Trend

Mobile Advertising

Mobile advertising is coming out of the bulk SMS push model to a more sophisticated and targeted mechanism to reach out to the right users, at the right time. By Varun Aggarwal

Have you ever wondered what the best medium to reach the largest number of people for an advertising and marketing campaign is in India? There are about 60 million television sets in the country and about four million PCs. The reach of newspapers and other magazines is even lower. One medium, which has the highest reach in the country, is the mobile. There are over 300 mobile subscribers in India and each one of them can be reached through mobile advertising and marketing. Moreover, apart from online advertising, there is often no way to check if anyone views/ reads/ listens to your advertisement. With mobile advertising, you can overcome this challenge and interact with your target customers in a more efficient manner.

When we qualify mobile as one of the potential marketing and advertising media, we refer to the following inherent characteristics of mobile

• It is one of the most personal touch point, providing ‘anywhere, anytime’ access to the customer
• It can trigger instant actions, responses and conversions occur in real-time
• The mobile channel unlike the online channel can be completely controlled so that spam can be minimized, thereby making marketing and advertising relevant and non-intrusive

However, we are still seeing that mobile marketing and advertising is at a nascent stage in India. It is yet to evolve into a popular and established channel in the marketing mix. Nevertheless, spending in this medium has been increasing quite steadily. According to Girish Trivedi, Deputy Director, ICT Practice, Frost & Sullivan, South Asia & Middle East, “The mobile advertising market in CY2007, stood at Rs 27 crore and grew to approx Rs 80-100 crore in CY 2008. This 200-250% growth rate is expected even in CY 2009. Even while the base for mobile advertising is pretty low at the moment, the potential is extremely high.”

Modes of delivery

As the capabilities of handsets vary tremendously, operators are required to leverage as many delivery mechanisms as possible for mobile advertising. There are four major delivery mechanisms on the mobile—Voice, SMS, Unstructured Supplementary Service Data (USSD), and data (through WAP).

• Voice: Voice is the most popular mechanism to reach out to people from any demographic. A typical voice-based advertising campaign can be run on a pre-call (the message is played when the subscriber places a call, before being connected), Ringback tones or through a pre-recorded message on an outbound dialer. Dr. Vinod Vasudevan, Group CEO, Flytxt said, “As the rural subscriber base is a prime target segment for mobile operators in India, the voice channel is still a preferred communication medium, as rural subscribers are receptive to local vernacular voice messages rather than SMS and other channels. Operators have spent a lot in setting up call centers with this goal in mind.”
• SMS: After voice, SMS is the most popular mode for mobile advertising. A major chunk of VAS revenues come from SMS and especially in India, it is a popular medium for communication.
• USSD: This is perhaps the way ahead for mobile advertising as it lets the advertiser interact with the potential customer in a seamless and cost-effective manner. USSD is commonly used to check account balance through short codes like *123#. Yogesh S Bijlani, Vice President of Sales for Asia Pacific Region, Telenity, explained, “The biggest challenge in mobile advertising is to make people opt into promotional messages. Using USSD, they can select their preferences. USSD works across handsets and opens a browser for the user to interact with. He can select what specific information about the advertiser he wants and there is virtually no limited to the amount of information that can be delivered to him without being charged for it.”
• Data: Data ads are usually delivered just like online ads through mobile Web portals of operators. Many mobile widgets also leverage advertising through WAP services. Although data usage is not very high at the moment, it is expected to increase over time.

Trivedi opined, “Location-based advertising would be the next big thing in the mobile advertising space and this can take personalization to the next level. Since the operators know where you exactly are, they can send you a promotional message from say, a pizza shop as soon as you are in the vicinity.”

“Another way of advertising could be through Bluetooth or infrared. A Bluetooth or an infrared server placed in a mall can send you messages from the shop owners in the mall as soon as you enter the premise,” Trivedi added.

The mobile advantage

When we talk about mobile advertising, the possibilities are limitless. There is tremendous scope for innovation in this space. Rajiv Madhok, Director, One97, said, “Mobile is the most intelligent medium ever. There is a lot of customer information available with the operators like the billing patterns of the customers, the services they have enrolled for (like Ringback tones, GPRS etc). If this information is used with an efficient analytical engine, ads that are relevant to the customer can reach him at the right time and through the right channel (Voice, SMS, USSD or Data).” However, most of the mobile advertising done today, is in the form of push SMS, wherein a subscriber receives unsolicited SMS advertisements that may or may not be of interest to him. Intrusive, unsolicited advertising and marketing messages reaching the customers makes them annoyed and dissatisfied leading to churn and subscribing to the Do Not Disturb (DND) list thereby creating a big opportunity loss for operators and other enterprises in leveraging one of the most potential marketing channels available, which is mobile.

“Most of the time, with mass message broadcasting, what operators could achieve is sending at least 1 or 2 marketing messages per customers on a daily basis, but this does not guarantee any returns and positive response as this is not driven by customer profile or behavior. It is a hit or miss game, which is costly, inefficient and irritating,” opined Dr Vasudevan.

Therefore, as many operators have already realized, the way forward is targeted customer data driven marketing and advertising. Operators are aware of their unique assets, one is the abundance of reliable and real-time customer data available with them and the second asset is their control over different mobile communication channels like SMS, MMS, IVR and WAP. Once they start to find ways to take leverage of both these assets, they will transform themselves to more effective and efficient ‘mobile marketers and advertisers’.

