Mobile Advertising: Beyond Spam SMS

It is sad that Marshal McLuhan is not there to see the phenomenon of Internet and mobile. Yet, going by his definition, if Internet is a hot medium, mobile is the hottest medium that the world has seen so far. Every user, by definition, is always involved. And it is more personal than any other devices that we know. That is both good and bad news for media marketers. The good news is that there is no wastage. The bad news is that they do not yet know what to do with the medium.

Time and again we have seen in history, that when a new technology arrives, it always starts by doing the same thing that the older technology did a little betteroften on just one aspect. It takes some time before people realize its potential to do different things rather than just doing things differently. When cinema came, people recorded plays to show it at different times and different places. It did remove the constraint of time and place for the viewer but it took years for realizing that even a movie can be shot at different places and at different times.

Mobile is undergoing that change today. So far, advertisers have used the medium to do what they were doing through mailers and print, just at a far cheaper rate and a little better targeted. Today, advertisement on mobile is almost synonymous with spam SMS.

While these traditional forms of mobile advertisements like SMS and banner ads pack our inbox, most of the time they can be very intrusive.

Today, there are a number of bulk SMS that is being sent to customers, says Gawri Shankar, CEO, SinglePoint, a mobile advertising firm, we feel that is actually spamming. At the end of the day, the advertisers are looking for an effective medium which gives them return. In this form, advertisers are sending messages to people who didnt ask for it but it is forced down their throat.

Today, a mobile number in the database is just that: a ten digit number. There is very little information about the user, what he wants, and what he buys. With do not call becoming stricter and consumers getting fed up with such SMS, the realization is dawning that it is not the best way to do mobile advertising.

Therefore,companies are now looking beyond traditional form of mobile advertisements to choose other options such as mobile application display ads, search ads, rich media, video and push notifications; the landscape can be a bit complicated.

Recently, companies like Hindustan Lever and Coca Cola have launch mobile advertising campaigns and have had great success. And it has gone beyond the traditional FMCG marketers. Ford launched a mobile advertising campaign which the company says was very successful. While various innovative forms of mobile advertising are penetrating into the Indian market, perhaps businesses still need to be educated about the merits of developing an opt-in database, and how to capitalize on this data in a consumer friendly manner instead of trying to sell products to off-target audience through obtrusive texts which yields no benefits.

We acknowledge there is a huge scope for mobile advertising in India, but the mobile advertising has not yet started yielding results in India despite various attempts made by the multiple operators and aggregators. Mobile advertising needs focused technology attention and invention added to the fact of customer segmentation and usage pattern analytics, expressed Vishwanath Alluri, chairman and CEO, IMImobile, a provider of technology and solutions to operators and agencies.

After a tough 2009, advertisers are expected to shift from costly print and television to more targeted mobile and digital marketing budgets over the coming months.

Many players feel its essential that advertisers remain updated on their options in the mobile space. The Mobile Proof Presence (MPOP) checkin game, for example, is quite hot. In a relatively short amount of time, most people, with an iPhone at least, know what a checkin is and the most popular checkin platform, Foursquare, is adding 15,000 people per day. Foursquare is chasing two mn users, each opting-in to broadcast the details of their location based interactions with real businesses in the context of their larger trusted social networks. Every consumer facing business with a cash register, from the smallest single door to the largest mega retailer, knows that special offers drive lift. Printed coupon fliers, chalkboard nightly restaurant specials, buy 1 get 1 free days at the supermarket, seasonal clearance sales, and punch card loyalty programs all work. Foursquare takes the incentive programs, coupons, and special offers that retail businesses have used for decades to drive sales, and straps them to a new, modern opt-in engine that feeds the businesses back real-time location parsed ROI metrics.

According to CellStrat Market Research Group, Foursquare apps are already creating good market in the mobile advertising arena and Tweeter, with its phenomenal audience response, is the next big thing in this field. Tweeter is also coming up with location recognition, wherein the triangulation method of mobile will locate your phone, even if you are entering a different country, and send you the location/country specific ads. Using these location recognition applications, companies locate people who visit certain locations frequently and attract them by offering freebies too.
Whether Foursquare, Tweeter or Facebook, the most popular application will generate the highest amount of inventory and that, in turn will attract more dollars which is what obviously the advertisers are aiming at. So if your mobile phone supports these applications, you might just be offered free coffee coupons on your phone and thats an incentive!

