The Third Screen

There was a time when not everyone could afford a mobile phone, and it was
difficult to image that a mobile phone could have a camera. Times have changed
drastically, and today, mobile phones are next only to roti, kapda and makan. We
have already crossed the 250-mn mark in the mobile subscriber base, and the base
is expanding with every passing day.

The mobile phones of today have great features like WAP, Bluetooth, MP3,
radio, video and sound recording, etc. They are no more a showpiece, rather,
they have become a necessity.

Besides people in cities and metros, people in rural areas have started
purchasing mobiles for various purposes; farmers, too, have mobile phones these
days. Therefore, there is immense opportunity for companies to connect to their
target consumer through various modes of mobile marketing.

M for Mobile Marketing

Simply put mobile marketing means marketing a product, service, or a brand
on a mobile phone.

Though packed with a lot of features, the most important feature of a mobile
phone is the SMS. SMS is also a very active mode of marketing for various
special offers, ringtones, brands, and products. Nowadays, mobile phones are
even equipped with video messaging service, often known as multimedia messaging
service or MMS. With MMS, a mobile user can send text, picture, audio, video and
a combination of these.

Besides marketing through SMS and MMS, the two other significant ways of
mobile marketing are through Bluetooth and mobile Web.

India, China Rule

With a population of over a billion, and a 250-mn-plus mobile subscriber
base, India provides immense opportunities for companies to venture into mobile
content. Many startups and individual entrepreneurs are venturing into this
field, and many entrepreneurs are even venturing into offering full-time mobile
marketing solutions to companies across the world.

According to the third annual Apac Mobile Attitude and Usage Study by the
Mobile Marketing Association, India and China are rated as the most attractive
markets in terms of mobile marketing solutions. Around 50% of the Apac mobile
users were found to be moderately interested in mobile marketing solutions and
only 13% indicated least interest.

Web search giants such as Google have big plans to come out with mobile
operating systems with specific features that help them connect the average
mobile user to many Internet advertising platforms instantly. In 2007, Yahoo!
also rolled out its search facilities for the BSNL users of Mobile Web
marketing, and this trend is gaining momentum.

Websites such as mGinger and Sms2India are coming up fast on the Internet.
These websites specifically pay users to receive SMSes on their mobile phones
after taking their permission. Unfortunately, these websites are struggling to
convince advertisers about the potential they hold to make substantial revenues.
However, these websites can still make strategies that would enable them to make
their business models successful and convincing.

Bluetooth marketing has become a new mobile marketing trend, gaining success
in India. The mobile advertisement market is still in a nascent stage, and a lot
needs to be done for it to reach its true potential. Though mobile marketing
helps brands connect quickly to the targeted consumer base, a major problem on
its way to success is the existing National DND (do-not-call) Registry, which
gives the consumer the option of not receiving promotional SMSes or calls. Most
people find promotional SMSes and calls irritating, and hence a large number of
mobile subscribers opt for DND. Companies, therefore, will have to get
innovative to tap the potential of mobile marketing.

Picking Up Steam?

Mobile advertising is going to be the next big thing in the Indian
advertising industry. Though the mobile advertising market worldwide is pegged
at $1 bn, this market is finding it hard to grow in India.

IDC believes that with more than 2 bn mobile phone users in the world, mobile
advertising offers the best way to advertisers to reach a large audience on an
individual basis.

At present, the mobile advertising market in India stands at Rs 25-30 crore,
and is set to grow to Rs 100-120 crore by 2010. Advertisers are aware of the
third screen or the mobile phones. For the last six months, the industry is
adding more than 8 mn subscribers. Advertisers have started to realize that this
medium, if tapped properly, could be a great means for them to substantially
increase their reach. Internet advertising, on the other hand, contributes
around 1.8% of the country's total advertising spend.

“Understanding user behavior, capturing the right customer at the right time and understanding the social-economic status of the user hold the key to the success of this kind of marketing” Rajiv Madhok, CEO, Oorja	“Advertisers would not find a better and bigger platform than the mobile medium to reach the masses” Vijay Shekhar Sharma, CEO, One97

Personalized advertisement is a key feature of mobile advertising-depending
on the monthly bill of a mobile user, advertisers would send them the right
content ads. Online mobile advertising also includes broadcast SMS, brand
jingles as caller tunes, music, video and games download.

The mobile music industry is picking up steam in India. In the first three
months of 2008, Indian consumers purchased more music on mobiles than from any
other source. Vijay Sharma, CEO, One97 Communications, a leading VAS company,
says, “Advertisers would not find a better and bigger platform than the mobile
medium to reach to the masses. That too with very little cost.”

Today, the mobile phone has become very cheap and is capable of data
transfer; it is compatible and easy to carry. GPRS rates will also see a decline
in the near future, and the purchasing power of people has increased.

The Indian economy is booming, and cell phones have become more of a
necessity than a fashion statement. Easy accessible services of the Internet and
services like Word, PowerPoint, and Excel on cell phones are proving to be very
useful. This is attracting more advertisers into the field of mobile
advertising.

