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The past two months stand witness to a rush of start-ups in the digital and mobile marketing arena, whether we talk of What's Your Problem, a full service digital agency founded by ex-Grey national creative director Amit Akali, or former DDB Mudra hand Pratap Bose's 'digitally driven' conglomerate, The Social Street. Niche mobile marketing agencies are in vogue too - Mogae Media's venture, Mobocracy, and The Mob, founded by Chraneeta Mann and Nitin Suri (former NCDs at Rediffusion and Dentsu, respectively), being cases in point.
As eyeballs shift to the digital world, ad spends seem to be following suit, albeit at a slow pace. "The growth in advertising comes after a medium matures," says Rohit Dadwal, managing director, Mobile Marketing Association (MMA), Asia Pacific. "And this is just a seven-year old market." To its credit, the digital advertising industry grew from Rs 3,010 crore in 2013 to Rs 4,350 crore in 2014, a growth of around 45 per cent (source: FICCI-KPMG Indian Media and Entertainment Industry Report 2015). Mobile marketing currently forms around 15-20 per cent of that figure.
So what makes this industry exciting? There are more than 300 million internet users in India and around 173 million mobile internet users (as of end-2014). India is the fastest growing smartphones market. Different formats of real-time, engaging digital advertising and the constant evolution of measurement metrics are making the medium a hard one to miss for marketers.
So has digital marketing inched beyond being an afterthought in the media plan? What is its potential, going forward?
A change in conversation
Three years back, mobile marketing stood at Rs 180 crore, and it has increased three-fold now. MMA predicts it will grow 150 per cent in three years' time, while digital growth will be 50-60 per cent. "And we're mistaken if we think that rural India is far behind," says Chraneeta Mann, co-founder of The Mob. "Twenty-three per cent of rural India and 27 per cent of urban India use mobile internet. Those in the hinterland are as addicted to Facebook and WhatsApp as we are."
When the industry started out, the main obstacles included lack of awareness, metrics and content. Using learnings from traditional media to benchmark new media - and expecting it to work - was another fallacy for advertisers. Now let's put the changing landscape in perspective. Bandwidth is improving as 2G has given way to 3G and 4G. The consumer loves the world of the internet, watching videos and getting the best deals, but data charges and the newness of smartphones technology are barriers. But these are temporary. Approximately, 10 million new smartphone users are entering the market every month.
It is hard to ignore, though, that an average marketer's comfort zone is still traditional media. "Nobody seems to be making a return on investment (RoI) comparison between traditional and digital media," says Leena Sharma, COO, Mobocracy. "A brand manager may expect 10,000 clicks in one day to convert to 'x' number of sales but at the same time, be comfortable spending crores of rupees on TV and print and just track the increase in call volumes or brand recall scores." Where does this leave the digital marketing industry then?
The potential
Ads for the mobile and digital space are slowly being shot and edited differently. There are mobile apparel catalogues that are shot to be interactive in nature. "Today you can queue up for sales online, pay by tweets, grab stuff for free from billboards by Bluetooth and create bite-sized branded content for mobile," says Suri of The Mob.
Advertisers recognise that dual-screen viewing (stacking and meshing) has been on the rise for a few years, but India is yet to catch up. Real-time advertising can happen in many ways, including image recognition and real-time bidding. Image recognition involves getting input from the consumer - whether it's a code or an image - and informing him immediately where it is available and at what price. Real-time bidding is an automated way of buying and selling customised ads, and buying ad space individually and instantaneously. In the US, real-time bidding is estimated to be a $9 billion business by end-2015. In India, we're still getting started.
Or take formats like content marketing, where India is catching up with the West. Although expensive and not exactly RoI-driven, it can do wonders for brand recall. "Native advertising in its crudest form, the advertorial, is moulding itself in the realm of mobile advertising," says Mann. "As performance of banner ads worsens, it is content marketing and native ads that will expand the mobile advertising market."
Agencies like Mobocracy are forging partnerships with telcos, which allow them access to real-time contextual behaviour of consumers engaging with brands on the mobile. "Our content teams shoot, direct, edit and animate in-house, giving digital video content at competitive rates - 50-100 videos (a whole year's plan) can be produced and created at the price of one TVC," says Amit Akali, managing partner and creative head, What's Your Problem.
A deeper understanding
"Consumers are digital natives, but most companies are not," says Pratap Bose, and this reflects in the media plan. To up the understanding of digital marketing, start-ups claim to be creating ecosystems that are younger and more nimble than network agencies. The Social Street has a youth marketing team headed by a 25 year-old, which caters to 18-25 year-olds only.
"But clients are still stuck on either creating traditional handles on Twitter, or pages on Facebook. We are still in the 'like' stages," says Bose. "What do 20 million 'likes' mean to a brand, really?"
The time, therefore, is to conceive content as specific as WhatsApp films, or interactive Instagram films, or mobile-first entertainment. "Businesses like e-commerce require nimble agency structures that react faster," says Mann, "and that is where start-ups can add value."
Expert Take: Work in progress
Despite significant value and fast growth, digital advertising has a long way to go. Most of the spending comes from search; a majority of the investment is made by e-commerce companies, telecom and real estate brands. The display advertising business is almost a reflection of what the brand does offline, and social is a smaller part of this pie.
India is still a market where penetration is key and nothing delivers it like a sharply-targeted television campaign. The lack of measurement system for digital advertising is another factor for lower investments. Digital communication is about content, participation and dialogue. Mobile-based advertising is even more complex. For growth, it has to break the existing banner-SMS-app cycle. Mobile-based agencies are not really low-hanging fruits. The work coming out of these shops may transform the mobile space if they find ways to engage with mobile subscribers. My hunch is that the game-changers are coming, but not from these new agencies, but from some outlier start-ups.
Naresh Gupta
managing partner and chief strategy officer, Bang in the Middle
