Market Research Report : Mobile marketing in India 2012

Mobile Marketing in IndiaMobile Marketing in India

June 2012

Executive Summary

Market

Domestic market of mobile marketing, which is largely dominated by segment1, is valued at INR x1 bn in 20‐‐

Market size of the segment2 in India was approximately INR x2 bn in 20‐‐ and it is predicted to grow at a CAGR of x3%

Drivers:

Drivers & Challenges

grow at a CAGR of x3%

Challenges:

Affordability of Next Generation Mobile Networks Low Smartphone & Tablet Penetration

Rising Mobile Device Adoption and Wireless Subscriber BaseRising Usage of Mobile VAS ApplicationsChallenges Low Smartphone & Tablet Penetration

in Rural AreasRising Usage of Mobile VAS, Applications and Online ContentsHigh Affordability Introduction and Availability of Next Generation Cellular Networks

Market Trends Trend1

Trend2

Trend3

Mobile Marketing

Trend3

Major Players

2ergo Group Affle Pte Gingersoft Media

2MOBILE MARKETING IN INDIA 2012.PPT

Player Profile InMobi Komli Media Vserv Digital Services

•Introduction

M bil M k ti O i•Mobile Marketing Overview

•Drivers & Challenges

•Market Trends

•Market Opportunities

•Mobile Marketing Player Profiles

•Strategic RecommendationsStrategic Recommendations

•Appendix


Introduction

Mobile Marketing Overview

•Mobile marketing is the act of using mobile devices such as cellular phones & Tablet PCs as a medium to deliver marketing and promotional messages

•With rising competition and growing need for customer acquisition, newer mediums & methods of marketing and 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 locationinterests, demographical characteristics & relevant geological location

•With exponentially growing num3ber 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

Trend of allocating smaller amount of the overall marketing budget to mobile media by marketers is rapidly changing

•Domestic market of mobile marketing, which is largely dominated by segment1, is valued at INR x1 bn in 20‐‐• The trend of using other elements such as branding and promotion also exist but their contribution in overall mobile marketing spending is negligible

Market Overview – India

spending is negligible

•Market size of the segment2 in India was approximately INR x2 bn in 20‐‐ and it is predicted to grow at a CAGR of x3%• Total number of mobile subscribers in India has surpassed that of the Internet users making the cellular medium more promising for marketing, advertising & promotional activities Present number of mobile phone subscribers in India is over x4 mn asp Roughly x5 mn mobile subscribers use mobile internet in India which is the largest in the Asian sub‐continent

•Mobile marketing is slowly picking up pace in India with adoption of 3G, increasing penetration of mobile devices as currently marketers allocate a very negligible part of the marketing budget for mobile campaigns With increasing awareness regarding the benefits and cost advantages over o, companies are inclining more towards mobile marketing

Mobile Advertising – Market Size

INR bn

Mobile Marketing – Market Size

y5INR bn

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y5

Z1%

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20‐‐20‐‐20‐‐20‐‐

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20‐‐

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Mobile Marketing Value Chain

Solution1

Marketing Planning & Content Creation

presen

tative

ient) Solution2 Solution4

Element5

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Brand Re

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Element1

Element3 Element4

Element2

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Solution3

Cellular Phone Tablet PCPortable

Media Player

6

Mobile Networks & Wi‐Fi BroadcastTarget Consumer (Via Devices)

MOBILE MARKETING IN INDIA 2012.PPT

Drivers & Challenges

Drivers

Rising Mobile Device Adoption and g pWireless Subscriber Base

Rising Usage of Mobile VAS, Applications & Online Contents

Challenges

Affordability of Next Generation Mobile Networks

L S h & T bl P iHigh Affordability

Introduction and Availability of Next Generation Cellular Networks

Low Smartphone & Tablet Penetration in Rural Areas

Increase in Disposable Income and Economic Advancement


Market Trends

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Trend1


Trend2


Trend3

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Market Opportunity ‐ Verticals (‐/‐)

• Digital media is being embraced by marketers as an efficient tool for promoting goods and services across the country with higher reach and ability to market product based on location and interest

• The major industries where mobile marketing hold immense opportunities are briefed below

• Sector1 consists of segmentx1, segmentx2, segmentx3, segmentx4 and segmentx5• Market size of the sector can be presented in the combined form of INR x1 tr and x2 mn unit consumption per annum as of 20‐‐

• Mobile marketing can be implemented by processx1, benefitx1, usagex1 and applicationx1

Sector1

• Sector1 consists of segmenty1, segmenty2, segmenty3, segmenty4 and segmenty5• Market size of the sector can be presented in the combined form of INR y1 tr and y2 mn unit consumption per annum as of 20‐‐