Many studies indicate targeted marketing is expected to increase the response rates by around 50% or more compared to mass message blasting. This is true for both mobile marketing, where operator tries to promote their own products and services through mobile as well as in mobile advertising, where they leverage the different customer touch points to promote third party ads.

Higher response rates for targeted campaigns in effect translate into greater brand awareness, sales and loyalty for mobile marketing and high CPM rates for mobile advertising programs. Targeted marketing and advertising is all about sending the right message or ad to the right customers at the right time and frequency. This will ensure that customers receive ads or messages only when they desire the same and about what they are interested in. Once operators and other agencies can achieve this, mobile marketing and advertising is expected to move into a higher orbit. Neon, the mobile marketing platform from Flytxt, has sophisticated targeting features, based on customer profile data, usage behavior as well as network data. Network data driven location sensitive targeting will also go a long way in promoting proximity marketing, especially taking advantage of wireless technologies like Bluetooth.

According to Sumit Goswami, Head – Marketing (India/ASEAN), Mobile Marketing Group, Nuance India Private Ltd, “Push SMS will co-exist with targeted marketing and advertising for the next two-three years. It is a mass advertisement medium where the marketer is not sure of returns or the accuracy with which he is able to reach his target customer base and it will be used by marketers to reach a wider audience where they are not bothered about specific psychographic traits of potential customers. The Do not call registry directive from TRAI is a major hindrance to the growth of SMS as an advertising medium.”

Kamlesh Bhatia – Principal Research Analyst, Gartner, opined, “Mobile marketing and advertising through telemarketing and mass SMS were intrusive. However, with targeted advertising, advertisers can get to have better interaction with the customer and this would in turn earn higher revenues for both telcos and content providers.”

What’s in it for the user?

While mobile advertising could be a potential mechanism for bolstering the sinking revenues of telcos, it can also bring a lot of benefits for the end consumer. Take for e.g., Blyk, an MVO (mobile virtual network operator) based in the UK, which offers free calling to customers that are willing to subscribe to relevant advertisements. While, the advertisers get to promote their products through this channel, the end user enjoys free talk time worth 15 pounds every month.

For gaming buffs, there is no need to buy mobile games anymore. As there are plenty of games available for the mobile, absolutely free of charge, all thanks to mobile advertising. The games are bundled with some advertisements for which one needs to have a GPRS connection. You are prompted with a few ad banners before you start a game, and you get an option to view or skip them.

“In other scenarios, subscribers are offered free SMS or free talk time if they allow placement of ads in their Ringback tones. Though such models may not be meaningful for a business executive, it may mean a lot to say, a college student, who is always excited to get anything for free,” added Madhok.

“People are interested in Value Added Services, but the cost is often a deterrent. Mobile advertising can enable them to subscribe to these services without having to pay for them,” added Bijlani.

Challenges in the market

According to Dr Vasudevan, “If we need to unlock the potential of mobile channel fully as a marketing and advertising media, the operators need to take a bigger role and start leveraging their unique strengths of having reliable and real-time customer data as well as their ability to control the multiple mobile channels.”

The main issues we see as those which can decelerate the growth of this market are:

• Cultural and personal mindset needs to change in India, especially among the non-youth segments, most of them see mobile only as a talking technology, it needs some effort to convince them that they can do more than talking with this gadget. Mobile banking, mobile payments and now targeted and personalized mobile marketing can also go a long way in achieving this shift in mindset
• Enterprises need to resort to targeted and non-intrusive mobile marketing, mere push techniques will make it irritating for customers; this can kill this golden goose. This is why we see operators need to take up the role of marketers and advertising publishers, they should control what goes to customers at what time and what location, it will be a win-win situation for customers as they will get relevant and desired messages and information, for operators as they gain to promote their products more effectively and also generate new revenue streams through higher CPM rates based revenue sharing agreement with advertisers and for enterprises, who will get high CPM rates for their ads
• However if operators need to move up the value chain and do customer data driven targeted, contextual, permission based mobile marketing and advertising, they need to overcome technical challenges they currently have like data silos, manual processes and open loop marketing, with limited capability in tracking the campaign responses.
• Awareness amongst marketers and advertisers to use mobile as a medium for advertising –better ROI and other tangible benefits are still not clear to many advertisers.

“Advertising is an important tool for most carriers. However, the challenge is to enable advertising for customers without annoying them with too many SMS. Subscribers need to be carefully targeted based on their demographics, preferences etc.,” added Bhatia.

Early days yet

Mobile advertising is still at a nascent stage. Unlike the Internet, where the per click revenue model is present, models need to mature in the mobile space. Some of the popular models currently prevalent in the market are per impression model, volume based model (based on the number of SMS sent), number of times the user waited to listen to an ad in a pre-call.

According to Trivedi, eventually two or three models will mature as the most widely used as the mobile advertising becomes more popular. As far as the revenue split between the content provider and the operator is concerned, there is no standard as yet. However, with content providers focusing on getting the advertisers on board, the revenue split will shift in the favor of the content provider.

Madhok opined, “When we bring the advertiser, we get anywhere from 40-60% of the revenue and when the operator gets the advertiser, we get about 30% of the revenue.”

As the mobile advertising market matures, we will see more revenue models coming in and more innovative service offerings. Although, we do not expect to see this as a threat to the traditional advertising medium, it could well become a popular one, pretty soon. And, as long as the operators are able to make sure that they do not irritate the subscribers with too many messages and spam, mobile advertising can be a win-win for all.

varun.aggarwal@expressindia.com