India has shown impressive ad request growth year over year, which is characteristic of an emerging mobile market.
By Sonam Saini
Smaato, the global real-time advertising platform, hopes to leverage the burgeoning mobile market in India as that would entail increased digital spending. Freddy Friedman talks to Sonam Saini about India catching up with global advertising trends, the potential of in-app advertising, the efficacy of location-based targeting, and more.
The number of mobile ad requests on the Smaato platform increased by 27% between H2 2017 and H2 2018, with India recording the highest growth rate. What led to this?
India has shown impressive ad request growth year over year, which is characteristic of an emerging mobile market. It is expected that by 2022, there will be 829 million smartphone users in India, accounting for 60% of the population. Another reason for such a trajectory is the fact that many of the popular apps nowadays are homegrown in the APAC region and are tailored to the local audience, which also drives mobile ad request growth. And, of course, with the growing awareness more advertisers are increasing their budgets for in-app advertising.
India is catching up with global advertising trends at a fast pace. Based on present industry predictions, mobile will overtake ad spending on the desktop by the end of 2019 in India. Looking back at last year, 52.7% of total digital ad spending in India went to mobile, according to eMarketer.
Retail advertisers accounted for nearly half of the total mobile ad spending worldwide on the Smaato platform in H2 2018. Is the same true for India too? This year has been a big one so far for Indian advertisers, especially with the general elections and the ICC World Cup. The industry is expecting a 37% rise in incremental ad spending by the end of the year on digital advertising, which, of course, includes a large percentage of mobile spending. In terms of categories, FMCG, automotive, retail, e-commerce, tech, and telecom are expected to contribute to two-thirds of ad expenditure in India in 2019.
Why is there a lack of demand for rewarded videos, even though they cost up to 86% lesser than other video ads and have similar conversion rates?
Ad spending on rewarded videos was up 139% in H2 2018 on the Smaato platform — more than any other video ad format. Advertisers are still finding their way around this format; other apps, particularly games, are the biggest spenders when it comes to rewarded videos. However, other advertising verticals are also realising its benefits because of high viewability rates and users’ affinity for its opt-in nature. Apart from the gaming industry, retail and media brands are using this format, and make up one-fourth of rewarded spending on our platform.
What is the scope for innovation when it comes to advertising on social media? Is native advertising the best way?
We have witnessed a significant change in Facebook’s algorithm that emphasises meaningful interactions and forces advertisers to come up with more engaging and appealing content. Moving away from engagement-baiting techniques and shifting towards genuine content is where I see the future of social media advertising. I believe advertisers have already embraced this need for transformation, and grasped their chance in native advertising as the next best thing.
Is there a direct correlation between location-based data and sales for advertisers?
Location-based targeting has been one of the thriving trends in the industry due to its increased accuracy in reaching the right audience at the right spot. But now more than ever, advertisers are giving it the attention it deserves. By knowing where a user is and where they might go, advertisers can learn about their real habits and actual preferences. On the Smaato platform, apps that pass location data have 70% higher eCPMs and 50% higher fill rates than the overall average.
Is the stronghold of the walled gardens (Google and Facebook) stagnating? Do independent publishers stand a chance?
Yes, they do. With GDPR and other upcoming privacy laws, the walled gardens are definitely under more scrutiny. But how all this shapes up in the coming years is anyone’s guess. Either way, independent players will always have a significant portion of the global digital ad spend, which is currently expected to be $333 billion.