It has come out from this study that social applications prevail when it comes to mobile devices. Thus marketers need to leverage with avenue of advertising. Sizeable chunk of respondents are willing to receive mobile ads. But, those who are not willing to receive in-app ads, do not show motivation to accept ads despite of relevant information and incentive. This is big challenge for marketers so as to motivate consumers to accept the communication.

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An empirical Study of In-App Advertising in Mobile Devices: Indian Scenario
Prepared By:
Preetish Panda
PGDM (Communication)
Roll No: 37
Under the Guidance of:
Prof. Hardeep Singh

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Table of Contents
1. Introduction……………………………………………………………………………03
a. Context (Statement of the problem/issue)………………………………………………03
b. purpose of the study and justification…………………………………………………..03
c. Issues under study - questions / objectives / hypotheses………………………………..05
d. Significance of study……………………………………………………………………05
2. Review of the literature………………………………………………………………..05
a. Mobile marketing and advertising………………………………………………………05
b. Dynamics of mobile marketing……………………………………………………........06
c. Mobile applications……………………………………………………………………..08
d. Advertising via Mobile Applications (in-app advertising)……………………………..09
3. Methodology…………………………………………………………………………...10
a. Research design…………………………………………………………………………10
b. Sample…………………………………………………………………………………..10
c. Data collection and analysis……………………………………………………………..11
4. Results…………………………………………………………………………………..21
5. Recommendations……………………………………………………………………...21
6. References………………………………………………………………………………22

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1. Introduction
a. Context
Marketing professionals continuously adjust their strategy and tactics to efficiently match their
consumers’ evolving behaviour and habits. With the recent rise in adoption of mobile
devices and particular smartphones, mobility is quickly becoming a normal way of life. Fun,
exciting and a newest interactive advertising medium, mobile advertising is a form of
advertising on mobile (wireless) phones or other mobile devices. In India, 81% of the
population uses mobile phone (Nielsen, 2013) and 10% uses smart phone (Nielsen, 2013). The
concept of ubiquity has arrived and mobile devices can be considered as the most ubiquitous
personal item in the world (Jayawardhena, Kuckertz, Karjaluoto, Kautonen, 2009). Over the
past three years alone, Internet usage in India increased from 100 to 200 million people,
growing far more rapidly than the decade it took to raise Internet users from 10 million to 100
million. A report from the Internet and Mobile Association of India (IAMAI) estimates that by
June 2014, India will have 243 million Internet users, at which point in time it is expected to
overtake the US as the second largest Internet base in the world. This report further observes
that the mobile Internet is going to be the next game changer for the Internet in India, with
Indian mobile Internet users experiencing huge growth reaching 155 million in March and 185
million in June 2014 (IAMAI, 2013).
The Internet has been reinvented on mobile devices becoming smaller, more personal,
customizable, and accessible anywhere on the go. Traditional forms of interactive
advertising are therefore now in the process of evolving as they migrate from computers to
mobile devices. Mobile advertising includes a broad range of opportunities such as search,
banner displays, messaging, multimedia messaging, video and advertising within apps.
Mobile web advertising through banners and in-app advertising constitute about 80% (IAMAI,
2013) of the mobile advertising market. A trending form of mobile display is to include the use
of rich media within the banner ads. This includes banners that have the capabilities to expand,
offering advertisers a larger space to communicate their message. Games can also be
placed within a banner to make the user’s experience more interactive and engaging.
b. Justification of Study
Among various types of digital ad types used in India, Mobile ad spend has shown maximum
year-on-year growth (88%) in the financial year 2012-2013.

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This shows the tremendous popularity gained by mobile media among brand managers.
According to this edition of IMRB International’s primary survey findings, the mobile
advertising market is distributed among the following types of mobile advertisements:
Below shown are the conversion ratios of various ad types according to the findings of IMRB
International’s syndicated study: I-Cube 2012. Figure below shows the post ad viewing
behaviour. Emails, mobile and social media ads show very high view to click ratio (more than
60%).
Post click behaviour tells an interesting story, with emails and social media advertising
showing the highest conversion from click to look for information online (81% in both
cases). Mobile ads have the highest Search to Bought ratio (75%),
According to this edition of IMRB International’s primary survey findings, the mobile
advertising market is distributed among the following types of mobile advertisements
SMS Advertising
-App Advertising
If we delve deep into various mobile ad spends, the advertising viewed on mobile browsers
or WAP forms 40% of the total mobile ad spends and mobile video & TV together
with SMS and MMS advertising form another 20%. The remaining 40%, which is INR 92
Crores, is estimated to be spent on In-App Advertising,

