Growth in the number of mobile users has given birth to an opportunity to advertisers and marketers for targeting this segment. Mobile has gradually become an effective and powerful tool for reaching desired market segments in developed markets. Mobile advertising industry in India, however, is at a nascent stage, with operators still hesitant to venture all out in the segment.

Some reports suggest that India will have close to 300 mn mobile users by 2010. This portrays the future of mobile usage in India. Currently, 60 mn consumers in India are already using Value Added Services (VAS), and this is expected to grow about 50-60% every year. Thus, it is evident that the introduction of mobile ads will affect this growing number. Reports also suggest that current mobile ads make far higher revenues than the online advertisement.

But, the reality is far from it. While in the US, companies have started looking at exploring mobile advertising, India, even with a high mobile penetration rate, is lagging behind. "Mobile advertising industry in India is currently extremely nascent. It is still early days for the industry. Hence, even though Hutch does offer mobile advertising to its Indian subscribers, it is in a specific limited scope," says a Hutch spokesperson.

Mobile Ad Exchange
All this is, however, set to change, with Indian cellular operators (the GSM ones) working on a plan to establish a common mobile advertising exchange in India that will allow companies to advertise on mobile phones. Even though companies like Airvoice Infocom are already testing the waters, as they plan to reward those willing to listen to advertisements before the call is connected, operators like Hutch do not seem to be much excited about this new medium.

The exchange will provide profiles of cell phone subscribers across service providers. This common platform helps companies to find out customers with ARPUs of over Rs 500 and target them. Operators are exploring means to reward subscribers to listen to advertisements; one such mean might be offering listeners lower tariffs or giving extra talk time, among other means.

A key requirement of the mobile advertising is standardization, ie there should be a code of conduct for the industry, and common formats for mobile ads. This forum will be expected to address this issue.

"The challenges of mobile advertising are typical of any new media when it arrives. When FM radio arrived a few years ago, it faced certain challenges, because it was an entirely new medium. Today, mobile advertising faces similar challenges, as it is in its emerging phase," says the spokesperson. Also, in text-based advertising, sending ads at a particular time to right customers with broadcasting time slots can make problems for operators. Various mobile ad formats from different advertisers create incompatibility in distribution. Therefore, standardization can be a problem. Sivakumar of Airvoice Infocom, however, differs from Hutch spokesperson. He says, "Such a common platform will help service providers to share profiles of customers, target the right category people with apt ads, and also help in targeting at customers according to their ARPUs."

Most of the operators agree that it is quite early to predict whether the proposed Mobile Advertising Exchange will be a success or not. However, the proposal to set up a Mobile Advertising Exchange is a step in the right direction.

Stuti Das
stutid@cybermedia.co.in

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