Market Research Report : Mobile Advertising Market in India 2013 by Netscribes, Inc.

Mobile Advertising Market India Mobile Advertising Market – March 2013

Executive Summary Market Overview

Drivers & Drivers & Challenges

Market Trends

 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 services on mobile Drivers:

Challenges:

 Colossal Wireless Subscriber Base  Burgeoning Penetration of Mobile Devices Burgeoning Penetration of Mobile Devices  Rising Usage of Mobile VAS, Applications & Online Contents  High Affordability  Next Generation Mobile Networks Next Generation Mobile Networks

 Affordability of Next Generation Mobile Networks  Low Smartphone & Tablet Penetration in Rural Areas

 Trend1  Trend2  Trend3  Trend4 Competitive Landscape

Competitive L d Landscape

AdMob Google

AdIQuity Technologies

InMobi

Interworld Digital

Komli Media Pvt. Ltd.

Vserv Digital Services Pvt. Ltd.

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

•Macroeconomic Indicators •Introduction •Mobile Advertising Overview •Drivers and Challenges g •Market Trends •Market Opportunities •Competitive Landscape •Case Studies M bil Ad E Mobile Ad Examples l

•Strategic Recommendations •Appendix pp MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Economic Indicators (‐/‐) GDP at Factor Cost: Quarterly INR tn 14 13 12 11 10 Q1

Inflation Rate: Monthlyy %

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Introduction

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 messages promotional 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 crucial promotion 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 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 Mobile Marketing Activities

A ti it 1 Activity1

A ti it 2 Activity2

A ti it 3 Activity3

A ti it 4 Activity4

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

A ti it 5 Activity5

A ti it 6 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 • Globally, country1 and country2 are leading in terms of mobile ad expenditure followed by country3 and country4 Gl b ll t 1 d t 2 l di i t f bil d dit f ll db t 3 d t 4 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 Global Ad Spending Growth (20‐‐ ‐ 20‐‐) Region

CAGR

North and Latin America

y1%

Europe

y2%

Middle East & Africa

y3%

Asia Pacific

y4%

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Global Mobile Ad Spending (2012) Mobile Advertising Spending – Global

SAMPLE • 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 segment is dominated by K distinctively

Display

MOBILE ADVERTISING MARKET - INDIA 2013.PPT

Messaging

Advertising 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 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

Trends Influencing Mobile Ad Market in India • 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, XXX • Y of content is fast emerging trend across the country Y f t ti f t i t d th t • Mobile X is much higher than Y • X contents on mobile platforms have higher A on consumers in India, in contrast to Z MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Mobile Ad Market in India Mobile Ad Market India – Ad Spending INR bn

20‐‐

20‐‐ *Note: Data taken as on Sep 2012

Mobile Ad Type Share Split ‐ 2012

Mobile Ad Type Revenue Split ‐ 2012 INR bn 20‐‐

SAMPLE Note: Mobile browser ads and In‐app ads include display ads as well as search ads MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

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

SWOT Analysis

Opportunities

Threats

• 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 Text

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Drivers & Challenges

Drivers C l Colossal Wireless Subscriber Base l Wi l S b ib B

Challenges

Burgeoning Penetration of Mobile Devices

Affordability of Next Generation Mobile Networks

Rising Usage of Mobile VAS, Rising Usage of Mobile VAS Applications & Online Contents

LLow Smartphone and Tablet S h d T bl Penetration in Rural Areas

High Affordability Next Generation Mobile Networks

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Market Trends (‐/‐)

SAMPLE Trend1

Recent Development1

• 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

Trend2

Recent Development2

• 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

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Market 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

• 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 • 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

Vertical2

• 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

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Porter’s Five Forces Analysis

SAMPLE Threat of New Entrants

Impact

Impact Impact Bargaining Power of Suppliers

Competitive Rivalry

Bargaining Power of Buyers

Impact Threat of Substitutes

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Competitive Benchmarking (1/4) Public Trading Comparables (FY 20‐‐) Company1