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According to study conducted by Mobile Marketing Association and Vserv Game/App is the
most downloaded type of content in India (MMA, 2013). Also Gartner’s report says the split
between in-app and Web display is taking longer to shift in favor of the latter, as the use of
HTML5 tools in mobile website development is taking longer to impact the market (Gartner,
2014). In a study conducted by Opera Media Works, overall in-app ads perform 1.7X better
than mobile web ads (OperaMediaWorks, 2013).
Thus as the consumers become more and more mobile application centric, the significance of
in-app advertising will continue to grow. Hence, this project is focused on study of in-app
advertising in Indian context.
c. Issues under study
 Type of Mobile devices used
 Type of Mobile Application
 Amount of time spent on application
 Willingness and influencing factors to receive ads in mobile apps
 Click-to-Conversion Pattern
 Attitude towards in-app ads
 Perception of the brand seen through in-app ads
 Demography of target audience
 Relation of demography with attitude towards in-app ads
d. Significance of Study
The result of this project will be supplement marketers use this relatively new and niche form
of advertising via mobile applications for building brand. Apart from that it will also help
student community and academia better understand consumer behaviour with respect to in-app
advertising.
2. Review of Literature
In this context the acceptance and efficiency of mobile marketing will be reflected on in
addition to consumer perceptions, responsiveness and attitudes. Moreover, permission and
control in the mobile marketing context will be reviewed because these concepts have been
found to influence the effectiveness of mobile marketing.
a. Mobile Marketing and Advertising
As an extension of the Internet environment, the high penetration of mobile phones in recent
years has created a good opportunity for wireless Internet applications, including wireless
marketing and advertising. Wireless Internet services allow interactive access to Internet-based
applications and contents using wireless devices such as mobile phones and personal digital
assistants (Tsang, Ho, Liang, 2004).
According to the Mobile Marketing Association, the worldwide mobile marketing trade
association, mobile marketing can be defined as: “a set of practices that enables organizations
to communicate and engage with their audience in an interactive and relevant manner
through any mobile device or network” (MMA, 2009). Carat Interactive Company has also
divided mobile advertising according to the transmission mode into Push and Pull (Leppäniemi

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et al., 2005). Push is to actively send the messages wireless users, and Pull is the ads seen by
the users when browsing the web.
The Wireless Advertising Association (WAA) defines wireless marketing as sending
advertising messages to mobile devices such as mobile phones or PDAs through the wireless
network. Wireless Internet service can be offered by a range of different service providers,
including cellular operators, fixed and wireless portals, wireless application service providers,
device vendors, consumer brands, and mobile virtual network operators (Zoller, Housen, and
Matthews, 2001). Empowered by the Web’s interactive and quick-response capabilities,
wireless marketing is a very promising direct-marketing channel. Many direct-response
advertisements and some brand-building ones have been used for time-sensitive
communication (Barwise and Strong, 2002).
Mobile advertising and Internet advertising have many features in common—both are
emerging media used to deliver digital texts, images, and voices with interactive, immediate,
personalized, and responsive capabilities (Yoon and Kim, 2002). Internet advertising allows
individual customers to be identified and their behaviour to be analysed. Mobile advertising
relaxes the mobility constraint associated with fixed-line Internet access. One may expect
mobile advertising to be more favourable to consumers for location-sensitive and time-critical
events.
Since the mobile phone is a very personal device that allows an individual to be accessed
virtually any time and anywhere, mobile advertising must be more personalized and may take
different forms. Based on different strategic applications, wireless marketing can be either
permission-based, incentive-based, or location-based (Zoller, Housen, and Matthews, 2001).
b. Dynamics of Mobile Marketing

