Guest Column by Hemant Jain: Opportunity knocks in mobile internet

18 Nov,2013

By Hemant Jain

 

A Facebook status update recently by a college graduate student read: I may be able to live without Facebook, but not without WhatsApp. If status messages and typical buzzwords on various social media networks are a thing to go by, then we have the writing on the wall. Mobile internet in India has already shown signs that it is growing and is only going to get bigger and more powerful.

 

A look around any hangout space and it is evident that mobiles in India have fundamentally altered the lifestyle of today’s consumers across age groups. And it is no more the top executives who find it convenient to do business from their phones. The scope has widened. It is impacting the way we work, play, interact and live.

 

Even more recently, to tap the growing e-commerce market in India and increase its access to consumers, Coca-Cola floated an online store for home delivery of its products. Coca-Cola’s move is an industry and sector first in the fast moving consumer goods sector in the country to set up a standalone portal. This development coming from a giant like Coca-Cola sends very strong signal for marketers as well as agencies working in the digital – especially in the mobile advertising space.

 

As the smartphone usage in India rises, the internet consumption, as a direct corollary shows an upward movement. The smartphone consumption brings along with it the platform to introduce differentiated mobile media offerings that offers massive reach, unique ad placement, and impactful ad formats which augurs well for the mobile advertising industry.

 

India finds itself in a unique space as far as mobile internet opportunity is concerned, all the variables for a successful equation are in place for this to happen. Starting from the cost of network access and handsets is going down, wireless networks are going up, and Indian consumers already display an insatiable appetite for digital services.

 

Further, bypassing the personal computer experience and moving straight to widespread mobile access-simply makes sense for a large chunk of Indian users. It would sidestep a host of hurdles associated with delivering affordable internet services to a population that is geographically dispersed and relatively poor, in a country where infrastructure development has been an issue and reach of internet a topic thoroughly contested and debated across various forums.

 

The Indian mobile Internet consumer:

Numerically speaking:

With more than 900 million cellphone connections, India is the second largest mobile market in the world after China. A recent report by Boston Consulting Group stated that the total number of internet users in India is expected to increase from 125 million in 2011 to 330 million by 2016. The report noted that, at present, around 45% of online consumers in the nation use only the mobile to access the Internet. This is expected to increase to 60% over the next three years.

 

Even though typical Indian consumers have limited Internet access, they have a remarkable appetite for digital content. In fact, they consume an average of 4.5 hours of it daily across offline channels such as television, DVDs, and CDs. And what is really remarkable in this growth story is the fact that use of mobile to access internet has been on a constant rise in the country. A whole segment of business has grown around retailers essentially operating as physical iTunes stores, charging fees to load music and other content onto mobile devices. The net result is that while India is a relatively poor country, more than 70 percent of its urban consumers already spend about $1 a month on content and services through offline, unorganized retail channels-a market estimated to be worth more than $4 billion annually (according to various industry reports)

 

India has taken a giant leap when it comes to the issue of cost and ease of access to Internet services. The country has seen enough development in devices, networks, operating systems, and operator strategies. The average price of smartphones delivering much richer content, including video, has fallen rapidly over the past sometime. This price tag is significantly less than the cost of PCs.

 

It has also been observed that mobile devices are considered easier to operate than PCs, and the ability to access websites with a single touch or a voice command. Indian operators have also fuelled this upswing as theyare innovatively offering innovative rate plans for mobile data use, addressing criticisms of the prices of data plans and their perceived opaqueness. Operators have played it smart by offering a very low ticket invitation plan to let the consumer taste the ease of mobile advertising.

 

This is good news for advertising and marketing fraternity that we have a new medium that presents itself as a potent contender to expand and share the ad budget pie. Mobile advertising is becoming an essential component of the media mix with the digital advertising market in India was pegged at USD 300 million for FY 2011-12.

 

Current Trends in Indian Market

Without doubt, India is one of the most exciting markets for mobile adverting, and pushing it forward is the buoyant and increasing base of active mobile internet users. This base is growing and growing fast. According to various industry reports, the mobile userbase in India is all set to touch 200 million mark in a short time. But, the more interesting thing is that as much as 40 percent of these mobile internet users have a single access point, that is, their mobile screens. Since, the mobile penetration in the country still remains a bone of contention, apps are playing an important role in improving the numbers of these mobile internet users.

