The e-commerce sector will emerge as the biggest spender on mobile ads this year, say industry experts. Inputs from experts that included media planners, mobile heads and marketers were included in the Mobile Ad Spend Report 2015 released on the occasion of the inaugural Maddies Mobile Advertising Awards held in Mumbai.
To get an idea of the ad spends involved, media planners we spoke with suggested that just in the festive season, overall ad spends by e-commerce are expected to increase by 40 per cent over 2014 to reach around Rs 1,300 crore this year. The overall ad spends by e-commerce according to one planner, who did not wish to be named, for the year would be close to (according to the lowest estimates) Rs 2,500 crore.
If we consider just 10 per cent of this amount will go into mobile, which would mean an amount of Rs 250 crore, which is approximately 35 per cent of the estimated total mobile ad spends of Rs 720 crore. The head of one mobile agency said that e-commerce accounts for 65-70 per cent of overall mobile ad spends in the country, which would mean a figure closer to Rs 500 crore.
“The three main categories that are driving mobile ad spends are e-commerce, support and affiliate services (Housing.com, etc.) and classifieds (OLX, Quikr, etc.). If you don’t consider search advertising then these three categories make up more than 50 per cent of mobile ad spends in India,” said Pancham Endlaw, Head (Advertising) of Opera Mediaworks.
Combined with a new round of investments that most of the large players have realized this year, their spending power does not seem likely to reduce in the near future. Another factor that has also led to increased spending by the e-commerce sector is the recent rise in popularity of mobile payment companies. This sector is still nascent and is seeing some consolidation but as its popularity rises this will lead to a new sub-class of advertisers within the sector.
Madan Sanglikar, Co-founder and MD of Affle said, “Growth is coming on the back of growing users, increase in demand, new and innovative creative opportunities and native advertising. E-commerce and app promotion is the biggest category driving the spends.”