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‘The connected customer’ relaionships’ (adapted from marketing science institute, 2006)
Source: M.J. Becker, Managing Director, North America, Mobile Marketing Association
The presence of the mobile is a new dynamic in the hands of digitally confident consumers:
 It is the essential link between the consumer and their immediate environment.
 It is the first direct bridge and the barrier to understanding brands and communications.
 The digitally connected consumer expects unity of brand experience and instant
connection through all customer service touch points.
 The mobile potentially gives consumers more power to instantly research, interrogate,
compare and make informed product choices.
 Brands cannot offer a second best experience on the mobile and expect continued
loyalty.
 Consumers can more readily cross-reference with peer groups, product prices and
performance histories.
 The instantaneous nature of mobile phone inherently limits the scope to absorb complex
information and thus reduces the time interval in which to make purchase decisions.
The main objective of mobile marketing is to increase the awareness level of the brands.
Besides this with the help of mobile marketing, a company can gather information about the
customer’s needs and preferences. Innovative ideas for mobile marketing campaigns will also
trigger a kind of buzz marketing (Levinson, 2002, p. 142).
A Comparison of Marketing Communication Approoaches (Sultan and Rohm, 2005)
Permission-based advertising differs from traditional irritative advertising in that messages
about specific products, services, or content are sent only to individuals who have explicitly
indicated their willingness to receive the message. Consumers often impatiently ignore the
message when interrupted by an advertisement. By relying on the permission of the target
audience, permission-based advertising focuses on reducing the irritation.

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Incentive-based advertising provides specific financial rewards to individuals who agree to
receive promotions and campaigns. For example, mobile phone companies may reward
customers with free connection time for listening to voice advertisements. Both permission-
based and incentive-based advertising mechanisms are feasible for mobile advertising because
the wireless technology makes it possible to identify individual users.
In addition to individual identification, mobile technology also makes it possible to locate a
particular consumer. Location-based advertising takes advantage of this feature to target
people in a certain location. Advertisements are sent based on where the user is or where the
user is going (Zoller, Housen, and Matthews, 2001).
c. Mobile Applications
It’s important to understand the key differences between a mobile website and a mobile app,
which are both accessed on handheld devices such as smartphones (e.g., iPhone, Android and
Blackberry) and tablets.
A mobile website is similar to any other website in that it consists of browser-based HTML
pages that are linked together and accessed over the Internet (for mobile, it’s typically Wi-Fi,
or 3G or 4G networks). The obvious characteristic that distinguishes a mobile website from a
standard site is in the design, while a mobile app is built for a smaller handheld display and
touch-screen interfaces. Like any website, mobile websites can display text content, data,
images and video. They also access mobile-specific features, such as click-to-call (for dialing
a phone number) or location-based mapping.
By contrast, mobile apps are actual applications that are downloaded and installed on your
mobile device, rather than being rendered within a browser. Users visit device-specific portals
such as Apple’s App Store, Android Market or Blackberry App World to find and download
apps for a given operating system. The app may pull content and data from the Internet, similar
to a website. Or it may download the content so it can be accessed without an Internet
connection (compuware.com, 2012).
Existing mobile apps support a wide range of functions that include providing information on
hotels, restaurants and bars, as well as transportation arrangements and tourist attractions;
enabling location or map directions; and supporting picture and video sharing through email
and social media websites (Tealeaf Technology, Inc., 2011). Mobile apps are also useful in
making last-minute arrangements on accommodation and transportation (Martin, 2011).
It is predicted that by 2017, mobile apps will be downloaded more than 268 billion times,
generating revenue of more than $77 billion and making apps one of the most popular
computing tools for users across the globe, according to Gartner, Inc. As a result, mobile users
will provide personalized data streams to more than 100 apps and services every day (Gartner,
2014).

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d. In-App Advertising
In-app advertising is a relatively simple way for developers to make money quickly from their
creations, while largely maintaining a good user experience. It has worked for Angry Birds,
and media-based apps such as The Guardian – even the mobile versions of Twitter and
Facebook include ads (Nokia, 2012).
Successful in-app advertising starts with the basics – here are some of the key performance
indicators (KPIs) that affect in-app advertising:
Some of the most common ad formats:

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According to a survey conducted by Interactive Advertising Bureau, publisher offerings vary
by OS/Device combination (IAB, 2011).
Source: IAB, Prevailing Mobile In-A pplication Ad Formats, v.3, Nov., 2011
3. Methodology
a. Research design
This research is primarily a descriptive research as it will serve following purposes:
 To describe the characteristics of certain groups
 To determine the proportion of people who behave in a certain way
 To determine relationships between variables
This will be a cross-sectional study, as it involves drawing a sample of elements from the
population of interest. Characteristics of the elements, or sample members, are measured only
once.
b. Sample
City Surveyed Sample Size Sampling Technique
Mumbai 102 Convenience Sampling

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c. Data collection and analysis