 

Developers will find out innovative ways to marry in-app purchases and smart advertising:

Internet access largely based on mobile apps presents a major window of opportunity for smart and non-intrusive monetisation. Developers will have to take urgent action to monetize their app user base by plugging into telecom-billing for transactions and to create better and stronger mobile advertising solutions. Companies need to up the game be it is though better editing, visual merchandising or marketing.

 

India being a nation of multiplicity, regional content will do a lot of good for the future of mobile internet. It should be presented in new ways: voice and single-touch mobile-Internet access are essential. Language content will be particularly instrumental in overcoming illiteracy and a lack of familiarity with the Internet.

 

Mapping consumer’s mobile lifestyle and targeting a better reach

Mobile internet usage will throw up a mine of data that will allow the advertisers and marketers to become even more aware about the personality and choices of these mobile netizens and offer them better apps and bundled advertising and monetisation opportunities.

 

This would also allow the producers of good and services to leverage the power of m-coupons merged with hyper categorised offers backed by solid data. This will allow the bringing together of advertising, monetary transaction and distribution platforms on a single hand held device.

 

A more edgy and smarter brand planning

Coming of the mobile platform into being will eventually force brand custodians to offer more engaging and custom made campaigns on mobile. The message will have to blend seamlessly with that on other media while still maintaining its ability to remain sleek. Agencies can adopt new approaches to developing concepts, pricing, and measurements of effectiveness specific to the medium

 

Slicing the mobile ad pie finely:

Coupled with more edgier brand planning and a robust measurement system, the mobile ad pie may be divided more smartly based on language preferences, region – mobile advertising has the opportunity to move beyond just subscription and service based model to a more localised and customised ad selling platform.

 

Minting the mobile money

Regulators and service providers will have to find out more acceptable and safer ways for people to carry out monetary transactions on their mobile phones. Things like shopping coupons coupled with apps may be able to deliver the next level of experience and comfort for the shopper on mobile. We can already see that a lot of smart e-commerce players have already redesigned their portals in a mobile friendly way.

 

The concept of m-wallets really need to take up and offers a lot of space to manoeuvre for both the customer and the seller.

 

Challenges:

It is time advertisers moved invested in the medium

While the hope of a mobile boom is still high, advertisers are still experimenting with the media and this devote a miniscule budget. The revenue from mobile advertising is not keeping pace with the mobile penetration levels in the country and that leads to a crippling effect on the initiatives and innovations that are required for the medium to grow bigger and better. Various industry estimates place the share of mobile advertising at a tenth of the overall digital advertising spend of $400 million (about Rs 2,180 crore ). For the dominant players this is a cause of worry.

 

Where is the measurement:

Since, the ad share is low, innovation and dedication of all the stakeholders is also low at present. Advertisers right now cannot figure out how effective a mobile internet campaign is.” Most of the top advertisers in the country devote nearly only 5% of their entire ad budgets for mobile ads.

 

The pain of absence of any robust measurement in the mobile advertising space is further causing these low budget for the medium. These low budgets stem also from low conversion rates for mobile ads where the percentage of users who go beyond just clicking on an advertisement to completing a transaction is not growing.

 

New medium demands newer ad formats:

To make both the customers and brand custodians hooked to the mobile advertising, it is high time that agencies really rake their brains and offer better ad formats that are non-intrusive while being effective at the same time. The newer formats have to be in sync with the mobile browsing experience.

 

Educate the customer:

Another major issue is the need to continuously engage and educate the customer about the various possibilities that mobile internet can offer as India has a huge potential in terms of a growing customer experience. E-commerce is expected to be a major driver to further provide pace to Indian mobile internet story. Therefore, the need is to build customer trust. Indian consumers still need a lot of weaning away from cash transactions and need to learn to rely on the reliability of online payment options.

 

That is the only way how the huge potential residing in the India’s hinterland can meaningfully contribute to the growth of India mobile internet story.

 

Infrastructure still a challenge:

Lack of infrastructure has often been touted as one of the major roadblocks in uptake of digital medium in the country and this issue still has been the case running it for digital advertising and advertising on mobile. Though mobile operators have a far better reach compared to the pure play broadband penetration. However, low uptake of 3G hasn’t helped the cause of digital advertising and impedes the growth of mobile advertising in India.

 

Conclusion:

With the introduction of low price and durable smartphones in the Indian market, internet access has got a higher penetration and a new meaning especially to the youth of the country. Still, a lot of ground needs to be covered by all the interested parties – the government, the developers, the agencies and the manufacturers of products and services have to constructively work on this opportunity that promises a lot.

 

Hemant Jain is Senior Vice President and Head, Domestic Business at Hungama

 

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