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Guest Column: Making mobile the 1st choice medium for tomorrow’s mktg

Guest Column: Making mobile the 1st choice medium for tomorrow’s mktg

Author | Tapan Pal | Monday, Mar 04,2013 8:28 PM

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Guest Column: Making mobile the 1st choice medium for tomorrow’s mktg

Mobile marketing or the practice of using mobile devices (cellular phones, Tablets etc.) as a marketing medium has been experiencing tremendous growth in the last few years globally. Mobile is emerging as one of the most effective channels of communication because of the high level of engagement with users. They use it for keeping connected –as a phone and social networking, for searching, payment transactions, for news, for music and movie downloads, for sharing jokes, photos and any other updates. As people carry their phones with them all the time, transactions and payments can be completed anywhere and anytime. Most importantly, being the first personal mass media, mobile could make it easy for the marketers and advertisers to target specific consumer segments based on age, gender and location.

Current Status in India:
Having said that, in India mobile is not yet on the mindset for most advertisers and industry leaders including brands and agencies. As per a report published by the Mobile Marketing Association (MMA), the estimated size of the current mobile advertising spend in India is a meager Rs 180 crore ($33 million) which is just 10 per cent of the overall digital advertising spend in India. As a result the growth in advertising revenue is not keeping pace with mobile internet penetration in India. In India, the Cable & Satellite penetration is 140 million, DTH & Digital Cable combined penetration is 59 Million and Internet penetration is 137 million. But there are 934 million mobile users in India (which is 78 per cent of the total population) of which the mobile internet penetration is 120 million. Mobile could be the youngest medium but in reach it’s far above the traditional mediums like Television, Print and also Internet, the most talked about medium. Even the penetration of mobile internet is at par with television and internet. But very surprisingly, still the advertisers are considering mobile only as a support medium and devoting only an experimental budget. What we think is that the advertisers are hesitating to spend more on mobile ads and campaigns as they are facing difficulties to figure the effectiveness of the same. In our understanding there are few unanswered questions that are restricting Indian advertisers to allocate more money on mobile medium.
1. Initial apprehension towards new medium: Any new media face the same challenge to justify its efficacy in the initial stage over the existing mediums. In India, mobile is going through the same phase. Though the penetration of mobile phone is increasing but how powerful this tool is for marketing communication is not yet very clear.

2. How to use it effectively: The industry is still indecisive about the ways to effectively explore this medium. "Advertisers are trying to navigate the growth of mobile and are still trying to figure out how to exploit this," said Praveen Sharma, head of product and solution sales at Google India. Only a few years back, Roadblock (ads through text messages)was the only way of mobile advertising but it lacked innovation and also was intrusive for the consumers and was proven ineffective to create impact. Lot of R&D is going on since then to use the mobile medium innovatively and effectively but the assured and verified ways are yet to be discovered. The marketers are not yet sure what can be done with mobile advertising beyond SMS and basic standard banner.

3. What is the return on monies spent: Unlike other mediums, there are no analytical tools for measuring and benchmarking the efficacy of mobile campaigns and ads. Lack of clarity is still there on how many clicks a mobile ad is generating and how many transactions are happening in this process. As a result lots of ambiguity is there in understanding the ROI which is the biggest barrier for mobile medium to gain the confidence of the marketers.  

How can we make Mobile a preferred advertising medium in near future?