Company2

Company3

Market Capitalization (INR mn)

Share Price (INR)

EV/EBITDA (x)

S SAMPLE X3

EV/Revenue (x) /

PE Ratio

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

Competitive Benchmarking (2/4) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (1/3) %

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Competitive Benchmarking (3/4) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (2/3)

Return on Equity q y

Return on Capital Employed p p y

Current Ratio

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Competitive Benchmarking (4/4) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (3/3) Asset Turnover Ratio

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Major Public Companies – Summary Profit/Loss (INR mn)

Size of the Bubble represents Market Capitalization in INR mn

Total Income (INR mn)

company1

company2

company3

company4 The list is not exhaustive

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

SAMPLE

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

Offices and Centres – India

Corporate Address Tel No. Fax No. Website Year of Incorporation p Ticker Symbol Stock Exchange

Mumbai

Head Office

Products and Services Products and Services Category

Products/Services

Key People N Name

D i ti Designation

Service

Note: The list of products and services is not exhaustive MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

SAMPLE

Public: Domestic Company – company1 (2/4) Financial Snapshot i i lS h Revenue INR mn

Total Income

K Key Ratios i

Net Profit/Loss

Profit INR mn

3286.1

2008

2009

2010

2011

Financial Summary

• 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 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

Key Financial Performance Indicators Market Capitalization (INR bn) Total Enterprise Value (INR bn) EPS (INR) EPS (INR) PE Ratio (Absolute)

y‐o‐y change (2011‐10)

2011

2010

2009

‐2.99

35.05%

38.03%

47.29% 49.95%

‐3.81

30.66%

34.47%

39.25% 45.23%

‐2.07

31.01%

33.08%

38.38% 49.98%

‐0.50

23.82%

24.33%

38.05% 31.21%

1.34

17.73%

16.39%

23.84% 16.70%

0.41

18.62%

18.21%

24.31% 19.18%

‐0.53

12.87%

13.40%

18.29% 14.25%

156.69

296.80%

140.10% 232.55% 173.54%

7.62

17.84%

10.22%

16.89% 16.51%

‐1.24

11.68%

12.93%

8.55%

5.13%

‐1.67 1.67

4.27%

5.93%

6.09%

2.32%

2008

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

Cost Ratios

• 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

Indicators

Particulars

Value (dd/mm/2013) 2177.4 1870.1 16.82 1.33

Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Interest costs (% of Sales)

Liquidity Ratios Current Ratio Cash Ratio

‐40.67%

5.05

8.52

10.97

13.98

1.02%

3.54

3.51

5.06

11.04

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio b l Interest Coverage Ratio

4.39%

0.85

0.82

1.08

1.19

‐10.53%

0.35

0.39

0.48

0.52

28.66%

8.40

6.53

8.02

22.36

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

137.15%

9.47

3.99

5.74

3.69

7.52%

0.41

0.38

0.45

0.30 0.38

4.02%

0.48

0.46

0.55

14.45%

0.59

0.52

0.60

0.41

9.64%

0.76

0.69

0.94

0.66

Improved

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Decline

SAMPLE

Public: Domestic Company – company1 (3/4) Key Business Segments

Key Geographic Segments

abc

abc Company filed revenue Company filed revenue under single business segment

xyz

4% %

2008

2009

2010

2011

100%

2011

Key Information Description

Details

Overview

Extended Product Portfolio

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Public: Domestic Company – company1 – SWOT Analysis (4/4) • Profitability risk associated with declining ARPU in India

• Strong market presence in India • Well integrated business operations W ll i t t db i ti • Strong strategic partnerships with other companies and vendors

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

• A number of profitability ratios, in A number of profitability ratios in the likes of operating margin and net margin, have been steadily decreasing over the 4 years period o 008 o 0 from 2008 to 2011

