The recent lockdown, due to the ongoing pandemic on account of COVID-19, saw companies re-strategizing their marketing mix. With traditional media severely impacted, brands took the digital route, specifically targeting consumers through their handset devices. While a majority of digital spends in India is happening on Mobile, the pandemic has accelerated this trend. It is estimated that 45-55% of the digital advertising budget is now spent on mobile advertising and this share is likely to increase to around 65-70% by 2022. According to Anmol Puri, Partner, Deloitte India, “In 2019, the mobile ad spend in India was roughly around Rs 6,000-7,000 crore growing at a healthy CAGR of 40% over the past three years. In the next three years, I expect mobile ad-spends in India to continue to grow at a CAGR of around 45% and reach about Rs 18,000 crore – Rs 20,000 crore by 2022.”
Sharing this sentiment is Vidhu Sagar, Managing Director – India, MediaDonuts who says, “We are looking at accelerated growth of digital spends overall and correspondingly, a faster growth in mobile spends too. Growth rate should continue to hover around the 25% - 40% per annum mark for mobile for next three years. So, mobile spends will be approximately Rs 14,000 crore in 2021, going up to a sizeable Rs 20,000 crore in 2023.”
BRAND CONSUMPTION ON THE GO
The Mobile is now the primary screen for all the connected consumers in India. With consumers spending close to 3.5-4 hours a day on their smartphones, brands are increasing shifting their focus to this touch point. Currently most of the mobile advertisement budget, across many categories, is spent on online videos, social media promotions and paid search.
The majority of spends on Digital in India is Mobile, invariably meaning that the majority of the digital spends in India is happening on Mobile only. The growth rate of digital and Mobile for the last 2-3 years has been around 30 – 35% YoY. According to Dentsu Digital Report 2020, on Mobile devices, the expected advertising spends grew by 41%, which overtakes the desktop reach spends’ share of 52% to reach Rs. 9,042 crore by 2020. Furthermore, the expected spends will reach a share of 64% by 2022. With pandemic and resulting need of going digital becoming a necessity, one feels that a similar growth rate of 30-35% will continue for couple more years if there are no major lockdowns or events like the pandemic or recurrence of the same.
COO, Isobar India
Categories that are heavy on Mobile include categories such as FMCG/CPG, Consumer Durables, Auto, BFSI, Telecom, Retail and Travel. In addition, new sunrise sectors such as e-commerce and digital-first brands such as online retail and fashion, food delivery, pharma, grocery, ed-tech, media and entertainment, hyper-local services, fin-tech and gaming are the big spenders on mobile with their entire business, customer experience and user base centred around Mobile. Suneil Chawla, Co-founder, Social Beat says, “The largest spenders on mobile marketing are FMCG, e-commerce, retail, BFSI and auto. The new sectors really ramping up are ed-tech, gaming and mobile-app only start-ups who have found millions of Indians coming online. From entertainment to commerce and productivity, Indians have found their answer on the mobile device.” He adds, “We see even traditional advertisers who used to spend on Television, Hoardings and Print, shift significant budgets to Digital. On Google and Facebook, if a brand lets the algorithms optimise, 90% of the spends are on mobile with 10% on desktop and tablets.”
According to the ‘Contribution of Smartphones to Digital Governance in India’ Report By The India Cellular and Electronics Association (ICEA) in partnership with KPMG India, India is expected to get 829 million smartphone users by 2022. In addition, data usage has increased from 2.7GB per month in 2016 to roughly 10.4GB per month in 2019, while prices have reduced from `152 per GB in 2016 to `10 per GB in 2019. The increased mobile adoption presents marketers and brands with a huge opportunity. Gopa Kumar, COO, Isobar India says, “There has been an exponential growth in mobile adoption in India in recent years. We all have been talking about the pre-Jio and post-Jio change. Post-Jio, there has been a massive increase in mobile penetration in India. No longer confined to tier 1 cities, the usage has taken off primarily because of falling data and handset prices. By 2022, mobile penetration is expected to reach 92%, giving huge opportunities for marketers and brands to reach out to these consumers.”
Mobile-first economies like India have leapfrogged over other countries as time spent on Mobile has grown due to cheap internet tariffs. For mobile marketing too, India is following the trend set by more advanced markets: share of mobile and digital is growing rapidly vis-à-vis offline media. Going forward, Vernacular and Voice be the newer trends accelerating mobile growth.
Managing Director – India, MediaDonuts
Ashwin SL, VP – Marketing, MoEngage says, “Brands are using mobile as the key channel to enhance their engagement and deliver their brand experience to customers, wherever they go. Mobile marketing has become integral for any omnichannel strategy, with cheap internet tariffs and high mobile device penetration in India. It makes it easier for mobile first brands to capture target audience quickly.”