Despite the challenges that this new medium is facing today, we sure get a very good hint of the way in which mobile advertising is going to be a dark horse in the world of technology driven gen-next marketing in the coming years where “on the go” and ‘immediacy’ are the mantras. There are various indications of the sparkle that we can see in future of mobile marketing:

1. Penetration of Sophisticated mobile devices is low but increasing: 

Today there are only 27 million smartphone users in India which is just 3 per cent of the total mobile phone users whereas worldwide, approximately one in six phones (17 per cent) is a smartphone.
According to a research done by market research firm, IDC, China, US, India, Brazil and the United Kingdom are the Top 5 markets for smartphone shipments. As per the report, though the smartphone penetration in India is currently among the lowest in Asia/Pacific, the market share on India is expected to grow by 57% by 2016. (Table shown below)

Smartphone Markets & Market Share for 2011, 2012 and 2016 (based on shipments)
 



Smartphone market in India seems to have great potential for future despite of having low adoption today. Even in this present scenario around 200 million Indian mobile subscribers use web on their mobile and more promisingly in metros about 57 per cent of Indian youth is part of the mobile internet users group. This number is already pretty huge and surely to grow with the penetration of smartphone in future. With the technology development, the price of the sophisticated mobile devices is going down and penetration is going up.

2. Affordable price of the Smart-phones and data plans driving the adoption:

The Indian market already has handsets that support internet access priced lower than Rs 5,000. Several GPRS and EDGE compatible handsets are available at even lower prices. Prices are expected to go down further over the next few years and in return penetration of smartphone is about to increase along with the adoption of mobile internet. Affordable data plans are also playing important roles for the wide scale adoption of mobile internet. The tariff rates for 3G plans have been reduced by up to 70 per cent by the telecom operators in India. This step could lead the user adoption and usage of mobile internet to the next level as 3G is expected to offer significantly higher download speeds and much better user experience.

3. Changing Media Consumption Habit:

As per a study of Mobext India on 2012, the growing adoption of mobile phones is cannibalizing other media consumption habit as 21 per cent of smartphone users read a book in print less, while 22 per cent watched less TV and 16 per cent reduced time on the internet via a laptop. Thirty per cent of tablet purchasers read fewer books in print with 31 per cent watching lesser TV. Another pan India offline study conducted by Nielsen on behalf of Google India revealed that use of mobile internet as a research tool to make purchase decision is increasing significantly. As per the study 46 per cent respondents used mobile internet for research and 22 per cent of Tier II consumers used mobile as the sole device for accessing internet for research.  Now with the change of media consumption pattern, mobile internet is emerging as a very strong medium to influence the buyer’s mind.

4. Rise of the new Purchase Influencer group:

The most important factor which is going to play the pivotal role for the success of mobile marketing is the growing mobile addiction of Indian kids. At present more than 30 million urban Indian children own personal mobile phones. With the change of our socio economic structure, the generation Z (born between the years 1994 and 2004) is becoming one of the most important influencers in family purchase decision and thus an eye candy for marketers. An Ericsson report reveals that Generation Z children in cities like Delhi, Bengaluru and Mumbai (together constituting 45 per cent of such children) access internet via their phones or smartphones to update status on Facebook, tweet and stream videos. On an average, they spend about 40 minutes every day on these activities. In fact, the time spent by Generation Z on mobile phones rivals that spent on watching television and is expected to surpass it in the near future. This shows, the new generation is not only adopting this new medium but also becoming loyal to this.

In Sum
We think these are very clear indications which show the possibilities of mobile media to become an important medium for marketers. The convenience of personalised, on the go internet access coupled with rising popularity of web-based applications such as email and social network could impel the market forward. But we also believe that for advertisers, strong analytics and monitoring system should be in place to measure the efficiency of the execution. Very recently, InMobi, the Bangalore-based mobile ad network has raised $200 million in funding from Japan's Softbank acquired Overlay Media, a UK-based developer of mobile data analytics. This kind of initiatives on data analysis and result evaluation could wipe out the ambiguity of the ROI and excite marketers to allocate more money on mobile medium. And certainly, with surplus funding support, more innovative, engaging and effective mobile contents, applications would be developed and a lot of display banner only campaigns would start moving from PC to mobile. This, in return could elevate and promote the mobile medium as the primary choice for the marketers.

Tapan Pal is the founder of MediaSys Solutions, an integrated media solutions company. He has more than 30 years of experience in all key verticals of media

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