India has emerged as a mobile-first consumer economy, owing to the massive digitisation underway in the country. The growth in app downloads and average time spent on mobiles has given a huge fillip to mobile advertising. Growth in the e-commerce presence of brands and in overall digital transaction volumes has led to the realisation that mobile advertising can bring in far more effective and measurable returns on spends.
Mobile advertising enables brands to carry out targeted marketing, whereby brands are able to discover users based on parameters such as demographics, devices, location, income groups and past digital behaviour. Moreover, it offers a wide range of channels such as gaming, browsers, videos, over-the-top content, magazines and e-commerce platforms, which can be tapped by brands to reach out to customers. Given that mobile advertising allows brands to quickly gather insights from user data and take corrective measures, it is rapidly emerging as their preferred choice.
As the industry matures, we see a clear trend of advertising swinging towards engagement over mere acquisition of users. On a long-term basis, the global market is expected to thrive as 5G, in-app ads, video ads and mobile reach are all projected to grow in the foreseeable future.
According to PricewaterhouseCooper’s Global Entertainment and Media Outlook 2021-2025, India’s entertainment and media industry is expected to grow at a compound annual growth rate of 10.75 per cent and reach a valuation of over Rs 4 trillion by 2025. In emerging markets such as India, the overall share of digital advertising is relatively lower, at about 30 per cent, against the global average of 50 per cent. Therefore, this space is pegged to grow at about 25 per cent going forward, as against 9 per cent globally.
The rising advertisement expenditure across the globe is the primary factor supporting the growth of the mobile advertising market. Brands and businesses are making huge investments in advertising and marketing activities to enhance their customer base and brand awareness. Other factors driving the growth are:
Rising adoption of location-based technology to enhance customer service offerings
The growing adoption of location-based services for mobile advertising is also driving the market growth. Location-based marketing uses the past and current locations of mobile users to show them relevant content.
Covid-19 pandemic and higher penetration of e-commerce and social media
The Covid-19 pandemic has positively impacted the global e-commerce industry, as consumers now prefer online channels to purchase essential products over stepping out of the house. As people stayed indoors and their interaction with the virtual world increased, brands started to re-strategise their marketing mix, with an increased focus on mobile marketing. With traditional media being severely impacted, brands took the digital route, specifically targeting consumers through their handset devices. Although mobile in general accounts for the majority of the digital spend incurred by any company, Covid-19 seems to have accelerated this trend. It is estimated that 45-55 per cent of a company’s digital advertising budget is now spent on mobile advertising.
The use of conversational chatbots is on the rise. Chatbots respond to customer questions by mimicking human interaction through a combination of pre-programmed scripts and artificial intelligence. Chatbots can provide 24×7 service, improving customer satisfaction while reducing the need for support staff, thus helping businesses save money and time. As chatbots mature, they can produce answers to frequently asked questions by gathering data from previous exchanges. This ever-expanding information database gives customers the information they need and reduces programming expenses.
Location-targeted mobile ads
Location-targeted mobile ads are growing as a way to serve location-focused advertisements to consumers on the go. Location-targeted advertisements are a remarkably effective way of cutting through marketing noise, delivering offers that meet consumers’ needs at just the right time. Bluetooth technology helps determine the perfect time and place for ads to be served, increasing the likelihood of customer engagement. When the target audience of a business is within a specified radius of a business outlet’s location, they can be encouraged to drop by with advertisement customised to their preferences.
Given the widespread adoption of smartphones and the emergence of advanced technologies such as 4G and voice over long-term evolution, the experience of watching videos on a smartphone has improved dramatically and will further improve once 5G kicks in. As a result of this enhancement, mobile video has emerged as one of the most lucrative options for advertisers in recent years. Compared to other digital advertising methods such as banners, posters and messages, mobile video offers greater engagement and better conversion rates. As such, mobile video is seeing widespread adoption amongst various leading brands as a preferred medium for showcasing advertisements.
The global mobile advertising market is set to gain momentum from the emergence of numerous innovative video ad formats such as virtual reality, augmented reality, 360-degree videos and vertical videos. Going forward, mobile advertisers and content creators are projected to develop age-group specific content to target the mass mobile internet population. Further, data collected from mobile users for specific categories such as arts and entertainment, hobbies and interests, and style and fashion is anticipated to allow mobile advertising and content developers to develop more personalised messages.
The key players operating in the mobile advertising industry are anticipated to create and develop mobile advertising content that can easily support mobile devices used in low internet connectivity areas. This will enable prominent players to target emerging markets such as India, where mobile internet connectivity is low compared to developed markets such as the US and the UK.
The key players in the global mobile advertising market include Smaato Inc., OATH INC., InMobi, Flurry, Facebook, Google, APPLOVIN, Snapchat Ads, Liftoff, Unity, Apple Search Ads, Chartboost, Vungle, Twitter Ads, Leadbolt, Adcolony, Tapjoy, Avazu Inc, ironSource, Ad Action Interactive, Fyber, GlobalWide Media and Moloco. Their attempts to tap opportunities in the market include developing product variants to amplify their market share and gain traction in global marketplace. These companies are engaging in strategic activities such as launching new products, establishing application dominance, undertaking research and development, signing agreements, expanding product width and breadth, and embarking on collaborations to gain market share.
Impediments to growth
Ad fraud involves corrupting an advertisement by placing a fake link. While ad fraud has existed since the advent of online advertising, recent years have seen a sudden surge in ad fraud incidents. Industry analysts have highlighted identity theft, mobile fraud and in-app advertising fraud as growing concern areas in the mobile advertising space. In-app advertising fraud is a considerable threat that marketers need to be wary of. One of the factors responsible for this is the lack of advanced security measures across the ecosystem to facilitate fraud prevention. According to industry experts, the deployment of blockchain in mobile ad formats can address this problem.
Reaching customers on the right avenue
The mobile environment is a huge channel for today’s marketing teams, but it is also incredibly diverse. In this environment, businesses can connect with customers via SMS, MMS, mobile apps, social media and countless other options. The key to success in mobile marketing is figuring out, in advance, which channels your clients will respond best to. Selecting the best channel for customers is crucial.
In a world where the potential points of contact with consumers are infinite, ad viewability is one of the major concerns for advertisers. Various factors such as ad load speed, outdated ad serving technology and lack of global measurement standards contribute to the problem of ad viewability. It is thus imperative for advertisers to ensure that the platforms where they put up their ads have good user engagement. Advertisers also need to make sure that advanced technologies are used in their ad campaigns.
The way forward
Mobile advertising has grown substantially in scope since its early, ill-defined stages. For brands that want to reach today’s on-the-go consumer, mobile advertising is the way to go. Studies have proven that consumers spend a great deal of time on their smartphones researching products before making a purchase decision. Leveraging mobile advertising allows brands to reach new consumer markets, tailor messages and increase brand loyalty. While there will be challenges, the opportunities in the mobile advertising space will grow by leaps and bounds in the future, especially with increasing smartphone adoption.