Of late, mobile ad spends by companies have seen a massive surge. 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, mobile advertising offers a wide range of channels such as gaming, browsers, videos, over-the-top (OTT) content, magazines and e-commerce platforms, which can be tapped by brands to reach out to customers. Further, given that mobile advertising allows brands to quickly gather insights from user data and take corrective measures, it is rapidly emerging as the preferred choice.

The Covid-induced lockdown seems to have provided a further boost to the digital ad spends of brands. As per a market report, the coronavirus pandemic has led to a major shift in how marketers aim to spend their budgets, with 60 per cent planning to focus on performance-based campaigns linked to returns on investment (RoIs). In fact, industry reports suggest that over two-thirds of marketers are looking to bolster their digital ad budgets, as consumer behaviours have shifted.

A look at the key trends dominating the mobile advertisement space, the growth drivers for the industry, the challenges ahead and the way forward…

Key trends

Voice-based platforms

Brands are finding it increasingly difficult to promote their products and services in areas that have low internet connectivity and inadequate levels of television and digital penetration. These remote and rural areas can be effectively targeted through voice-based platforms. As such, various brands are now betting big on voice-based platforms and are investing heavily in this vertical in an effort to tap the new opportunities and reap fruitful results.

As per industry reports, voice is slowly taking off as the preferred choice for brands when it comes to reaching out to the rural hinterland. In fact, some companies have already started integrating Amazon Echo and Google Assistant. Analysts predict that voice-based platforms will be a big phenomenon within the next five to six years.

Interactive and personalised experiences

A big change in mobile marketing has been the increase in interactivity. Earlier, customers could only view ads on their mobiles; these ads did not allow them to perform any follow-up actions. Today, mobile ads are accompanied by call-to-action links and possess customer-friendly interfaces. These ads present website and app download links in a very clear manner, allowing interested customers to engage with the brands seamlessly across platforms. This is great for brands, as they are constantly striving to provide a personalised experience to their customers.

In fact, brands have now started banking on real-time user data such as demographics and location. The companies try to combine this data with passive and stated data before deploying analytics solutions to derive consumer insights and design corresponding strategic interventions at every stage of the consumer journey.

Vernacular content

In order to effectively target the diverse consumer base in the country, advertisers have started exploring the vernacular content strategy for their marketing campaigns. Since ads developed under this strategy leverage the regional, linguistic and cultural aspects of specific groups of people, the strategy enables brands to better connect with potential customers. Various OTT players are increasingly offering regional content to their users, thus giving advertisers a great platform to connect with their target audience using the vernacular content strategy. Vernacular content is now seeing strong traction, with many brands communicating in more than 10 languages.

Video

Given the widespread adoption of smartphones and the emergence of advanced technologies such as 4G and VoLTE, 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. Installation rates and session lengths for entertainment apps on mobile are seeing positive growth as the world practices social distancing. As such, mobile video is seeing widespread adoption amongst various leading brands as a preferred medium for showcasing advertisements.

Platforms are already experimenting with innovative formats for showing ads, such as Hulu announcing a space for pause ads. In the long run, we are going to see more ads in OTT platforms, whether they are ads that play in our streaming windows, or ads that are displayed on objects or banners within our streams.

Growth drivers

Covid-19-induced digitalisation

The pandemic and the ensuing lockdown has upped the digitalisation game all across the world. With social distancing practices becoming a norm, physical retail is being replaced by e-commerce, which, in fact, consists predominantly of m-commerce. As people stayed indoors and their interaction with the virtual world increased, brands also 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 contributes 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, and this share is likely to increase to 65-70 per cent by 2022.

Deeper penetration and more affordable handsets

One of the primary factors that have contributed to the growth of mobile ad spend is the widespread and large-scale adoption of smartphones, facilitated by the proliferation of affordable, budget-friendly mobile phones. This, coupled with the decreasing cost of data, has resulted in longer durations of time being spent by people on their mobile phones. According to InMobi, consumers spend around three and a half to four hours a day on their smartphones. In fact, mobile is expected to be the native screen for the next 500 million users, who will access the internet and other online products/services for the first time in the next 12-18 months. From shopping to watching movies to paying bills, almost all day-to-day activities are now carried out through smartphones. India is gradually becoming a mobile-first market, and over the next couple of years it is expected to transform into a mobile-only market. Given this context, investment in mobile advertising will see an upward trend in times to come. The use of mobile phones as a marketing medium offers the highest possibility of reaching out to a target audience through various platforms. Since engagement time with these platforms is high on mobile phones, this can even offer good conversion rates to these companies.

Challenges

Although the proportion of money spent by brands on mobile advertising has increased considerably and is expected to grow further, some bottlenecks are holding them back from leveraging mobile advertising to the fullest.

Ad fraud

Ad fraud basically involves corrupting an advertisement by placing a fake link. While ad fraud has existed since the beginning of online advertising, recent years have seen a sudden surge in ad fraud incidents. Industry analysts have highlighted that identity theft, mobile fraud and in-app advertising fraud are 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 for fraud prevention. As per industry experts, the deployment of blockchain in mobile ad formats can address this problem.

Need for unique plays

Another challenge for brands is standing out and getting noticed by the target audience in an overcrowded ecosystem. A number of advertisers are jumping on to the mobile advertising bandwagon, which is leading to the cluttering of mobile users’ screens. Industry estimates suggest that an average user receives over 65 notifications in a day. Given this scenario, brands really need to step up their push notification game and innovate with the content template used as part of their marketing communication.

Ad viewability

In a world where the potential points of contact with consumers are infinite, ad viewability is one of the major concerns for advertisers. In addition, various factors such as ad load speed, outdated ad serving technology and a 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

The challenges notwithstanding, the opportunities in the mobile advertising space will grow by leaps and bounds in the future, especially with the rise in smartphone adoption.

Today, most marketers do not differentiate between digital and mobile marketing while allocating budgets. In fact, according to Deloitte, mobile marketing will remain critically important for most brands over the next decade. Further, recent trends such as increased digital spends by brands, the provision of quicker and targeted RoIs, expanding 4G networks, and the coming of 5G will only accelerate the pace of growth of the mobile advertising industry.

By Diksha Sharma