Market Research Report : Mobile Advertising Market in India 2013

Mobile Advertising Market IndiaMobile Advertising Market – India

March 2013

Executive Summary

MarketOverview

Mobile ad market in India was valued at INR x bn as on Sep 2012 India’s share in global mobile Ad servings as on Nov 2012 was Y% Consumers in India are demanding highly relevant, personalized, content‐rich products and services on mobile

Drivers:

Drivers &

services on mobile

Challenges:

Affordability of Next Generation Mobile Networks

Colossal Wireless Subscriber BaseBurgeoning Penetration of Mobile DevicesDrivers &

Challenges Low Smartphone & Tablet Penetration in Rural Areas

Burgeoning Penetration of Mobile DevicesRising Usage of Mobile VAS, Applications & Online ContentsHigh AffordabilityNext Generation Mobile Networks

Market Trends

Trend1

Trend2

Trend3

Next Generation Mobile Networks

Competitive L d

Trend4

Competitive Landscape

AdMob Google AdIQuity Technologies InMobi

2MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

LandscapeInterworld Digital Komli Media Pvt. Ltd. Vserv Digital Services Pvt. Ltd.

•Macroeconomic Indicators

•Introduction•Introduction

•Mobile Advertising Overview

•Drivers and Challengesg

•Market Trends

•Market Opportunities

•Competitive Landscape

•Case StudiesM bil Ad E lMobile Ad Examples

•Strategic Recommendations

•Appendix


pp

Economic Indicators (‐/‐)

INR tn

14

GDP at Factor Cost: Quarterly

13

12

11

10

Q4Q3Q2Q1

Inflation Rate: Monthlyy

%


SAMPLEIntroduction SAMPLE Mobile Advertising (Ad) Overview

•Mobile advertising is the act of using mobile devices such as cellular phones & Tablet PCs as a medium to deliver promotional messagespromotional messages Mobile advertising is a subset of mobile marketing but it is often used interchangeably

•With rising competition and growing need for customer acquisition, newer mediums & methods of advertising and promotion are becoming very crucialpromotion are becoming very crucial The overall aim is to reach the target consumer with the effectual product promotion in terms of interests, demographical characteristics & relevant geological location

•With exponentially growing number of active mobile devices and usage trends of mobile services & Value Added

Mobile Marketing Activities

•With exponentially growing number of active mobile devices and usage trends of mobile services & Value Added Services (VAS), India is rapidly becoming one of the most attractive market for mobile marketers & advertisers

Mobile Marketing Activities

A ti it 1 A ti it 2 A ti it 3 A ti it 4 A ti it 5 A ti it 6


Activity1 Activity2 Activity3 Activity4 Activity5 Activity6

Rapidly increasing mobile device usage has led to immense opportunity for mobile advertising globally

Market Overview – Global

•Burgeoning numbers of a1 and a2 worldwide has opened newer avenues for mobile advertising

Gl b ll t 1 d t 2 l di i t f bil d dit f ll d b t 3 d t 4•Globally, country1 and country2 are leading in terms of mobile ad expenditure followed by country3 and country4 with considerably higher mobile spending compared to other countries

•While mobile ad market in country5 is saturated and expected to have slow growth in the coming years, market in country6 is expected to have healthy growth rate

• Despite of x1% growth y‐o‐y between 20‐‐ and 20‐‐, mobile ad market in country7 is expected to acquire a CAGR of x2% from 20‐‐to 20‐‐, whereas during the same period country8 is expected to attain a CAGR of close to x3%

Mobile Advertising Spending ‐ Global

Region CAGR

Global Ad Spending Growth (20‐‐ ‐ 20‐‐)

North and Latin America y1%

Europe y2%

Middle East & Africa y3%


Asia Pacific y4%

Global Mobile Ad Spending (2012)

Mobile Advertising Spending – Global

SAMPLESAMPLE • Spending on mobile ads via X was significantly higher than that on mobile ads via Z, owing to large number of A coming from mobile devices including smartphone and tablets

• While cumulative spending in X segment is dominated by Y due to high number of mobile‐internet users as compared to Z users, T segment is dominated by K distinctively

