Mobile ad spends to grow by 63%: Mobile Ad Spends India Report 2018
The report estimates that total mobile ad spends will reach Rs 3,635 crore in 2018
Published - 01-November-2018
The increased use of 4G and rise in the sale of low-cost smartphones have made India the second largest online market, after China, with over 460 million internet users. Mobile, now being the centre of digital ecosystem, is eventually turning India into a mobile-only market from a mobile-first one. In the next two to three years, another 3-4 million internet users will be added and they will hardly be through the desktop route.
A report by Google, Bain & Company and Omidyar Network states that average data usage on mobile phones in India stands at about 8 GB a month per subscriber. After consulting media buyers, advertisers and mobile and digital agencies, we concluded that the mobile ad spends continue to grow at a healthy 63 per cent, against 74 per cent last year, as estimated in the Mobile Ad Spends India Report 2017. This decline is due to an increase in the base. The number is estimated to be Rs 3,635 crore. The category is expected to maintain a growth rate of 50-55 per cent in 2019, reaching around Rs 5452-5635 crore by the end of 2019.
Much like last year, e-commerce, consumer durables, FMCG and BSFI continue to remain the biggest spenders on mobile advertising. Marketers are embracing this channel to tap close to half a billion users in the next four years as bandwidth speed and rural reach improve.
Vasuta Agarwal, VP & GM, India, at InMobi, says, “As the growth in urban internet penetration moderates, rural India is set to drive the next phase of growth in the country. Better digital infrastructure and entry of players in affordable smartphone segment is set to change the internet landscape in the years to come. By 2020, 50 per cent of India’s internet users are estimated to be from rural India.”
3Vs: voice, video and vernacular leading the way
With the ongoing paradigm shift in India’s internet landscape (from metro to rural), video, voice and vernacular content will undoubtedly drive the future of advertising in this market.
This was evident when Google launched Google Go, a lite version of its main application Assistant this August. Powered by natural language processing and speech synthesis AI, this technology reads billions of pages in different languages such as Hindi, Bengali, Malayalam and Tamil on 2G connection.
With mobile data becoming more affordable, video consumption on mobile is becoming commonplace. As a result, engagement and response to this format is outpacing other mobile ad formats (banners and static interstitials). That’s why OTTs are now increasingly providing advertising opportunities.
According to InMobi State of Mobile Video advertising 2018 report, 31 per cent of advertisers are eyeing this format. And by 2020, India is expected to become the second largest video viewing audience globally. Going forward, this format will, undoubtedly, command a lion’s share of brands’ ad money, followed by display, search, social, native and SMS. Another format that still has a long way to go is voice. This market has seen a steady pick-up in the last six months. While Alexa, Google Home etc. are driving adoption of voice, the whole ecosystem of voice apps and smart devices needs to grow before they make any significant impact.
Vernacular strategy is another hot trend that’s been tested by almost every brand. Majority of OTT players have earmarked resources exclusively for regional content. Siddhartha Roy, COO, Hungama Digital Media, is already seeing it play. “We are an entertainment product. For us, regional tier-II market is extremely important. Consumers are coming in for regional content. So we have the ability to offer these communities to advertisers for their products and help them channelize their communication.”
However, behind the robust growth in mobile ad spends is the persisting issue of ad fraud, as the primary strategy to counter it has turned out to be ineffective and inefficient. As a result, it continues to reduce potential ad revenue from legitimate apps. However, industry experts believe that the advent of blockchain has the potential to address the problem.
Other technological challenges that prevail are in the form of low viewability, absence of metrics, banner blindness, brand safety, duplication of impressions and attribution. But industry experts are confident that with the evolving mobile ad industry, these issues will be addressed eventually.
Also, with emerging GDPR laws in India, digital marketers will have very less information and data to be leveraged for targeting users, especially on mobile. And this deems to be more challenging.
The daunting task of creating high-quality mobile ads is facing marketers right at its face. B Krishna Rao, Senior Category Head, Parle Products, says, “Customisation and focused creative for this medium are challenges. When advertisers come up with creative, they cannot be adapted from mainstream to mobile. Hence, there is a need to think from a mobile-first perspective. Within that, elements need to be highlighted in a short span of 6-7 seconds to grab consumer’s attention. Not all agencies offer such solutions. That mindset needs to change and we need to evolve and deliver on this medium.”
But things are already starting to happen as marketers and agencies are working towards creating campaigns exclusive to this medium. And, 2019 will definitely witness interesting work in this space.For more updates, subscribe to exchange4media's WhatsApp Channel- https://bit.ly/2QUdLCK