Business News/ Industry / Mobile advertising grows rapidly in India but share remains small

New Delhi: India’s online and mobile advertising market is growing at a rapid clip, albeit from a low base, holding out happy tidings for Internet and new media companies that remain dependent on ad revenue, experts say.

“Mobile advertising in India is the fastest growing among all verticals in the digital advertising space. This is primarily because consumers are spending more time on mobile Internet activities as compared to desktops, subsequently growth in desktop Internet is fast getting saturated," said Praseed Prasad, national trading head (digital media) at GroupM, the media buying agency of WPP.

The online advertising market in India grew by 29% in the year to 31 March 2013, to reach 2,260 crore, according to the Internet and Mobile Association of India (IAMAI).

Mobile advertising currently accounts for a small share of about 10% of this market though spending on mobile ads doubled from 115 crore in fiscal 2012 to 230 crore in the following year.

Nilotpal Chakravarti, associate vice-president of IAMAI, said: “It is one of the fastest growing channels along with social media. Every brand is looking to have its presence on the mobile platform either through apps or through their mobile site."

While mobile advertising continues to grow in India, the base still remains small, and lags usage of mobile as an Internet/data consumption device. Mobile advertising at present is a fraction of the total advertising market in India, which was worth 38,597 crore in 2013, according to data from GroupM.

It is expected to grow more rapidly in the coming years as advertising catches up with usage and time spent on mobile devices.

“It should definitely overtake outdoor ad spends in the next few years and radio subsequently in the coming five-seven years," added Prasad.

Mobile advertising is currently dominated by search ads, which account for over 75% of mobile advertising. Display advertising on mobile devices is expected to grow significantly.

There have been challenges related to screen size and return on investment for display advertising on mobile devices. A number of innovations in ad formats, growth in smartphones, larger screen sizes and penetration of tablets will ensure that mobile advertising continues to grow at a fast pace.

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Updated: 26 Jul 2014, 12:42 AM IST
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