Mobile advertisement spend to touch Rs10,000 crore by 2018: report

Advertising spending on mobile is forecast to touch Rs4,200 crore by 2016, according to a Mobile Marketing Association and GroupM study

The mobile phone has emerged as the third largest advertising medium in India after television and print. Photo: iStock Photo
The mobile phone has emerged as the third largest advertising medium in India after television and print. Photo: iStock Photo

Mumbai: The mobile phone, that ubiquitous device in your hand, has emerged as the third largest advertising medium in India after television and print, according to a report on the mobile marketing ecosystem released on Friday evening.

Titled ‘Mobile Ecosystem and Sizing Report’, the study, put together by the Mobile Marketing Association (MMA) along with GroupM, the largest media and marketing conglomerate in India, emphasized the meteoric growth of mobile media.

Advertising spending on the mobile was forecast to touch Rs4,200 crore by the end of 2016, and expected to grow to Rs10,000 crore by the end of 2018, the report said.

Although both India and China have crossed the 1 billion mobile connections mark, India is the fastest growing mobile market, adding more subscribers annually than China.

Moreover, rural markets now account for 60% of the total new mobile subscription growth in the country. According to the report, India will be growing faster, at the rate of 15%, than the global average of 5% to reach 1.2 billion mobile subscribers by 2020 and adding a total of 165 million new mobile subscriptions during this period.

In a bid to tap this growing consumer base, brand marketers are increasing their ad spending on mobile, especially in rural media-dark areas. According to the report, advertising spending on mobile phones is more than half the estimated Rs7300 crore ad spend on digital media.

“It is clear that brands cannot ignore the power of the small screen. It may be the third largest (after TV and print) in terms of ad spends but is by far the leader in terms of time spent and consumer engagement. India has the potential to become a global leader in mobile marketing innovation and it is our endeavour to work with the rest of the ecosystem to make this happen,” said CVL Srinivas, chief executive officer, GroupM who is also a member of the MMA Board in India.

The report projected an advertising spend on television of Rs27,014 crore for the year 2016. TV, it said, reached 553 million people who spent an average of 130 minutes per day watching television. In comparison, mobile with an ad spend of Rs4200 crore reached 680 million households, with average of 178 minutes spent on the device per day.

“Today, we are addressing a mobile-first generation and for brands this redefines their approach to marketing. You have access to data, you can execute relevant strategies and have the ability to measure effectiveness, all in real time,” said Srinivas.

Interestingly, the time spent on mobile does not show up in the advertising expenditure on the medium. That could be because of organizations still evolving in terms of familiarity with mobile marketing and their lack of expertise, best practices and understanding of ROI from the medium, the report said.

Industry sectors such as e-commerce and BFSI (banking, financial services and insurance) were leading the way in mobile advertising, while sectors such as consumer products were now going beyond the SMS and IVR based mobile solutions, explained the report, highlighting the role of local language in enabling the next spurt of growth in rural India.

“Marketers are aware that mobile is arguably the closest you can get to the consumer with its powerful promise of ‘immediacy’. This very concept of immediacy has transformed the mobile into a tool of action and transaction in a single swipe, click, call, tap or even a shake. With fast rising marketing spends, it is imperative to get the science of mobile marketing right, as the use of the mobile medium continues to become more pervasive,” said Preeti Desai country manager, Mobile Marketing Association India.

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