Says Niraj Ruparel, Head Of Mobile & Emerging Tech, GroupM India, “The speed of mobile adoption in India in the past few years has made India an exclusive market for mobile marketing. As per the recent Kantar iCube 2020 report, the estimated monthly active internet users stand at 574 million, which is a growth of 24% over the previous year, taking the penetration to 41%.”
ADDRESSING KEY CONCERNS
While experts also say that everything on Digital is now Mobile, so everyone who is spending on Digital would be investing in Mobile, there are some areas of concerns which have to be addressed. Many of these concerns remain the same as it is for Digital, which is the measurement, privacy, viewability, and brand-safe environments.
Anjali Hegde, Chief Data Officer, Mediabrands India highlights identity theft, mobile fraud and in-app advertising fraud as growing concern areas. Hegde says, “While there are a lot of exciting things happening on the mobile space, there is also a worrisome trend of increasing identity theft and mobile fraud, which is also raising its head. These are issues which are plaguing the app-developers and marketers. In-app advertising fraud is a considerable threat that marketers need to be wary of. In an AppsFlyer report from 2019, the APAC region was seeing 60% higher levels of in-app ad fraud than the global average. India was the second hardest-hit market after South-East Asia.”
On her part Vasuta Agarwal, MD, Asia Pacific, InMobi observes that as many marketers are still at the early stages of Digital Marketing Maturity (DMM), the DMM struggle is real. Agarwal states, “According to the Marketing in the New Normal survey, over 40% of marketers find their organisations still in the early stages of Digital Marketing Maturity. This leaves them unprepared to tackle a post-COVID world. In order to achieve their goals, marketers are actively working towards building omnichannel experiences, accessing near real-time consumer data and leveraging automation across digital channels. Brands will look towards Mobile to understand, identify, engage and acquire consumers and to shape seamless customer experiences.”
Another challenge for brands is standing out in the cluttered environment. “Lots of advertisers are jumping onto the mobile screen. But the mobile user’s screen is getting cluttered with hundreds of emails/push notifications. The average user receives over 65 notifications in a day – which translates to roughly about one notification every 15 minutes during the user’s waking hours! So brands really need to improve their push notification game and need to stand out in the context and the content of their communication with rich and personalised notifications that are hard to miss. This will drive growth for meaningful and contextual marketing focused on building long term relationships with consumers beyond transactional offers/discounts/coupons”, says Ashwin SL, VP - Marketing, MoEngage.
THE GROWTH DRIVERS
What is driving this aggressive growth of mobile marketing in India? According to industry leaders, affordability of smartphones and cheap mobile data plans have made Mobile the primary means of accessing internet for most Indians. In addition, proactive government initiatives such as Digital India mission, vernacular accessibility and rapid growth of mobile apps catering to entertainment and convenience in purchase of goods and services have boosted the adoption of smartphones in India.
It is important to mention that most marketers today do not specifically differentiate between digital and mobile marketing when allocating budgets. According to Deloitte India’s Anmol Puri, mobile marketing will remain critically important for most brands over the next decade. Puri says, “Increased spend during recent times, demonstration of quicker and targeted ROIs for brands, expanding 4G networks and 5G in the future will only accelerate the pace of growth in our country where mobiles are an integral part of everyone’s way of life despite the economic divide.” He adds, “As customers become more immersive with their devices coupled with increased mobility, their preferences tend to shift to a more on-the-go content. Mobile becomes the preferred screen, providing brands and marketers the opportunity to target very precise audiences, with very relevant content, at the most appropriate time.”
• Biggest spenders on Mobile: E-commerce and digital-first brands such as online retail and fashion, food
delivery, hyper-local services, fintech and gaming. Along with CPG, retail, BFSI, and consumer electronics/durables
the big spending verticals together account for 80% of the mobile ad spends in the country.
• New sectors that are ramping up spends: Pharma, grocery, ed-tech, media and entertainment, gaming, fin-tech, mobile-app only start-ups
• Auto, telecom and entertainment expected to increase mobile ad-spends
• Most of the mobile advertisement budget is spent on online videos, social media promotions and paid search.
Satya Kiran, CEO, Whistle says, “A big change in mobile marketing has been the increase in interactivity. Earlier you could see an ad on the mobile and that was it. Now the call-to-action is very clear. Once a consumer sees an ad and is interested, the link to the website, click on app and download link are clearly visible and the customer can engage with the brand seamlessly across platforms. The other big feature, which will be a big phenomenon in the next 5-6 years, is Voice which is evolving at a fast phase.”
Speaking about the factors driving growth of mobile marketing, InMobi’s Vasuta Agarwal notes that mobile is where the consumers are. She elaborates, “Mobile is now the primary screen for all the connected consumers in India. Consumers spend close to 3.5-4 hours a day on their smartphones. Mobile will be the native screen for the next 500 million users who will access the Internet and other online products/ services for the first time using a smartphone in the next 12-18 months. Mobile already accounts for the lion’s share of screen time among all screens and will continue to do so with better experiences through apps, data connectivity and rapid expansion of digitised services across the country.”
