Ad spends on mobile media to reach Rs 4,200 crore by December

With increasing smartphone penetration enabling marketers to tap both urban and rural segments, advertisement spends on mobile media is estimated to reach Rs 4,200 crore by December and Rs 10,000 crore by 2018-end, a report said.

'Mobile Ecosystem and Sizing Report' by the Mobile Marketing Association (MMA) and GroupM said mobile is the third largest mass media in India in terms of ad spends, after television and print.

"The growing use of mobile in rural media-dark markets has made brand marketers look at increasing their ad spends on mobile marketing.

"While spends are increasing, organisations are still evolving in terms of familiarity with mobile marketing, with lack of expertise, best practices and understanding of ROI from the medium being the top reasons for impediment of growing further budgets on mobile," it said.

It noted that industry sectors such as e-commerce and banking, financial services and insurance are leading the way in mobile advertising, while segments like FMCG are now going beyond SMS and interactive voice response based mobile solutions.

"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," GroupM South Asia Chief Executive CVL Srinivas said.

The report also pointed out the role of local languages. 

"India will move quickly from a one English language format to a multi-lingual format in the next five years. This will have the same impact as local radio, local television and local newspapers.

"We will see an explosion of content with local language. We will have place for national concepts and adapted local language concepts, like KBC," said D Shivakumar, Chairman and CEO, PepsiCo India Holdings and Chairman of the Mobile Marketing Association.

The report observed that in the last five years, rural tele-density in India has increased by 60%, rural mobile internet subscriber base saw a 90% year-on-year growth in 2015, and rural subscribers are using the internet primarily on their mobile phones.

"While urban consumers are adopting 3G and 4G technology at a much faster rate, the growth spurt in new technology and smartphone penetration is coming from the tier II, tier III and rural markets.

"There is a high demand for affordable smartphones in rural markets, as mobile phones are replacing or supplementing TV as an important entertainment and marketing medium, alongside other traditional communication methods," it said.