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Mobile Devices Used

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(Apps used)

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(Factors to motivate acceptance of In-App advertsing)
Receive Ads if Incentive
Provided
Receive_Ads_if_Required_I
nformation_Provided
Recive_Ads_if_Relavant_To_Pro
duct_looking_to_buy
N Valid 102 102 102
Missin
g
0 0 0
Mean 2.43 2.46 2.52
Median 2.00 2.00 2.00
Mode 2 2 2
(1= Strongly Agree, 2 = Agree, 3=Neutral, 4= Disagree, 5= Strongly Disagree)

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Consumer Perception of Brand Advertised via Mobile Apps
Perception of Brand
(Valuableness)
Perception of Brand
(High Quality)
Perception of Brand
(Modernness)
N Valid 102 102 102
Missing 0 0 102
Mean 3.13 4.02 3.19
Median 3.00 4.00 3.00
Mode 3 4 3
(1= Strongly Disagree, 2 = Disagree, 3=Neutral, 4=Agree, 5= Strongly Agree)
Consumer Perception of In-App Mobile Advertising
(1= Strongly Disagree, 2 = Disagree, 3=Neutral, 4=Agree, 5= Strongly Agree)
Perception
_of_In_Ap
p_ads
(Interestin
g)
Perception
_of_In_Ap
p_ads
(Informativ
e)
Click_Ad_
Only_Whe
n_Relevan
t
Perception
_of_In_Ap
p_ads
(Helpfulne
ss in
finding
Right
Product)
In_App_Ad
s_Infuenc
e_Buying_
Decision
Content of
In Apps
Ads
Distract
Trustworth
iness_of_I
n_App_Ad
s
In_App_ad
s_Irritant
Avoid_Clic
king_On_
Ads
Product_R
ecall_in_a
pp_ads
Irrelevanc
e_of_In_a
pp_ads
Valid 102 102 102 102 102 102 102 102 102 102 102
Missing 0 0 0 0 0 0 0 0 0 0 0
3.77 4.07 2.58 3.71 3.81 3.97 2.68 2.26 3.13 2.52 2.55
4.00 4.00 2.00 4.00 4.00 4.00 3.00 2.00 3.00 3.00 3.00
5 4 2 3 4 4 1
a
1
a
2 1
a
1
a. Multiple modes exist. The smallest value is shown
Statistics
N
Mean
Median
Mode

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Factor Analysis
(ANOVA)
Appeal of the In-App ad
• Interesting
• Distracting factor
• Irritant
• Trustworthiness
ConsumerAttitude towards In-App ads
• Click only when relevant
• Avoid clicking on ads
Consumer Perception
- Ads are informative
- Help in finding right product
- Influence on buying decision
- Relevance of In-app ads
1.Appeal
2. Attitude
3. Perception
Age
Gender
Most used
App
Educational
Qualification
Monthly
Income

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4. Result
Following are the salient insights derived from the analysis done in the previous chapter:
1. Among mobile devices, the top most used devices are Smartphones and Tablets.
2. 64% of mobile devices run on Android operating system.
3. In a day on an average around 60% of users spend maximum 90 minutes on mobile
apps.
4. Following are most used application types:
 Social
 Media and Entertainment
 News
5. Users spend maximum amount of time on following apps:
 Social (52%)
 Media and Entertainment (16%)
 Gaming (16%)
6. 18.75% of sample size are willing to receive mobile advertisements via apps and
35.42% sample size are currently coming across in-app ads.
7. Relevant information, Incentive don’t have any significant impact on motivation to
accept communication in-app advertising.
8. 38% of sample size have clicked on ads shown in mobile app and 10% of them have
made final purchase.
9. 59.39% of sample size agree that the brand advertised in mobile app is of high quality.
10. The sample population considers in-app mobile ads informative and most of the
respondents find these ads interesting.
11. Majority of sample size agree that in-app mobile ads distracts them and they also don’t
trust them in terms of landing page.
12. There is a significant relationship between consumers in the age group of 18-25 with
attitude towards in-app advertising.
13. There is no significant relation of gender on any of the factors (Perception, Appeal and
Attitude).
14. There is significant relationship between social app users and perception towards in-
app advertising.
15. No significant relationship between educational qualification and the three factors.
5. Recommendation
It has come out from this study that social applications prevail when it comes to mobile devices.
Thus marketers need to leverage with avenue of advertising. Sizable chunk of respondents are
willing to receive mobile ads. But, those who are not willing to receive in-app ads, do not show
motivation to accept ads despite of relevant information and incentive. This is big challenge
for marketers so as to motivate consumers to accept the communication. There is also require-
ment to increase trust factor and make in-app more appealing in order to not make them
irritating. Also, these ads should not interfere with the information consumption of the users.
Age group of 18-25 is most receptive in terms of attitude towards in-app mobile advertising.
This can be further utilised to communicate to younger generation. It is concluded that in-app
advertising has some ground among Indian consumers and marketers need to use this medium
for meaningful communication in order to use this as one of the tools for brand building.

