The Hindu Business Line : Going the M-ad way

Mobiles becoming 24/7 companions has opened up opportunities to design campaigns aimed at specific sets of users. And the benefits are evident for the stakeholders — visibility at cost-effective rates for advertisers, additional revenue st ream for mobile operators and personalised, non-intrusive information for customers.

Simply put, Mobile advertising is communicating brand value through the mobile. It enables enterprises to overcome a key hurdle — inability to reach well-defined target audiences. The ever expanding telecom subscriber base is the basic driver for M-advertising in the country, says Harish Gandhi, Head, Value Added Services of Bharti Airtel, which recently launched SMS 2, a messaging, content and advertising application.

M-advertising gives marketers direct access to the youth of the country, the most extensive users of the mobile phone, according to Naveen Tewari, CEO, mkhoj. mkhoj has created a deal platform enabling customers to search for the best deals and discounts on a particular product in one’s locality.

4 strategic spheres

According to Mahesh Prasad, President, applications, solutions and content group, Reliance Communications, the mobile marketing ecosystem comprises four interconnecting strategic spheres. They are: product and services (brands, content owners and marketing agencies), applications (discrete application providers and mobile ASPs), connection (aggregators and wireless operators), and media and retail (media properties, ‘brick ’n’ mortar’ and virtual retail stores).

M-advertising campaigns include: banner and contextual advertising on mobile Internet or WAP, advergaming (using video games to advertise a product, organisation or viewpoint), CRBT-brand tune association (where CRBT is caller ring back tone), lead generation zones, polling, contests, mobile video, MMS (multimedia services), etc.

For that personal touch

The mobile phone can offer advertisers a level of immediacy, intimacy and personalisation that cannot be matched by other mediums. “Being a personal device, the mobile phone offers emotional appeal, context and time sensitivity. Improvement in the quality of handsets and network infrastructure that enable delivery of rich media advertisements to users’ handsets at a lower cost will give the required impetus to this industry,” says Manoj Dawane, CEO of Mauj Telecom, which promotes fropper.com and shaadi.com on its WAP portal.

The mobile medium enables to ascertain spending patterns and personalise advertising. No wonder that content companies such as Cricinfo have found a click rate of 3-3.5 per cent on their mobile WAP portal as against 1.5 or 2 per cent on the Internet. Says Anil Nair, head, Wireless Media, Cricinfo, which recently tied up with US-based mobile advertising network AdMob to draw advertisers onto its WAP site (wap.cricinfo.com), “By the end of the year, we expect 10-15 per cent of global revenues from our mobile business to be driven by m-advertising.” (Click through rates measure what percentage of people clicked on the ad to arrive at the destination site)

Threat to Net?

Globally, mobile advertising is emerging as the biggest competition for Internet advertising and it may even jeopardise the latter, according to a study by analysis firm Thomas Weisel International. Though it is too early to say, indications suggest that this might be true for India as well. This is because mobile phone users outnumber other digital channels and the number is expected to reach up to 500 million by 2010, says Suresh Narasimha, CEO of Bangalore-based Telibrahma Convergent Communications, which offers an SMS search product called Genie to search for local information. Internet penetration in India cannot reach the levels of mobile penetration in the next five-ten years, according to Tewari of mkhoj. Internet search behemoth Google too has decided to venture into this space by selecting India as one of the 13 countries to open its AdSense program (which lets companies place search ads on their mobile WAP) to mobile content providers.

Even though the Indian m-advertising marketplace is at a nascent stage, by estimates it could border around Rs 50 crore, believes Prasad of Reliance. Presently miniscule in size, it has the potential to grow at 200 per cent a year. The availability of high-end handsets supporting GPRS will help mobile advertising to grow considerably in the coming years. Currently, there are 15 million GPRS-enabled handsets in India; even if it grows at 25 per cent every year, WAP advertising will see a spurt.

Bullish on scene

No wonder the industry sees big things ahead. Research firm Strategy Analytics is forecasting that advertisers will spend $1.4 billion globally on mobile media this year. “The global M-advertising industry is expected to reach $11 billion in 2009 and India should account for more than 1 per cent of this overall value chain,” avers Narasimha of Telibrahma. With advances in networks, advertising capabilities and growth in advertising inventory, the outlook for mobile advertising spend has significantly advanced in the past 12 months, according to Prasad of Reliance. Some global brands, such as Pepsi, are talking about up to 5 per cent advertising budget being allocated to this new medium. CBS, Coca-Cola, Cadbury, Suzuki, ICICI, HDFC and Castrol are some of the brands active in this space.

“M-advertising is poised to take off in the next six months or so and within the next two years it will become a full-fledged industry. In India, national brands will lead the initiative with regional brands following suit,” says Gandhi of Airtel.

Since this is a medium that is still in its infancy, there is no single revenue generation model. There are several strategies for monetisation, which include brand sponsorship (taken out of advertising budget), premium SMS (Consumers paying for the service) and transaction-based monetisation (pay per transaction/click/view).

Nitish Mittersain, CEO, Nazara Technologies, says corporates spend on branding/lead generation as they would on other mediums via banner advertising, SMS promotions, contests, etc. On Reliance Web World, advertisers pay on a CPM (cost per impression) basis for banner ads and on CPL (cost per click) basis for brand zones. For mkhoj, advertisers pay on a per impression basis on SMS and on a per click basis on WAP, says Tewari. “There is a school of thought that believes that the market will be free in the next five years, wherein all downloaded stuff will be subsidised through advertising,” says Dawane of Mauj Telecom.

Mauj, which currently does advertising only on its WAP portal, will be rapidly expanding into SMS-based advertising first and eventually into voice, says Dawane. Agrees Nair of Cricinfo, who believes that the advertising-subsidised model will overtake the consumer-paid model for mobile entertainment in the next five years.

Target ‘em

“While there is a real opportunity and value for brands, the true potential of mobile advertising will unfold when advertisers deliver time-sensitive ads based on the context of targeted consumers,” says Neeraj Roy, CEO, Hungama Mobile. Hungama has formed a partnership with Amobee Media Systems, a provider of ad-funded mobile content and communication, to bring mobile advertising solutions and ad-funded mobile entertainment content to the South-Asian market.

Roy of Hungama is further of the view that the biggest challenge in mobile advertising is preventing unsolicited advertising or spam, which has the potential to kill the opportunity.

“Advertising has to be contextual as the potential in ‘push’ marketing is fairly limited and is largely viewed as spam. Thus there is a need to get into ‘permission’ marketing and ‘pull’ marketing to deliver value to marketers,” avers Tewari of mkhoj.

Building the infrastructure

The big question is: do we have the neccesary infrastructure and ecosystem in place? For SMS-based or operator portal-based advertising, there exists a well-established eco-system, according to Narasimha of Telibrahma. In areas such as bluetooth and search, advertising is still blooming and the ecosystem is being built.

M-advertising is evolving as a unique and unknown medium is bringing together carriers, ad agencies, publishers, mobile ad technology companies and brands.

“There is limited corporate knowledge of this medium, so it will take a while for all the stakeholders to get a better understanding of the opportunity,” Mittersain of Nazara says. Improved relationships between technologists, advertisers and operators will help bridge this gap, concludes Gandhi of Airtel.

adith@thehindu.co.in

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Going the M-ad way