Mobile advertising market expected to grow 55% yoy

India has more than 617 million mobile connections today and the mobile is one medium of communication that is with the user throughout the day and night. It is further expected that the mobile advertising market will grow by 55 per cent year on year.
Pushpendra Mankad, senior vice president, Comverse Asia, said, “I definitely see mobile advertising becoming the prime vehicle of communication for all major advertisers in the country. The year on year growth of mobile advertising market is expected to be 55 per cent.”
Industry estimates had pegged the size of mobile web advertising in India during 2009 between $5 and $10 million (about Rs 47 crore).
Mobile advertising is still in a nascent stage in India and brands are experimenting with the medium by targeting niche segments.
The digital advertising space, on the other hand, has grown by about 74 per cent in 2008-2009 to reach Rs 680 crore, and is expected to be Rs 5,390 crore by 2011. Of Rs 680 crore, wireless application protocol based advertising was about 30 per cent of the mobile ad market, while opt-in SMSs contributed 10 per cent of the market share.
The potentialIt is also expected that when 3G roll out is complete in India, there will be an exponential growth in ad spending due to the ability to deliver rich media content and value added services.
Mankad said, “The biggest reason why companies’ advertising budgets have very less percentage on mobile advertising is that they are still at an experimental stage, but with the advent of 3G airwaves in India the VAS market is expected to flourish enormously.”
Globally as well as in India, advertisers recognise that because mobile phones are personal and ubiquitous, they can be an attractive medium for targeted and interactive campaigns that can command high response rates.
Mobile advertising can give operators an opportunity to leverage their relationship with the end user; their ability to interact with him; and their vast knowledge of him, to stream revenues from a new source. This protects profitability in an era where users are reluctant to pay more for communication.
Live exampleIn February this year, Comverse was selected by Kyivstar, Ukraine’s largest mobile operator with over 22 million users, to deploy a multi channel mobile advertising platform on its network, allowing Kyivstar to launch targeted promotional campaigns to its subscribers.
Kyivstar will use the Comverse HUB Mobile Advertising platform with advanced targeting and analytics capabilities to promote its own products and services to subscribers via multiple channels such as text messaging (SMS) and replies generated by self service options made possible by unstructured supplementary service data (USSD). For instance, balance notifications generated by Kyivstar’s existing prepaid billing system developed by Comverse will include promotions for Kyivstar‘s own products.
The futureAs of now, marketers in India are testing the waters in this arena. Most leading worldwide marketing agencies have already established activity in the mobile domain by opening dedicated departments to deal with mobile campaigns.
Analysts predict massive year over year growth for the budgets allocated by brands to the mobile medium, with expectations of over $10 billion in investments globally by 2011.
ChallengesMahesh Narayanan, country manager for AdMob, said, "Mobile advertising has challenges from three angles. There is the consumer angle, there is the publisher angle, and there is the advertiser angle."
He added that the challenge regarding consumers is in encouraging them to use this medium, for which users should be able to find content related to their interests on their mobiles. So, the breadth and depth of content categories need to increase.
The challenge with regard to publishers, Narayanan explained, involves making them understand the mobile medium as a real opportunity, and helping them recognise that there is significant potential for growth in how this medium can be used. And lastly to try and repurpose the content publishers create for other media, specifically for the mobile. Most publishers rehash the content from the online medium, whereas they need to create content that is customised.
As for advertisers, Narayanan was of the opinion that they need to be educated. Advertisers know that there are 600 million mobile subscribers in the country today and that a significant proportion of this volume uses the mobile web. Most advertisers, Narayanan believes, are not even aware of the opportunity this translates to. He said, “We work with a lot of agencies and educate them on the opportunities that exist on the mobile web, (those agencies) in turn can inform their clients. It is medium education that is important for the advertisers.”