The possibilities for ad placements are just as vast in the mobile space as they are on TV and other screens, yet it is cost effective. If a company wants to advertise a blender, an ad could pop up when the user searches for a caf, or users could receive a coupon for use at a caf that uses the blender, or they could receive an SMS to enter a recipe contest and so on. This makes mobile advertising a win-win proposition for all the stakeholders including consumers, brands, and telcos. While customers can avail of some great opportunities, discounts, prizes and freebies, advertisers can be sure that their ads are not missed by the consumer. And just after few minutes of the ad being sent out, the advertisers get to know whether the response has happened and if it has, then what is it that the consumer would like and then present them various offers according to their needs. The advertiser doesnt have to wait for months to see the response. So if one creative is not working well, advertisers can switch to another without wasting time.

Will 3G play a crucial role?

3G and 3.5G telecommunication services are among the most hyped and talked about in the field of mobile telecommunications using which a mobile phone user can experience seamless data transfer of up to 2-8 Mbps. The higher bit rate capabilities of these technologies will bring about the development of bandwidth intensive applications. Findings suggest that there are at least 20 mn 3G-enabled phones in India, which means that India already has five times Singapores population as a potential 3G market. India is tipped to have a 3G subscriber base of over 100 mn by 2012-13. Therefore, with 3G, rich media advertising like video ads will become a viable proposition and gain popularity among a critical mass of mobile users. Depending on the operators existing business model, and the chosen mobile advertisement model, multi-channel capabilities could extend to multiple networks.

Moreover, most ad delivery opportunities that mobile provides, even the traditional mobile Internet based advertisements using GPRS, would be enhanced by 3G networks and will be more acceptable when viewed using high speed 3G connections. 3G is expected to allow users to go beyond the traditional mobile advertising modes like SMS, WAP, and USSD. Nevertheless, the success of mobile advertising market doesnt depend on 3G alone. 3G will play a significant role in boosting mobile advertisement; however, at the end of the day, the advertising is not going to be dependent on devices or 3G networks, says Gawri Shankar, CEO, SinglePoint. Theyll help the customer have rich-media experiences, but ultimately advertisers will have to have the reach. These devices are all necessary, but what is more important is the target audience with whom the advertisers can finally communicate one-to-one.

While the global mobile marketing industry is expected to grow to $24 bn by 2013, India currently stands at around $25 mn and is growing rapidly. Brands like Incredible India, Kaya Skin Clinic, Vandana Luthra, and many recognized e-Learning companies are also looking beyond the Indian market. The target audience is the premium clientele who access Internet on high-end mobile phones. So floating banner ads on mobile Internet has proved effective for these brands and has helped then to reach premium global customers.

While conversational advertising might represent less than 0.5% of total mobile marketing messaging revenues in 2010, it is expected to contribute a fraction under 40% by 2015. India (along with China) will be one of the mobile superpowers and will have about 686.6 mn mobile subscriptions by the end of 2010 which is expected to reach the mark of 1 bn in 2013. To date, the mobile operators are focused on subscriber acquisition, making incremental revenue streams such as mobile advertising, something of a sideline for the time being. But interest in mobile advertising in India is increasing. The market is expected to grow from $4 mn in 2009 to $20 mn by the end of 2010, said Nick Lane, chief strategy analyst, mobileSQUARED.

Nevertheless, there are challenges too. The primary challenge can be in the deployment of mobile value added services. India is a price sensitive market; hence determining the right pricing for the services will be extremely important. The other challenge for the operators may be to collaborate effectively with the ecosystem of content developers, content creators and IT vendors to deliver an immersive experience to consumers. This will be especially important for providing video services since video is complex, with many networks, formats, and standards, working together to produce high quality visual data. Further, networks need to be ready for distributing content efficiently. Since broadband in India is going to be mostly mobility driven, we feel that the networks have to be ready for IPv6.

While companies are grappling with how to tackle the exciting new world of Mobile Media, a majority of the survey respondents agreed that Mobile is the next big thing. When asked when would Mobile Media become a mass market, 53% of the survey respondents said that this would be the case in 1-3 years. 9% thought that it is already a mass market. This indicates a massive upside in production and consumption of Mobile Media over next 1-5 years. This will be driven by massive mobile adoption every month and recent 3G launches by the likes of BSNL and other operators later post the 3G auction.

With more than 650 mn mobile devices in India and with the introduction and use of various other high-tech tablets and mobile phones with wireless connectivity and rich features, consumers will possibly not keep reckoning mobile advertisements as spams forever. And if businesses still do not concentrate on Internet based mobile advertisements as the advertising medium, it might just prove to be a wrong business strategy after all.

Drishti D Manoah
drishtim@cybermedia.co.in