• Cut‐throat competition in the telecom sector

• DTH market in the countryy

• Telecom regulations

• Positive outlook for Indian telecom market

SAMPLE MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

SAMPLE

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

Offices and Centres – India

Corporate Address Tel No. Fax No. Noida

Website Year of Incorporation

Head Office

Products and Services Products and Services Category

Products/Services

Key People N Name

D i ti Designation

Service

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Private: Domestic Company – company2 – Shareholding Pattern (2/5) Shareholders of the Company Name Sunil Kant Munjal Hero Corporate Service Limited

Ownership Structure No. of Shares held

6,948,950 10

Shefali Munjal

Rohit Chanana Rohit Chanana

Rajeev Tandon

Sanjay Gupta

Total

Directors Or relatives Of Directors

1000

Anupam Bhasin

Puja Investments Private Limited

Corporate Bodies

100%

268,876

7,218,876 Note: Shareholding pattern as on AGM dated 29th Sep 2012 MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

SAMPLE

Private: Domestic Company – company2 (3/5) Financial Snapshot i i lS h Revenue INR mn

K Key Ratios i

Profit INR mn

Revenue Profit / Loss

Particulars

2008

2009

2010

Financial Summary • 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 p y p , • The company reported total income of INR 583,550.5 mn 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 over FY 2009

2009

2008

2007

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

2007

y‐o‐y change 2010 (2010‐09) ‐4.41

36.02%

40.43%

13.07%

42.09%

‐2.53

8.53%

11.06%

‐12.88%

‐8.32%

‐9.15

10.22%

19.37%

‐19.05%

‐6.58%

‐5.45

10.56%

16.00%

‐12.64% ‐12.11%

‐22.22

60.59%

82.82%

17.97%

‐2.71

26.40%

29.11%

‐47.59% ‐31.94%

‐5.70

10.24%

15.94%

‐12.63%

‐40.98

60.09%

101.07% ‐83.15% ‐45.35%

5.66

62.71%

57.05%

86.70%

57.88%

6.96

28.30%

21.34%

31.10%

12.63%

0 00 0.00

0 11% 0.11%

0 82% 0.82%

1 94% 1.94%

55.89% ‐8.36%

Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Interest costs (% of Sales)

Liquidity Ratios Current Ratio Cash Ratio

‐17.28%

2.36

2.85

1.92

2.08

50.15%

1.56

1.04

0.64

0.18

0.43

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

N.A.

0.01

N.A.

149.73%

0.01

N.A.

0.30

‐12.44%

333.61

381.02

16.20

21.72

‐20.90%

6.81

8.60

6.34

5.45

‐14.51%

1.16

1.36

0.96

1.00

7.02%

1.72

1.61

1.74

1.99

20.66%

2.99

2.48

3.63

3.84

‐12.24%

1.20

1.36

0.96

1.45

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

Improved

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Decline

SAMPLE

Private: Domestic Company – company2 (4/5) Key Information Description

Details

Overview

Extended Product Portfolio

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Public: Domestic Company – company2 – SWOT Analysis (5/5) • Profitability risk associated with declining ARPU in India

• Strong market presence in India • Well integrated business operations W ll i t t db i ti • Strong strategic partnerships with other companies and vendors

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

• Cut‐throat competition in the telecom sector

• DTH market in the countryy

• Telecom regulations

• Positive outlook for Indian telecom market

SAMPLE MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Case Study 1 Client Organization

Industry

Advertising Platform

Financial Services

Case: X via Vodafone live Objective

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

Mobile Ad Application

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

Outcome

• Total 75,410 hits • 793 leads acquired • Hit‐to‐lead conversion ratio 1% • 12 signed up • Lead‐to‐signup ratio 1.5% L dt i ti 1 5%

Measurement Technology Used

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

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Mobile Ad 2 – PepsiCo India

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 Text Text Text Text Text

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

Strategic Recommendations (‐/‐)

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

Recommendation1

Recommendation2

• 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 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

MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT

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MOBILE ADVERTISING MARKET ‐ INDIA 2013.PPT