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Interview: Insights on how Mobile Advertising as an Industry is evolving

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With so much buzz & attention shifting towards mobile phones & tablets, the mobile advertising space is seeing a sharp upward trajectory. Here’s an interview of our Director – Global Sales & Strategy head Narayan Murthy with Exchange4Media on how mobile advertising as an industry is evolving. Below is the interview & here’s the link.

How is the mobile ecosystem in India growing?
The exponential rise in mobile internet penetration in the country over the last year has led to mobile advertising gaining immense traction. The mobile device has become a huge focus for brands to market their products and reach out to their preferred audience. The number of mobile internet users is expected to touch 185 million by June 2014 (IAMAI) paving the way for mobile to be a highly powerful mass medium.

Alongside the growth of mobile, the Indian mobile advertising market could reach $270 mn by 2016. Mobile advertising has shifted from “One for All’ ads to ‘Customized Ads to One’ through smarter technologies like Real Time Bidding, geo – targeting and native advertising. Ad formats have also evolved from the days of the banner ad to newer formats such as Search Intent, HTML5 Rich Media, Video, etc.

Mobile app developers also form the chief architects of the mobile advertising success story. Today, there are more than three lakh app developers in the country with about 100 million app downloads every month. In India, app downloads are expected to grow at a CAGR of 75-80 per cent till 2015 to about 9 billion app downloads. More and more mobile developers are adopting an ad-enabled free apps strategy to trigger app downloads. This in turn enables advertisers get access to premium inventory to display ads on rich media formats such as video, HTML5, etc. that mobile users find immersive and interactive.

Is app monetization challenging in a market like India? Why so? And what are the solutions
Firstly, the industry is challenged by inclusive monetisation models for developers. Most developers believe that their app monetization strategy is a ‘choice’ between Paid App or Free App supported by ads. However, both these models will continue to co-exist in emerging markets like India. Developers will have to act quickly to monetize the majority of their app user base by plugging into Telco billing for micro-transactions and using mobile advertising effectively. Second challenge for app developers is integration of multiple SDKs. A primary challenge is that the app development lifecycle is  time-consuming involving tasks such as integrating SDKs, changing app layouts, re-coding, re-testing compatibility that can prolong the app development cycle.

Developers should opt for time saving platforms such as AppWrapper.org designed to enable crucial app development lifecycle services and accelerate their time-to-market, with no coding effort. Thirdly, maximising user experience is a challenge in our market. Developers face the challenge of embedding mobile ads without compromising the efficiency and user experience of the app. Using a right mix of ad placement and formats is necessary to earn maximum revenues. Lastly, reaching out via global ad exchanges is a hurdle too. Developers can use ad exchange platforms that offer them greater choice and control as they have access to a larger inventory and are able to serve relevant ads to the audience.

What is your view on remarketing on mobile?
Mobile advertising has shifted to providing the audience with customized and personalised ads that are relevant to them, their activities and interests. Remarketing helps in enhancing this, as they have already shown interest in the product or service previously. It matches the right audience with the right message. Real time bidding platforms allow advertisers to serve relevant and useful ads to their audience in an instant with a high degree of precision, while offering the most value to publishers and developers.

What forms of advertising are popular on mobile?
Traditional practices such as repurposing traditional desktop ad units such as banner ads and moving them on a mobile medium won’t be considered the most effective way to reach mobile users. Simple text or image-based display ad formats (including banner, interstitial, list, and panels), have given way to more advanced formats like native ads, mobile video formats, rich media ads, etc. These advanced formats are possible due to advancements in technology as well as mobile data amongst other factors.

Rich media formats such as HTML5 infused with the plethora of touch devices are revolutionising the way mobile advertising is being practiced.  From just movement or multiple clicks, the brand engagement can come alive through numerous intuitive engagement methods such as touch, click, drag, scratch, pinch functionalities; enabling consumers experience a brand in a much more human and relevant way than ever before.

What are the challenges in the ecosystem as perceived by you?
Although mobile is currently one of the most promising digital mediums, it faces issues such as multiplicity in the device ecosystem with different sizes, different OS, capabilities etc. The other challenge is ignorance and misconceptions about the medium and its compatibilities. Advertising and digital agencies are still transitioning to the mobile ecosystem and they don’t have the requisite talent and scale to understand the mobile ecosystem to unlock its true value.

How many ads do you publish on a daily basis?
In the year 2013, we crossed the 2.4 billion daily ad request benchmark. We have more than 421 million unique users on 150,000 + apps and sites with an 82% increase in inventory growth.

Has mobile taken off quicker and bigger than what digital took to get noticed?
Even though mobile as a medium was hived off from digital and had initial resistance, it has seen rapid adoption especially in the last 3-4 years. The affordability of the medium has played a key role in its growth with cheaper and affordable smart phones penetrating the market.  Given the easy access to the medium, mobile has garnered a huge base of users to start with that pulls advertisers’ interest. Besides, the onset of the ‘touch’ interface in mobile devices has greatly altered the way ads are served to consumers, with effective advertisers incorporating the intuitive inputs and gestures of users. This had led to a reduction in small, text based ads, with personalised ad content taking prominence to adjust to the different screen sizes and mobile data advancements. Mobile as a medium can engage the user on voice, display, text, rich media and video with layers of targeting. Also, brands are realising that the mobile user is different and behaves differently from an online user so its uniqueness has been established in the minds of advertisers.

Some key trends that will drive the industry in the next 12-18 months.
Native advertising on mobile will undergo a lot of customization as marketers will closely emulate and leverage the characteristics of the mobile environment i.e. an app or a site wherein the content is featured. We will see native mobile ads being more mainstream as these ads, with the right content and context, will be designed to merge seamlessly with the app to not interrupt the user experience.

Brands will scout for advertising solutions to leverage Wearable Technology as a new consumer touch point. The advent of new technology like wearable computing devices such as Google Glass and smart watches, will spur marketing efforts as brands will try to keep up with engaging mobile users, with a cross-device consumer targeting strategy.

Mobile Real-Time Bidding (RTB) will foster enhanced audience targeting and personalised ads through third party audience data. Mobile being the most personal medium, gives advertisers the ability to target their ads with a much higher degree of accuracy.  With RTB, various targeting parameters about users can be utilized to serve relevant ads based on their advertiser ID. Ad impressions that are enriched by this third-party data through RTB, enable advertisers to bid intelligently on mobile inventory on an impression-by-impression basis, cost effectively and efficiently. Also, mobile display ad spends are set to grow seven times faster than online advertising models resulting in an overall increase of over 70% in mobile RTB spending. As advertisers, developers, publishers & telcos start collaborating to leverage the audience buying platform, mobile RTB will continue to revolutionize mobile advertising.

Physical context will turbo charge location based advertising. User information will define mobile advertising as their location and other physical context helps advertisers display the right ad to the right user at the right time. Marketers will use context to connect with consumers based on who they are, where they are and what they may actually want at that specific time and place. Physical behavioural context such as driving, walking etc. will help brands engage customers through personalised ads.

Appification of localised content will rise rapidly. There will be an increasing number of regional and localised content and apps being developed to cater to the huge untapped non-English natives and consumers who desire local data. This content could be in the form of a particular location or language. As content consumption on mobile devices outpaces other mediums, publishers who did not port their offline content to digital will leapfrog the online medium and their content will directly come to mobile to reach out to a larger audience. Publishers will follow the growing demand and developers will make apps which contain specialized information for a particular location.

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