising in the country. With the availability of unprecedented levels of personalised data and a plethora of platforms, companies have the potential to revolutionise their marketing campaigns, with mobile at the core of their strategies. s