70% of India’s digital advertising budget spent on mobile: Report

As consumers continue to spend more and more time on their smartphones, investments towards digital are rising. In 2017, 70 per cent of India’s digital advertising budget was spent on mobile, wherein traditional FMCG and BFSI brands also saw uptake in something as advanced as programmatic spend. 

According to the ‘Mobile Marketing Ecosystem Report 2018’ by MMA and GroupM, the global growth of the media ad spends industry in 2017 was 3 per cent, whereas India saw a 13 per cent growth in FY 2018. On the mobile marketing front, 70 per cent of the Indian digital ad spends goes on mobile. 

Millennials – accounting for 30 per cent of the Indian population and 72 per cent of the Facebook user base in India – are the key target audience among most marketers today. It is not only that the millennials spend disproportionate time online, they are also very engaged – 72 per cent of Indian digital shoppers are millennials and consume more than 102 minutes of streaming entertainment (music + video) every day, making digital & mobile a very significant part of an advertiser’s media mix. 

4G networks, cost effective data plans, smartphones has led to mobile becoming a ‘Torchbearer’ that is driving digital ad spend growth in India. This has shaped, Digital equals Mobile to Mobile now greater than Digital, India’s has sprinted towards mobile growth. 

The near future will not only see growth of mobile marketing in India, but mobile will enable growth of other mediums via Integrated Marketing as newer technologies grow. Going forward mobile video, audio, and gaming industries will power mobile advertising spends. However, IoT, AR/VR and AI will create newer channels to grow mobile in India and give marketers new platforms to experiment. 

Programmatic Ecosystem in India 

The advertising industry is on a march toward automation. While India is still in the early stage of adoption compared to digitally mature Asia-Pacific markets like Australia and Japan, it has quickly ramped up the programmatic space. 

An interesting point specifically for programmatic in India is its propensity towards guaranteed buys. According to the report, India is poised to be one of the top markets for programmatic guaranteed - with penetration projected to reach 17 per cent in 2020 based on a Boston Consulting Group study, on par with that of Australia or China. This may be due to prominent publishers who are driving uptake of programmatic buys and a concern with ad fraud, which drives spend from direct traditional buys to programmatic guaranteed, the report conjectures. 

Currently, marketers in India tend to approach programmatic as a direct response driver, accessing mostly remnant long-tail inventory. As marketers grow more savvy, they will understand its value for brand campaigns with the ability to purchase premium audiences and inventory. Likewise for publishers, while there has been encouraging movement by publishers to offer access to more of their inventory via programmatic (for example, TrueCaller with roadblock inventory and Saavn with audio inventory ), there are still legacy publishers who view programmatic primarily as a means to move cheap or unsold inventory. According to the report, the trend towards transacting more premium inventory via programmatic is expected to accelerate programmatic adoption within the market, with prominent advertisers such as Ford India transiting majority of direct deals to transact programmatically. 

The report also lists some challenges on the road to mainstream programmatic adoption, which include the prevalence of direct deals in the market and the perception of programmatic inventory as the channel reserved for transacting low-value inventory. There is also demand to harness richer data/ audience segments by publishers to bring more value for advertisers, something which is not yet the norm in the Indian market.