• Mobile marketing can be implemented by processy1, benefity1, usagey1 and applicationy1

Sector2

Mobile marketing can be implemented by processy1, benefity1, usagey1 and applicationy1

• Sector1 consists of segmentza1, segmentz2, segmentz3, segmentz4 and segmentz5• Market size of the sector can be presented in the combined form of INR z1 tr and z mn unit consumption per annum as of 20‐‐Sector3

• Mobile marketing can be implemented by processz1, benefitz1, usagez1 and applicationz1

• Education sector consists of schooling, higher education (graduation, post‐graduation & PhD programs) and vocational education (professional and specialized education)It k t i b t d i th bi d f f INR 2 4 t d 450 t d t / i 2011Sector4


• Its market size can be presented in the combined form of INR 2.4 tr and 450 mn students/annum as in 2011• With increased usage of mobile devices amongst academics and aspiring candidates, mobile marketing can be beneficial for educational products and services

Sector4

Public: Domestic Company – Company1 (‐/‐)

Company Information Offices and Centres – India

Corporate Address

Adress line1

Adress line2

City. Countryy y

Tel No. +91‐ ‐‐‐ ‐ ‐‐‐‐‐

Fax No. ++91‐ ‐‐‐ ‐ ‐‐‐‐‐

Website www.‐‐‐‐‐‐.com

City Name

Products and Services

Year of Incorporation 19‐‐

Ticker Symbol ‐‐‐‐‐‐

Stock Exchange Exchange1 Head Office

Key People


Category Products/Services

N D i tiServices

• Mobile Advertising

• Mobile Marketing

Name Designation

Mr. X Chief Executive Officer

Mr. Y Chief Financial Officer

Mr. Z Chief Operating Officer



i i l S h K iFinancial Snapshot Key Ratios

Net Profit/LossTotal Income

100

150

6

8

ProfitINR mn

RevenueINR mn

c4

c3c2

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin 2.23 0.74% ‐1.49% ‐9.59% ‐10.70%

0

50

100

0

2

4

6

20--20--20--

c2

20--

c1Net Margin ‐34.74 ‐35.26% ‐0.51% 1.00% ‐37.12%

Profit Before Tax Margin ‐53.05 ‐53.57% ‐0.51% ‐25.32% ‐12.44%

Return on Equity ‐10.93 ‐11.06% ‐0.14% 0.21% ‐5.79%

Return on Capital Employed 0.18 0.06% ‐0.12% ‐0.55% ‐0.48%

Return on Working Capital 78.72 77.98% ‐0.74% 0.18% ‐3.99%

Return on Assets ‐2.26 ‐2.29% ‐0.04% 0.05% ‐1.56%

• The company incurred a net profit of INR a1 mn in FY 20‐‐, as compared to net profit of INR a2 mn in FY 20‐‐

• The company reported total income of INR a3 mn in FY 20‐‐, registering an increase of a4 per cent over FY 20

Financial Summary Return on Fixed Assets ‐2.88 ‐2.94% ‐0.06% 0.09% ‐2.98%

Cost RatiosOperating costs (% of Sales) ‐2.95 99.22% 102.16% 112.14% 113.76%

Administration costs (% of Sales)

1.04 18.03% 17.00% 15.75% 18.00%

Interest costs (% of Sales) 20.57 63.33% 42.77% 45.59% 29.69%registering an increase of a4 per cent over FY 20‐‐

• The company earned an operating margin of a5 per cent in FY 20‐‐, an decrease of a6 percentage points over FY 20‐‐

• The company reported debt to equity ratio of a7 in FY 20‐‐, an increase of a8 per cent over FY 20‐‐

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Liquidity RatiosCurrent Ratio ‐54.82% 0.82 1.81 4.42 7.13

Cash Ratio ‐96.41% 0.19 5.34 2.99 5.66

Leverage RatiosDebt to Equity Ratio 45.86% 3.82 2.62 2.92 2.72

D bt t C it l R ti 6 85% 0 75 0 70 0 72 0 71Key Financial Performance Indicators

Indicators Value (‐‐/‐‐/20‐‐)Market Capitalization (INR mn) 10,985Total Enterprise Value (INR mn) 87,544EPS (INR)