Display MessagingSearch

segment is dominated by K distinctively

7MOBILE ADVERTISING MARKET - INDIA 2013.PPT

SAMPLEAdvertising in India – Market Scenario (20‐‐)SAMPLE Total a1 market size in India as on month1 20‐‐ was estimated at INR

a2 market accounted for of the overall Ad market in 20‐‐

a3 market size in India as on month2 20‐‐ was estimated at INR

a4 market accounts for of the overall a5 market

Mobile ad market in India as on month3 20 was estimated at INR

Primarily, the market saw the uptake of ‘Mobile Browser Based’ and ‘In‐app’ Advertisements, followed by ‘SMS Based’ Advertisements

Mobile ad market in India as on month3 20‐‐ was estimated at INR

• Consumers in India are looking at X beyond standard Y• There has been a rapid demand for Z on mobile devices• Consumers are demanding highly relevant, personalized, XXXY f t t i f t i t d th t

Trends Influencing Mobile Ad Market in India


• Y of content is fast emerging trend across the country• Mobile X is much higher than Y• X contents on mobile platforms have higher A on consumers in India, in contrast to Z

Mobile Ad Market in India

Mobile Ad Market India – Ad SpendingINR bn

X%

20‐‐20‐‐20‐‐20‐‐20‐‐20‐‐

*Note: Data taken as on Sep 2012

Mobile Ad Type Revenue Split ‐ 2012Mobile Ad Type Share Split ‐ 2012

INR bn20‐‐ XA Y

SAMPLE9MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Note: Mobile browser ads and In‐app ads include display ads as well as search ads

SAMPLE

SWOT Analysis of Mobile Ad Market in India

Strengths Weaknesses

•Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text




SWOTAnalysis

Opportunities Threats






Drivers & Challenges

Drivers

C l l Wi l S b ib BColossal Wireless Subscriber Base

Burgeoning Penetration of Mobile Devices

Rising Usage of Mobile VAS

Challenges

Affordability of Next Generation Mobile Networks

L S h d T blRising Usage of Mobile VAS, Applications & Online Contents

High Affordability

Low Smartphone and Tablet Penetration in Rural Areas

Next Generation Mobile Networks


SAMPLEMarket Trends (‐/‐)SAMPLE Trend1

• Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text

Recent Development1

Trend2


Recent Development2



SAMPLEMarket Opportunity – By Verticals (‐/‐)SAMPLE • Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text



Vertical1


Vertical2


SAMPLEPorter’s Five Forces AnalysisSAMPLE Threat of New Entrants

Impact

Impact

Impact

Impact

Competitive Rivalry Bargaining Power of BuyersBargaining Power of Suppliers

ImpactThreat of Substitutes

Impact


Competitive Benchmarking (1/4)

Public Trading Comparables (FY 20‐‐)

Company1 Company2 Company3

Market Capitalization (INR mn) X1 Y1 Z1

SShare Price (INR) X2 Y2 Z2

SAMPLE EV/EBITDA (x) X3 Y3 Z3

/EV/Revenue (x) X4 Y4 Z4

PE Ratio X5 Y5 Z5


Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization and product segments, Share Price and PE ratio is as of ‐‐/‐‐/20‐‐

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT


Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3)

%

•Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text


16MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPTMOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT



Return on Capital EmployedReturn on Equity Current Ratio

%

p p yq y






Asset Turnover Ratio




Major Public Companies – Summary

Profit/Loss (INR mn)

Size of the Bubble represents Market Capitalization in INR mn

Total Income(INR mn)


The list is not exhaustive

company1 company2 company3 company4

SAMPLE Public: Domestic Company – company1 (1/4)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Products and Services

p

Ticker Symbol

Stock Exchange Head OfficeMumbai

Key People


Category Products/Services

N D i ti

Service

Name Designation


Note: The list of products and services is not exhaustive


i i l S h K iFinancial Snapshot Key Ratios

Net Profit/LossTotal IncomeRevenueINR mn

ProfitINR mn

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin ‐2.99 35.05% 38.03% 47.29% 49.95%

201020092008

3286.1

2011

Net Margin ‐3.81 30.66% 34.47% 39.25% 45.23%

Profit Before Tax Margin ‐2.07 31.01% 33.08% 38.38% 49.98%

Return on Equity ‐0.50 23.82% 24.33% 38.05% 31.21%

Return on Capital Employed 1.34 17.73% 16.39% 23.84% 16.70%

Return on Working Capital 0.41 18.62% 18.21% 24.31% 19.18%

Return on Assets ‐0.53 12.87% 13.40% 18.29% 14.25%

Financial Summary

• The company incurred a net profit of INR 2,737.19 mn in FY 2011, as compared to net profit of INR 2,237.01 mn in FY 2010

