According to the Telecom Regulatory Authority of India (TRAI) there are more than 850 million mobile phone subscribers in India. This is more than 70 per cent penetration rate for the country. The Internet and Mobile Association of India (IAMAI) reports that there are 46 million active mobile Internet users in India, a statistic that suggests that mobile Internet users will surpass desktop users in the coming quarters.

“How is mobile Internet linked to mobile advertising?”, you may ask. The short answer is “very intricately”.  When users consume content on the mobile Internet, either through mobile websites or mobile applications, they provide an opportunity for advertisers to reach out to their target audience.

What is mobile advertising

At a top level, mobile advertising could be

• Display advertising - Imagine you are surfing a news portal on your mobile phone. You will see ads displayed on the pages you surf. This is an example of display ad on mobile web. The other form of display advertising is in-app advertising. If you are a regular player a free version of Angry birds on your Android phone, you would see ads displayed on the top right corner, placed there by a mobile ad network such as InMobi.
• SMS or text-based advertising–Most mobile phone users in India have been exposed to SMS-based advertising. The recent TRAI regulations around SMS are likely to curtail this form of mobile advertising.
• Search advertising - Advertisers show ads when a consumer searches for something on the Internet.

This article talks primarily about display advertising.

How is mobile advertising better than other media

As a medium, mobile is fundamentally different and superior to other media on all counts that matter to advertisers - availability, targeting, engagement and measurement.

• Availability - The mobile is an extremely personal device that most of us tend to access every moment we are awake. This gives advertisers access to their target audience nearly 24x7.
• Targeting - Mobile offers targeting like no medium can. Advertisers can target their audience by mobile device, operator and operating system in addition to the usual targeting and segmentation variables that exist for other medium.
• Engagement - Today, mobiles have immense computing power, 4.3" screens, touchscreen capability and sensors such as accelerometers, gyros in addition to technologies such as GPS. All these elements allow for a creative ad formats and immersive engagement. For instance, a daily deal company can run a campaign where a shake of the mobile can refresh the deal on offer in that city. And unlike other media, friction between engagement and call to action is nearly non-existent for mobile, given it is a communication device at the core.
• Measurement - Mobile enables tracking and measurement at a far granular level compared to traditional medium. For example, advertisers can track the number of seconds a consumer spent viewing a video, or the percentage of consumers that chose a particularly product variant.

How big is mobile advertising in India

Indian mobile advertising is a Rs 26,000 crore market. Digital media accounts for nearly 5 to 6 per cent of it at Rs 1500 crore. The jury is still out in terms of the size of mobile advertising in India. One way to assess the market is to consider the ad impressions or the number of times an ad could potentially be served up. InMobi served nearly 11 billion ad impressions per month in India in Q3, 2011. To put this in perspective, InMobi served more than 54 billion ad impressions globally in the same period.

Who is advertising on mobile

We see three kinds of advertisers on the mobile platform.

1. Mobile First or businesses that are entirely mobile centric – primarily mobile app and gaming companies such as Rovio, the maker of Angry Birds.
2. Online First or businesses that are largely online and are looking at ways to acquire consumers through the mobile medium. E-commerce firms are a good example of this category.
3. Offline First or traditional businesses that are looking at ways to engage consumers in the mobile medium. These would include brands that have traditionally advertised on TV and in print such as automobile, mobile operators, cell phone manufactures, CE, Finance, Retail & FMCG companies.

The first movers in the mobile advertising space had been the Mobile First companies, but Online First and Offline First companies in India have now adopted the medium in a big way.

Where is mobile advertising headed in India

Mobile advertising has evolved significantly in terms of creatives. Today, rich media ads allow consumers to interact with the ad in a non-intrusive manner. For example, users could tap to watch a video, get a 360 degrees view of a product, locate a store, call a dealer and return gracefully to the content. Higher Internet speeds make the user experience better, but rich media technology has evolved to an extent where immersive user experience is possible with lower data speeds. Brands in India are using the capabilities of the mobile phone to deliver engaging experience to consumers.

According to a survey by On Device Research, 59 per cent of Internet users in India use primarily mobile to access Internet. For a large number of Indians, mobile is the first and only device for Internet connectivity. With 3G rollout gaining momentum and data plans becoming affordable, mobile advertising will be even bigger in the months to come.