Debt to Capital Ratio 6.85% 0.75 0.70 0.72 0.71

Interest Coverage Ratio 124.52% 0.01 ‐0.05 ‐0.27 ‐0.46

Efficiency RatiosFixed Asset Turnover ‐9.25% 0.08 0.09 0.07 0.06

Asset Turnover 18.69% 0.06 0.05 0.04 0.03

Current Asset Turnover 5.19% 0.47 0.45 0.11 0.07

11

EPS (INR) 48.39PE Ratio (Absolute) 66.9

Improved Decline

Working Capital Turnover ‐308.15% ‐2.08 1.00 0.14 0.08

Capital Employed Turnover 58.09% 0.29 0.19 0.16 0.12



Key Business Segments Key Geographic Segments

100% 100%

Product1 Product2 Product3 India Outside India

0%

50%

100%

0%

50%

100%

Key Information

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0%20‐‐ 20‐‐20‐‐20‐‐

Description Details

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Extended Product Portfolio

• It provides advertising, merchant, and publisher programs to mobile phone users and advertisers

• The company also operates wireless community myGamma, an advertising network that serves ads on mobile publisher sites in the Americas, Europe, Asia, Africa, and the Middle East


Private: Domestic Company – Company1 (‐/‐)

Company Information Offices and Centres – India

Corporate Address

Adress line1

Adress line2

City. Countryy y

Tel No. +91‐ ‐‐‐ ‐ ‐‐‐‐‐

Fax No. ++91‐ ‐‐‐ ‐ ‐‐‐‐‐

Website www.‐‐‐‐‐‐.com

City Name


Year of Incorporation 19‐‐

Ticker Symbol ‐‐‐‐‐‐

Stock Exchange Exchange1 Head Office

Key People


Category Products/Services

N D i tiServices

• Mobile Advertising

• Mobile Marketing

Name Designation

Mr. XChief Executive Officer and Chief Operations Officer

Mr. Y President of Sales and Marketing


i i l S h K i


Financial Snapshot Key Ratios

Particulars y‐o‐y change (2010‐09)

2011 2010 2009 2008

Profitability RatiosOperating Margin ‐5.75 59.76% 65.51% 75.51% 84.64%

Profit / Loss

Revenue

ProfitINR mn

RevenueINR mn z2 Net Margin ‐0.65 20.94% 21.58% 35.03% 43.42%

Profit Before Tax Margin 4.60 27.02% 22.41% 37.00% 46.07%

Return on Equity ‐0.44 16.63% 17.07% 44.01% 30.53%

Return on Capital Employed ‐3.04 57.06% 60.09% 121.39% 108.12%

Return on Working Capital ‐12.19 22.76% 34.95% 62.37% 51.28%

Return on Assets ‐0.41 16.59% 16.99% 43.60% 30.45%

z4z3

z2

z1

Financial Summary

Return on Fixed Assets 14.16 93.08% 78.92% 166.10% 98.92%

Cost RatiosOperating costs (% of Sales) 5.58 36.86% 31.28% 22.96% 11.18%

Administration costs (% of Sales)

‐3.68 14.87% 18.56% 18.79% 21.10%

Interest costs (% of Sales) ‐0 01 0 04% 0 05% 0 00% 0 18%

20‐‐20‐‐20‐‐20‐‐

• The company incurred a net profit of INR x1 mn in FY 20‐‐, as compared to net profit of INR x2 mn in FY 20‐‐

• The company reported total income of INR x3 mn in FY 20‐‐, registering an increase of x4 per cent over FY 20‐‐

Interest costs (% of Sales) ‐0.01 0.04% 0.05% 0.00% 0.18%

Liquidity RatiosCurrent Ratio 19.05% 5.28 4.44 4.10 2.32

Cash Ratio ‐19.59% 2.29 2.85 1.75 1.04

Leverage RatiosDebt to Equity Ratio N.A. N.A. N.A. N.A. N.A., g g p

• The company earned an operating margin of x5 per cent in FY 20‐‐, a decrease of x6 percentage points over FY 20‐‐

Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A.

Interest Coverage Ratio 25.57% 1791.20 1426.42 #DIV/0! 488.03

Efficiency RatiosFixed Asset Turnover 20.70% 4.21 3.49 4.65 2.17

Asset Turnover ‐0.12% 0.75 0.75 1.22 0.67

Current Asset Turnover ‐30.24% 0.83 1.20 1.32 0.64

14

Current Asset Turnover 30.24% 0.83 1.20 1.32 0.64

Working Capital Turnover ‐33.35% 1.03 1.54 1.75 1.13

Capital Employed Turnover ‐0.31% 0.75 0.75 1.23 0.67

Improved Decline



Key Information

Description Details

Overview

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• The company offers advertising formats and targeting capabilities for mobile Web,

applications and games videos and 3G video voice portals as well as media mobileExtended Product Portfolio

applications and games, videos, and 3G video voice portals, as well as media mobile

campaigns

• Its application analytics provides real‐time accurate data to developers about how

consumers are using their mobile applications


Strategic Recommendations (‐/‐)

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Market Research Report : Mobile marketing in India 2012

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