• The company reported total income of INR 8,927.40 mn in FY 2011, registering an increes of 37 55 per cent over FY 2010

Return on Fixed Assets 156.69 296.80% 140.10% 232.55% 173.54%

Cost RatiosOperating costs (% of Sales) 7.62 17.84% 10.22% 16.89% 16.51%

Administration costs (% of Sales)

‐1.24 11.68% 12.93% 8.55% 5.13%

Interest costs (% of Sales) ‐1.67 4.27% 5.93% 6.09% 2.32%registering an increes of 37.55 per cent over FY 2010

• The company earned an operating margin of 35.05 per cent in FY 2011, a decrease of 2.99 percentage points over FY 2010

• The company reported debt to equity ratio of 0.85 in FY 2011, a decrease of 4.39 per cent over FY 2010

Interest costs (% of Sales) 1.67 4.27% 5.93% 6.09% 2.32%

Liquidity RatiosCurrent Ratio ‐40.67% 5.05 8.52 10.97 13.98

Cash Ratio 1.02% 3.54 3.51 5.06 11.04

Leverage RatiosDebt to Equity Ratio 4.39% 0.85 0.82 1.08 1.19

b lKey Financial Performance Indicators

Indicators Value (dd/mm/2013)Market Capitalization (INR bn) 2177.4Total Enterprise Value (INR bn) 1870.1EPS (INR)

Debt to Capital Ratio ‐10.53% 0.35 0.39 0.48 0.52

Interest Coverage Ratio 28.66% 8.40 6.53 8.02 22.36

Efficiency RatiosFixed Asset Turnover 137.15% 9.47 3.99 5.74 3.69

Asset Turnover 7.52% 0.41 0.38 0.45 0.30

Current Asset Turnover 4.02% 0.48 0.46 0.55 0.38


EPS (INR) 16.82PE Ratio (Absolute) 1.33

Improved Decline

Working Capital Turnover 14.45% 0.59 0.52 0.60 0.41

Capital Employed Turnover 9.64% 0.76 0.69 0.94 0.66


Key Business Segments Key Geographic Segments

2% 3%2%%

xyzabcabc

Company filed revenue 2% 3%2%4%

100%

Company filed revenue under single business

segment

Key Information

2008 2011201020092011

Description Details

Overview

Extended Product Portfolio


Public: Domestic Company – company1 – SWOT Analysis (4/4)

•Strong market presence in India

W ll i t t d b i ti

• Profitability risk associated with declining ARPU in India

•A number of profitability ratios in

S W

•Well integrated business operations

• Strong strategic partnerships with other companies and vendors

•A number of profitability ratios, in the likes of operating margin and net margin, have been steadily decreasing over the 4 years period from 2008 to 2011S W

TO

o 008 o 0

TO•Cut‐throat competition in the telecom sector

• Introduction of advance mobile network technologies such as 3G and 4G

•DTH market in the country

SAMPLE•Telecom regulations

y

•Positive outlook for Indian telecom market


SAMPLE

SAMPLE Private: Domestic Company – company2 (1/5)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website Noida


Year of Incorporation

Head Office

Key People


N D i ti

Category Products/Services

Name DesignationService


Private: Domestic Company – company2 – Shareholding Pattern (2/5)Shareholders of the Company Ownership Structure

Name No. of Shares held Corporate Bodies Directors Or relatives Of Directors

Sunil Kant Munjal 1000

Hero Corporate Service Limited 6,948,950 0%

Anupam Bhasin 10

Shefali Munjal 10

Rohit Chanana 10Rohit Chanana 10

Rajeev Tandon 10

Sanjay Gupta 10100%

Puja Investments Private Limited

268,876

100%

25

Total 7,218,876

Note: Shareholding pattern as on AGM dated 29th Sep 2012

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

SAMPLE i i l S h K i

Private: Domestic Company – company2 (3/5)

Financial Snapshot Key Ratios

Particulars y‐o‐y change (2010‐09)