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6.References
1. Nielson (2013) Mobile Consumer Report, Retrieved from
http://www.nielsen.com/content/dam/corporate/uk/en/documents/Mobile-Consumer-
Report-2013.pdf on 24th March, 2014
2. Jayawardhena, C., Kuckertz, A., Karjaluoto, H., Kautonen, T., “Antecedents to
Permission Based Mobile Marketing: An Initial Examination,” European Journal
of Marketing, Vol. 43, pp. 473-499, 2009.
3. IAMAI (2013) Retrieved from
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25th March, 2014
4. IAMAI (2013) Indian Digital Advertising, Retrieved from
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%20Report%202013_Final_68.pdf on 20th March, 2014
5. IMRB and vServ (2013), Retrieved from http://www.vserv.mobi/wp-
content/uploads/2013/09/Mobile-Internet-Consumer-India.pdf on 22nd March, 2014
6. Gartner (2014) “Gartner Says Mobile Advertising Spending Will Reach $18 Billion in
2014” Retrieved from http://www.gartner.com/newsroom/id/2653121 on 21st March,
2014
7. Opera Media Works (2013) The State of Mobile Advertising Q2, Retrieved from
http://www.operamediaworks.com/sma_q2_2013.html on 22nd March
8. Mobile Marketing Association, “MMA Updates Definition of Mobile Marketing,”
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marketing in March 2014.
9. Leppäniemi, Matti and Heikki Karjaluoto 2005. Factors Influencing Consumers'
Willingness to Accept Mobile Advertising: A Conceptual Model.
International Journal of Mobile Communications, 3 (3), 197-213.
10. ‘The connected customer’ relaionships’ (adapted from marketing science institute,
2006) Source: M.J. Becker, Managing Director, North America, Mobile Marketing
Association
11. Levinson, J.C. (2002), Guerilla Advertising, Business Tech International Press,
Bucharest
12. Martin, T. W. (2011, July 21). New benefits of booking late. The Wall Street Journal.
Retrieved from
http://online.wsj.com/article/SB10001424052702304911104576445933018598882.ht
ml in March, 2014
13. Tealeaf Technology, Inc. (2011). The e-booker: Understanding how travel customers
use the web. Retrieved from http://www.e-tid.com/getdoc/731a2e48-3d74-485f-9dc6-
3fbf5dd9b1d5/Tealeaf-eBookersWhitePaper2010.aspx in March, 2014
14. A Comparison of Marketing Communication Approoaches (Sultan and Rohm, 2005)
15. Melody M. Tsang, Shu-Chun Ho, and Ting-Peng Liang, 2004. Consumer Attitudes
Toward Mobile Advertising: An Empirical Study
16. Barwise, P., and Strong, C. Permission-based mobile advertising. Journal
of Interactive Marketing, 16, 1 (2002), 14–24.
17. Yoon, S.J., and Kim, J.H. Is the Internet more effective than traditional media?
Factors affecting the choice of media. Journal of Advertising Research, 41, 6 (2001),
53–60.

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18. Zoller, E.; Housen, V.L.; and Matthews, J. Wireless Internet business models: Global
perspective, regional focus. OVUM 2001 Report, pp. 1–64.
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14th March, 2014
20. Compuware (2012) Retrieved from
http://offers2.compuware.com/rs/compuware/images/Mobile_App_Survey_Report.pd
f on 16th March, 2014
21. Nokia, Retrieved from http://developer.nokia.com/images/uploads/pdfs/insights-06-
in-app-advertising.pdf on 14th March, 2014
22. Interactive Advertising Bureau (2011), Prevailing In-Application Advertising Formats
Retrieved from
http://www.iab.net/media/file/PrevailingMobileInAppAdFormatsv3.PDF on 18th
March, 2014