New Delhi: Mobile ad spending is expected to grow at a compound annual growth rate (CAGR) of 59% to reach Rs13,325 crore by 2020, with affordable internet and cheap smartphones driving content consumption, says a report from Dentsu Aegis Network-owned social and digital media agency WATConsult.

Mobile ad spend stooding at Rs2,525 crore in 2016.

Titled Consumer Perception and Effectiveness of Mobile Ads in India, the report—based on interviews of 1,500 people across the country—highlights various aspects of mobile advertising like perception towards mobile ads, preferred ad formats, consumer preferences and concerns.

“There will be close to 450 million mobile internet users in India. Consumers are starting their digital journey through mobile for multiple activities like shopping, booking tickets, entertainment and content sharing. Eighty-six percent of the total time spent on internet by Indians is on their mobile devices. I believe marketers should not ignore this medium by calling it nascent anymore," said Abheek Biswas, associate vice-president (consumer insights) of WATConsult.

According to the report, affordable data connectivity has played a crucial role in bringing consumers onto mobile devices.

The rollout of 4G has led to a majority of Indians viewing ads on their smartphones (75%), followed by laptops (42%) and desktops (30%).

4G services happen to be the most used for data, with 66% respondents using them, followed by 3G (37%) and Wi-Fi (31%).

While people use mobile devices primarily for social networking, desktops and laptops are used for work and educational purposes.

In terms of online activity, most smartphone users use their devices heavily for accessing social networks and emails, followed by online banking, usage of e-wallets, watching videos and online shopping.

It is no wonder that 48% of the respondents said that they prefer social media ads the most, followed by video, email and search ads, when it comes to mobile ad formats.

The findings also reveal that while consumers perceive mobile ads to be more useful, they lack in terms of engagement as compared to desktop ads.

In terms of brand categories, mobile ads of electronic products, clothing and footwear, books, movies, games and music are clicked the most and purchases made.

While health and fitness as well as food and beverage ads are clicked a lot, they do not usually lead to a purchase.

Meanwhile, ads from categories including jewellery, pharmaceuticals and insurance products are not clicked much.

The report suggests that advertisers must make the ads for mobile informative, helpful and engaging in order to attract consumer attention, leading to increased clicks. Cheerful and interesting ads lead to purchases.

Consumers also feel that mobile ads are often intrusive and annoying. They give rise to security concerns as well.