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Mobile Ad Industry in India Bound North
Mobile Ad Industry in India Bound North
By: iMedia News Bureau

 

Mobile is getting more ubiquitous in India

In the new millennium India has seen a tremendous rise in teledensity from below 5% in 2001 to over 70% in 2011 currently, slated to rise to 85% in 2012. This has been made possible by the exponential growth of mobile phone usage. Today, the number of people using mobile phones in India stands at over 700 million. Obviously, the mobile advertising industry is headed northwards in an almost straight line.

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According to a PTI report, the mobile ad industry is “expected to grow by around 300 per cent to reach a turnover of Rs 200 crore over the next 2-3 years”. "The number of mobile-users is rising significantly with 10-15-million new additions every month. Also, since the cost of interaction and cost of transaction is much lower in this medium as compared to TV, print or radio, marketers are using mobiles to promote their services and products,” the report quotes Amit Lall, Head Mobile Marketing, Mobile2Win, a leading mobile VAS company.
 
This is significant news for Indian advertising and marketing professionals as today any brand that neglects mobile in there marketing activities will not only alienate themselves from a very effective advertising medium, but also one that is extremely cheap compared to other. And global figures paint not just an increase in mobile ad shares, but also with the use of smart phones and 3G /on the rise, of different forms of mobile advertising.
 
A report from early 2010 - after Google’s purchase of AdMob and news of Apple buying Quattro Wireless, both mobile ad companies - states that the advertising industry passed the $1 billion value in the US, despite being only $416 million worth in 2009. In the UK smart phone adoption was slated to be the reason behind an explosive growth on the UK’s mobile advertising market that grew 116% to £83 million in 2010, according to research from the Internet Advertising Bureau (IAB) and PwC. In Germany, the mobile advertising industry grew by almost 40% in 2010 with the number of companies working in mobile advertising growing by 27% to 248 in the period.
 
The story is similar in India. The total advertising industry in India is worth Rs. 30,000 crore of which mobile advertising is minuscule at Rs. 25-30 crore. It is still at a nascent stage, as the understanding of the medium is very low and the perception of marketing professional being that mobile advertising is nothing but SMS advertising. However, the industry is expected to grow 100% next year and boosted, like in the UK, by smart phones and increase in 3G services, shoot up at much greater percentages after that.
 
Mobile advertising has huge advantage over traditional advertising media like print, TV and radio where one can never know whether the targeted audience will first of all take notice, and if they have how many have seen it. Mobile being a very personal and intimate medium, one can rest assured that the ad will be seen. Also, there is the potential to target audiences according to their profiles. The only drawback of the medium is that the rate of conversion of ads to actual business is about 1-2 percent and 8-10 percent fro free offering, much lower than other media.
 
Despite these, India is today the largest mobile advertising market in Asia pacific according to research data by InMobi Network that showed a growth of 22% in Indian mobile ad impressions in just three months from Oct to Dec 2010. “The Indian mobile advertising market continues to show rapid growth due to the improving ad ecosystem. Major publishers are bringing their media into the mobile channel while brands are simultaneously discovering the power of mobile advertising. This healthy ecosystem along with 3G network infrastructure improvements will position India as one of the most influential mobile markets on the globe,” said James Lamberti, VP of Global Research & Marketing at InMobi.
 
An interesting finding of the report is that smart phones till remain relatively nascent in the market with 88% of all mobile ad impression coming from advanced phones and Android and iPhone OS have yet to gain significant ground in India with only a 4% share in the market.
 
However, add this to the 3G services on offer, and increase in the number of smart and high end phones, and you’ll see a mobile ad growth story that would be the toast of the ad world as can be seen from the example of UK above. The question thus is, are brand managers and marketing professionals ready for mobile yet?
 
Tags: Mobile Advertising Industry, Teledensity in India, Mobile Phones, Smart Phones, Android phones, iPhone, 3G services