2010 2009 2008 2007

Profitability RatiosOperating Margin ‐4.41 36.02% 40.43% 13.07% 42.09%

Profit / Loss

Revenue ProfitINR mn

RevenueINR mn

Net Margin ‐2.53 8.53% 11.06% ‐12.88% ‐8.32%

Profit Before Tax Margin ‐9.15 10.22% 19.37% ‐19.05% ‐6.58%

Return on Equity ‐5.45 10.56% 16.00% ‐12.64% ‐12.11%

Return on Capital Employed ‐22.22 60.59% 82.82% 17.97% 55.89%

Return on Working Capital ‐2.71 26.40% 29.11% ‐47.59% ‐31.94%

Return on Assets ‐5.70 10.24% 15.94% ‐12.63% ‐8.36%

Financial Summary

Return on Fixed Assets ‐40.98 60.09% 101.07% ‐83.15% ‐45.35%

Cost RatiosOperating costs (% of Sales) 5.66 62.71% 57.05% 86.70% 57.88%

Administration costs (% of Sales)

6.96 28.30% 21.34% 31.10% 12.63%

Interest costs (% of Sales) 0 00 0 11% 0 11% 0 82% 1 94%

2010200920082007

• The company incurred a net profit of INR 49,770.5 mn in FY 2010, as compared to net profit of INR 75,668.5 mn in FY 2009

• The company reported total income of INR 583,550.5 mn

Interest costs (% of Sales) 0.00 0.11% 0.11% 0.82% 1.94%

Liquidity RatiosCurrent Ratio ‐17.28% 2.36 2.85 1.92 2.08

Cash Ratio 50.15% 1.56 1.04 0.64 0.18

Leverage RatiosDebt to Equity Ratio N.A. 0.01 N.A. N.A. 0.43p y p ,

in FY 2010, registering a decrease of 14.7 per cent over FY 2009

• The company earned an operating margin of 36.02 per cent in FY 2010, a decrease of 4.41 percentage points

Debt to Capital Ratio 149.73% 0.01 N.A. N.A. 0.30

Interest Coverage Ratio ‐12.44% 333.61 381.02 16.20 21.72

Efficiency RatiosFixed Asset Turnover ‐20.90% 6.81 8.60 6.34 5.45

Asset Turnover ‐14.51% 1.16 1.36 0.96 1.00

Current Asset Turnover 7.02% 1.72 1.61 1.74 1.99


over FY 2009Current Asset Turnover 7.02% 1.72 1.61 1.74 1.99

Working Capital Turnover 20.66% 2.99 2.48 3.63 3.84

Capital Employed Turnover ‐12.24% 1.20 1.36 0.96 1.45

Improved Decline

SAMPLE Private: Domestic Company – company2 (4/5)

Key Information

Description Details

Overview

Extended Product Portfolio


Public: Domestic Company – company2 – SWOT Analysis (5/5)

•Strong market presence in India

W ll i t t d b i ti

• Profitability risk associated with declining ARPU in India

•A number of profitability ratios in

S W

•Well integrated business operations

• Strong strategic partnerships with other companies and vendors

•A number of profitability ratios, in the likes of operating margin and net margin, have been steadily decreasing over the 4 years period from 2008 to 2011S W

TO

o 008 o 0

TO•Cut‐throat competition in the telecom sector

• Introduction of advance mobile network technologies such as 3G and 4G

•DTH market in the country

SAMPLE•Telecom regulations

y

•Positive outlook for Indian telecom market


SAMPLE

Case Study 1

Client Organization Advertising Platform

a1 a3

Industry

Financial Services

Case: X via Vodafone live

Mobile Ad ApplicationObjective Outcome

• Create awareness• Total 75,410 hits

Create awareness• Leading generation• Conversion of leads to Virgin Money home loan

• Create awareness

• 793 leads acquired• Hit‐to‐lead conversion ratio 1%

• 12 signed upL d t i ti 1 5%

•Mobile media•Mobile marketing website• 3x Short Codes

• Leading generation• Conversion of leads to

Virgin Money home loan

• Lead‐to‐signup ratio 1.5%

Measurement Technology Used


Weekly click‐through rate, weekly tracking & reporting and mobi‐site hits & uptake

Mobile Ad 2 – PepsiCo India

SAMPLESAMPLE

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SAMPLEStrategic Recommendations (‐/‐)SAMPLE •Text Text Text Text Text Text Text Text Text Text Text Text Text Text Text

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Recommendation1 Recommendation2

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