Mobile Advertising Picking Up Pace In India: InMobi CEO
Harvard Business School graduate Naveen Tewari has spearheaded InMobi into the second largest mobile advertising networks in the world, behind Google’s AdMob.
In just four years, the Bangalore-based InMobi (which began as mKhoj) has expanded its reach to 125 countries, delivering 32.9 billion advertisements to 212 million mobile users across the globe every month, even serving an ad to a mobile phone in Alaska. Backed by top venture capital firms Kleiner, Perkins, Caufield & Byers and Sherpalo Ventures, InMobi continues its global expansion and is poised to be a key global player when it comes to mobile advertising.
Tewari is considered to be one of the most influential personalities in the mobile advertising industry and he recently joined the board of the international standards body Mobile Marketing Association. Techcircle.in details his perception of the mobile advertising scenario in India, the challenges faced, the ROI on mobile advertisements and the opportunities going forth.
How is India faring as a mobile advertising market?
Mobile advertising, especially display advertising, is a new concept in India, but adoption has gone up considerably over the last one year. Currently, India is a $25 million market for mobile advertising. But the global mobile marketing industry is expected to grow to $60-$80 billion by 2014. At that stage, the number of mobile internet users is expected to be 4.5 billion globally with 250 million users in India.
In a recent survey conducted by us, we have witnessed that around 70 per cent of the respondents in India realise the value of mobile advertising. This shows that the consumers are ready and perceive the benefits it can bring. It’s time for advertisers to take up this opportunity.
Are Indian brands, mobile companies and app makers using ads effectively to increase their reach? What are the issues that hold them back?
A few brands were early adopters and their success stories, along with the fact that the world is taking more and more notice of mobile advertising, acted as the initial catalyst for this adoption. Now, it’s a matter of evangelising the medium and what it offers to ensure consistent growth.
The main reason for brands to hold back is the lack of awareness. The understanding about the medium is less and people tend to think that mobile advertising means SMS advertising.
One of the main barriers in India is the adoption of smartphones. Low-end feature phones do not give the superior user experience that smartphones can provide. But I believe that this is just a temporary phase and we have seen the adoption of Android phones increase quite rapidly in the recent past.
Can you share the top Indian brands which are using mobile as a medium to target the audience successfully?
In India, we have seen global brands launching India-specific campaigns in the recent past. There are many brands going mobile in the country, but a few that instantly come to the mind are (in no particular order) Reebok, Airtel, Yamaha, Samsung, ESPN and CricInfo.com.
How are you competing against digital advertising agencies which are now bullish on the mobile?
Ad networks and digital agencies aren’t competitors. We work with them. Agencies help brands across all mediums of advertising including traditional media such as TV and print, as well as digital, but a subject matter expert helps them deliver better ROI to their clients. That is where InMobi comes into the picture. We have a dedicated focus on mobile and understand how to ensure that campaigns deliver the best results. We also have local ground force that understands the nuances of each market and suggests how to achieve the bang for the buck. Hence, agencies tie up with us and together we ensure that the brands leverage the mobile space most effectively.
What is your take on online interactive ads? Do they erode the advantage of engagement that mobile ads enjoyed?
Not at all. Online or digital advertising has its own sets of benefits and capabilities. Interactive ads are definitely a capability in the digital advertising realm, but mobile supersedes all media when it comes to engaging ads.
No amount of interactivity on other mediums can compare to what the mobile can offer. For example, mobile basic interactivity such as Click to Call or Click to SMS cannot be replaced. You can have an ad where a click on the ad can connect you directly to the sales representative of the particular product, or can send an SMS requesting for the tariff plans of the product. There are more complex ways of engaging such as showing users maps of the retail stores, click to download favourite apps etc., which are also available mainly on mobile.
Interactive ads in the online medium definitely make digital advertising more effective, but it doesn’t affect the advantage of the mobile medium.
What is the ROI of mobile ads versus online ads?
Mobile advertising is 4.5-5 times better in delivering ROI than online advertising (from a recent study by a research firm Insight Express). Mobile campaigns continue to be a powerful ad channel for marketers, outperforming online advertising by roughly three times across a variety of metrics, including ad awareness, message association and purchase intent. The mobile is a very personal device. While people may share a computer at home, no one shares their mobile phones and it’s a reflection of the person’s individuality. Hence, users tend to click on targeted ads more on their phones.
But is there a resistance to mobile ads by users? How do you avoid saturating them?
Resistance to mobile ads by users is a big concern in SMS advertising but not in display advertising. If a user is browsing the mobile web or trying out an app, small ads are inserted at the top or bottom of the page. But this does not stop the user from the current activity and users can click on the ad only if it is appealing and has something of interest. Hence, it is not intrusive at all. It’s up to advertisers, along with ad networks, to ensure that users are shown the most relevant ads.
You talked about a segment of users who look at the mobile as a “snacking device” and have other ways to access the Internet at home or work, and the phone is a secondary means (at MobiAdNews). Can you elaborate on how you plan to target this segment?
In India, majority users use mobile phones as the only mode of connectivity. It is more in the urban areas that it is used in conjunction with other devices. But in terms of ads shown to them, I believe that the way to target should not depend on whether they use it for snacking or only as a screen. The targeting should be more in line with the sites they visit on the mobile, the cultural and socio-economic patterns of the users and so on.
How viral are mobile ads compared to online ads?
I would say it’s more about the campaign being viral, rather than the medium – be it mobile or online. When advertisers build campaigns, they should try and incorporate viral elements in the campaigns. For example, videos work very well as we saw with a Yamaha campaign where Yamaha posted videos of people reviewing the new bike. This had a very big viral effect. Simpler ways to make sure of being viral would be to provide ways for users to engage via Twitter and Facebook. These elements work very well on both mobile and digital.
A recent report from your company showed that WAP is better than apps for mobile advertising in India. In that context, how is in-application advertising faring for you and how much does it contribute to your revenues (percentage wise)?
The global revenue share from application advertising is around 30 per cent for InMobi. In India, this number is small as majority of the handsets are feature phones. But since smartphone sales have started increasing, we have seen a gradual rise in the app advertising segment in India.
Are you considering any acquisition?
I cannot comment at this stage.
What’s next for InMobi as a company?
We are improving our product and technology to provide advertisers with better options and also expanding our regional teams to provide on-ground insights.
Digital marketing is all about a strong platform and inefficiencies are best solved with good technology. If we can provide the right technology and tools for the mobile ecosystem to create higher monetisation, it will naturally lead to higher yields. To achieve this, we will simply have to put smart engineers to build the technology solutions.
The other factor is geography, since mobile advertising is a global business. Everyone today has a cell phone. That’s vastly different from the PC business which is concentrated in the developed markets. We will provide ways to take mobile advertising across the globe.
You had set up your developer fund in 2010. How is it doing now?
We had 200 developers signing up for our WDF (World Developer Fund) Programme and over 100 applications benefited. We served around one billion ads during the programme duration. In fact, it was so well received that we decided to continue the programme with better features.
What are the technological innovations taking place at InMobi?
We have partnered with Cooliris for the next generation of 3D ads to tablets and also recently announced the software development kit (SDK) for application advertisers, which is one of the best in the market in terms of future compatibility. We built it keeping in mind the features that can come up in the future and we have ensured that it can include the new features as well, without needing a change in the SDK.
When social media giant Facebook raised $100 million in venture debt in 2008 to build infrastructure, most tec