For Vidhu Sagar, Managing Director – India, MediaDonuts deeper penetration of smartphones into rural markets will be a factor. Sagar says, “Rural markets prompted by cheaper handsets and low tariffs will continue to propel growth. The Gen Z segment (born 1997-2012) will add the kicker. Data prices will stabilise at a decent level, still low enough to fuel explosive growth. After social (Snapchat, Instagram etc.); utility apps (such as education, banking, payments, fitness, travel etc); e-commerce/shopping (Fashion, Lifestyle, Food, Delivery); entertainment (Music, OTTs); and gaming will be key contributors.”
While many users are using their mobile for entertainment and communication, we shall see more solutions for productivity, finance and business processes as being the next drivers of growth. Some examples would be Khatabook, Shop101, Groww, PayTM Money which are significantly changing consumer behaviour to do more online.
Cofounder, Social Beat
The speed of mobile adoption in India in the past few years has made India an exclusive market for mobile marketing. A big change was led by Jio which is at the forefront of this change when it launched low-cost phones, entering the telecom business. New initiative such as Jio-Google partnership will further broaden the market. With more consumers using smartphones, mobile advertising is likely to boom. With improved connectivity and cheap internet data, it is easier for brands to reach a broader audience through mobile advertisements. Another game changer will be the rollout of 5G which could lead to massive growth in mobile marketing.
GroupM’s Ruparel is also betting big on Voice based platforms. “Brands find it hard to promote product in media dark areas such as rural regions where the internet connectivity is low and TV penetration is also not adequate. Such regions can be targeted through voice-based platform,” he says, adding that agencies are investing heavily in such platforms in anticipation of new opportunities that they could possibly unlock.
FUTURE GAZING: TRENDS THAT WILL EMERGE
If we look closely at the market trends, as brands strive to drive personalised experiences at scale, they are actively seeking to access real time data signals from users – demographic, technographic, location and gyroscopic, and combine it with passive and stated data. Mobile, if leveraged right, can offer real-time consumer intelligence along with out-of-the-box analytics that shape brand interventions at every stage of the consumer journey.
Overall, there is consensus among experts that Social, Video, Search and Entertainment would remain central pillars of the mobile growth story. On top, going forward, Vernacular and Voice be the newer trends accelerating mobile growth.
Industry trends indicate that spends on Mobile will increase and is expected to be amplified due to COVID-19. Players will look for more engagement on the back of their own MarTech and AdTech investments for digital outreach. Says Gopa Kumar, COO, Isobar India, “Hyperlocal marketing, rise of m-commerce, use of AR/VR, mobile gaming/e-games and use of Voice across Mobile to drive various engagements are some of the trends as well as how brands are using the mobile space to reach out to its TG. In addition to these, vernacular advertising will drive further growth of mobile marketing in India.”
The biggest game-changer will be the hyperlocal marketing, which companies are now deploying now. The other will be the mobile-first strategy which companies are deploying now and adapting to. With smartphone penetration expected to see a phenomenal growth, we expect to see high growth rates, close to 300%-400%.
Chawla of Social Beat adds to this, “The new Vs of Video, Vernacular and Voice are currently the major innovations. Video has already got adopted by most of the leading brands. Vernacular is now seeing strong traction with many brands communicating in 10+ languages. Voice is slowly taking off, with a few brands integrating with Amazon Echo and Google. The new frontier would be augmented reality. We are seeing early signs in e-commerce, auto and all the AR filters on Instagram. It will be a common usage in the next 24 months.”
Hegde of Mediabrands reiterates this, adding that video and commerce are the two drivers of growth for mobile marketing in India. She says, “The thirst for video content is not abating and the COVID-19 impact has only been to increase the digital video consumption. Around 70% of the Indian market’s data usage is devoted to video. It is often used as a tool for learning and research, particularly to validate purchase decisions. Besides content, the entire work processes have now been dependent on video conferencing – be it business meetings or education. Video has become a productivity tool.” She adds that Mobile is expected to play a critical role in almost every part of the consumer journey from discovery to the transaction and ending in advocacy. With the new normal that requires social distancing, physical retail is being replaced by e-commerce, which in fact is predominantly m-commerce.
While brands increase customer engagement via the mobile, it is also critical for them to stay abreast of the changing consumer behaviour and understanding the likes, dislikes and journey of their consumers first and then engaging them with relevant and contextual communication. In fact, the latest Q3 2020 Forrester Wave for Mobile Engagement Automation report highlights this and recommends that marketers should first look for insights into consumers’ past engagement, behaviour, journey, and preferences and then craft a cross-channel engagement strategy. Simply put, whether it is the mobile platform or any other platform, listening to the consumer and garnering key insights is the foundation for any successful campaign.