Business Models

In India, companies like mGinger, mGarlic, Sms2India, SMSGupShup, YouMint,
160by2, and Way2SMS have been trying their luck for quite sometime without much
success. These companies provide SMS advertising service in which you get ads of
only those products that you are interested in buying. You can also earn money
by referring it to your friends and family. Though this model claims that the
subscribers can earn a good amount of money, the catch is that it depends on the
number of SMSes a user gets per day.

“It is because operators and advertisers have yet to understand the user,”
says Rajiv Madhok, CEO, Oorja, another company in the mobile advertising space.
He says the whole model has to be redesigned. Madhok believes that only monetary
benefit, mere Rs 0.2 per SMS, is not going to bear any fruit. “Understanding
user behavior, capturing the right customer at the right time and understanding
the social-economic status of the user hold the key to the success of this kind
of marketing,” he adds.

Way2SMS CEO VV Raju has a slightly different opinion on this. He says,
“Advertisers are ready to invest in this new medium but they need to be educated
regarding the model.” He also explains: “Look at the total subscription number
of newspapers. It's around 30 crore, nearly the same as the number of mobile
users in India. The newspaper advertisement market is around Rs 300 crore
whereas the mobile advertisement market is only around Rs 25-30 crore.” So, a
lot needs to be done for creating awareness about this experimental model among
advertisers. “Now we are creating awareness among advertisers about this,” he
adds.

Apart from the text-based advertising model, there is another model that
companies are trying: voice-based advertisement. Voice-based advertising
involves playing a short and crisp advertisement, telling about products and
services, before the call is placed to the number that the subscriber to this
service has dialed. Also, the subscriber would have the choice of listening to
the ad or discarding it. In return, the subscriber is entitled to earn some
money or some other benefit.

“It's a win-win situation for telecom service providers, advertisers, and
subscribers,” says R Ayyappan, CEO, Airvoice Infocomm India, the company that is
using this model. “As the subscription is at the user's will, as this model is
non-intrusive,” he adds. But Raju of Way2SMS is apprehensive about this model as
he says it is operator dependent. “You need to rope in operators to run
advertisements of that particular operator, hence catering to the masses would
be a difficult proposition,” he says.

Another model being tested by advertisers is Bluetooth advertising. The
Bluetooth model is more suitable for shopping malls where buyers would get
various promotional ads related to the merchandisers in that mall. One major ad
placements for Bluetooth advertising is at the point of sale (PoS). For example,
if you are at the Barista Coffee Shop paying the bill, you might get an
advertisement saying there is a discount of 50% at the Reebok showroom near
Barista, which, advertisers feel, might attract the prospective buyer.

“ARPUs are going down and unless operators come up with some value added
services, maintaining bottom line would be a difficult affair for the operator,”
says Raju of Way2SMS. “And mobile advertising could be one of them,” he
suggests. Madhok says, “The size of mobile advertising is miniscule, but it has
the potential to grow at 200% a year, giving operators a new of source revenue.
With the average revenue per user (ARPU) falling constantly, it could be a
saving grace for operators.”

Adds Rajiv Hiranandani of Mobile2Win: “Though Bluetooth existed for quite
sometime, it was only used for transferring data for individual usage. Now,
companies are setting up dongles (servers) that beam the data across a shopping
complex or a mall enabling commercial use of the technology.”

Though the number of Bluetooth enabled devices has increased, what's really
interesting is that this is a sort of “if...only” advertising model, ie, the
entire viability of this model relies on whether consumers have kept Bluetooth
switched on. Given the fact that most users aren't tech savvy to even understand
the usage of Bluetooth, it's a huge challenge for advertisers. At the same time,
opportunities are immense, so is the possibility of spam content and virus
attacks.

Long Run Issues

Much has been written about permission-based advertising on the mobile by
mGinger, 160by2, etc that have used the multi-level marketing model to garner
subscribers. It's supposed to be a workaround for the do-not-call, that's going
to come into effect. While the word is that signups are healthy, there have
hardly been any payouts to users. There are doubts around the tracking
mechanism-how could one tell whether a user has actually accessed an SMS? This
needs to be addressed.

A senior executive from one of the operators about their take on these
services, apparently said, that the only money an operator makes is a share of
the sign-up money which ranges from Re 1 to Rs 3 when a user signs up for this
kind of service. The operator's logic is simple: 'If you want to use our pipe
and you're making money off advertisers, we need a cut of that advertising
money'.

It is too early to say whether people would accept mobile advertising as any
other means of advertising because mobiles are a very personal device on which
many people may not be comfortable sharing their personal space. In FY '07, 59
bn text-based SMSes were exchanged and the number is expected to increase to 180
bn by 2010. Though it can prove to be a fine source of income, in the long run,
it can seem to be irritating. Mobile advertisers should come out with new
innovative ideas, which will be more comfortable with audiences. Reaching to 500
mn potential customers with comparatively less expense on their advertisement
budget, advertisers would not hesitate to experiment on this third screen-the
mobile.

Gyana Ranjan Swain

gyanas@cybermedia.co.in