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Telcos tout sharper user targeting to popularize mobile advertising

Telcos tout sharper user targeting to popularize mobile advertising
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First Published: Sat, Dec 22 2007. 12 17 AM IST

Updated: Sat, Dec 22 2007. 12 17 AM IST
Indian mobile phone firms, who are fighting to lift average billing among customers, plan to hawk advertisements on data services they offer customers and expect about 2.5% of their revenues to come from this new offering in the next two years.
Cellular service providers consider mobile advertising different from telemarketing and regular text messages sent for promotions.
Mobile advertising consists of opportunities for advertisers, such as interactive banners on screens of handsets using high-speed data services, tickers, ringtone-based promotions, sponsored links on mobile Internet search and polling for market research.
According to Reliance Communications Ltd, or RCom, India’s second largest wireless service provider with more than 33 million customers at the end of October, mobile advertising is “worth about a few tens of crores” now, but “it could very quickly scale up to a few hundred crores”.
“Evangelism is catching up; brand managers all over are looking at it (mobile advertising) as one of the extensions,” said Mahesh Prasad, RCom’s president for applications, solutions and content group. “(Between) 10% and 15% of value-added services revenue is definitely possible (from mobile advertising), which is 2-2.5% (of total revenue), in a couple of years,” he added.
RCom reported Rs8,882 crore as consolidated revenues for the six months ended September, recording a 31% growth over the same period of the previous year.
Mobile advertising is distinct from other advertising opportunities as the subscriber’s profile, spending patterns and other demographic details are known, enabling better targeting of the ads. Besides, a mobile phone is always with the subscriber ensuring a higher potential to grab the attention of the customer. It is this potential of a high level of targeting that cellular service providers plan to encash.
Mobile service providers have begun work to overcome issues such as small screen-size to be able to offer advertising on a larger base of subscribers. “In three months, it (mobile advertising) will be available on all devices and reach all customers,” said Pankaj Sethi, president of value -added services (VAS) of the country’s fifth largest mobile service provider Tata Teleservices Ltd (TTSL). “Currently, it reaches 3.5 million subscribers” of the firm’s nearly 21 million subscribers in October.
TTSL said it has already provided mobile advertising to 25 clients in the finance, consumer goods, automobiles and tourism industries, and is looking for a larger clientele to offer these services. The privately-held company does not provide revenue details.
According to the Telecom Regulatory Authority of India, there are more than 38 million mobile subscribers in the country who access the Internet through handsets. And this number is growing rapidly as service providers are bringing mobile Internet service on low-cost cellular handsets.
With this in mind, TTSL has started offering mobile Internet access on handsets costing as low as Rs2,000 in November, from the bundling it did with Rs5,500 handsets earlier. It plans to increase the base of its mobile Internet subscribers as it can earn revenues by providing sponsored links every time a customer surfs the Internet and triggers a search.
The company estimates Internet advertising in India is currently at Rs350 crore, and expects its mobile Internet services will help enhance its advertising revenue. VAS currently contributes 9.4% to the firm’s revenues and TTSL wants to raise this to 15% within 18 months. TTSL declined to provide details on how much of this revenue would be driven by mobile advertising.
Bharti Airtel Ltd, India’s largest mobile service provider with nearly 53 million customers, plans to tie up with leading Internet portals for sharing advertising revenue when Airtel’s subscribers visit those websites through mobile Internet.
“We have an exclusive tie-up with Google, Inc. in India to share advertising revenue every time our subscribers are exposed to their advertisement,” said a company spokesperson, who did not give details of revenues it generates from that association and how many such tie-ups it expects to conclude with other websites.
A Bharti Airtel executive said 35-40% of Airtel customers have handsets that are enabled with GPRS (general packet radio service, a wireless technology supporting high-speed data); the executive requested anonymity. The company reported Rs12,198 crore as consolidated revenues for the six months ended September, registering a 49.7% growth over the corresponding period of the previous year.
Vodafone Essar Ltd, the country’s third largest mobile service provider, declined to comment on its mobile advertising plans.
For the first time, said an advertising industry executive, financial sector firms have started setting aside a portion of their ad budgets for mobile advertising. Said Prasanth Mohanachandran, executive director (digital services), Ogilvy & Mather Worldwide Inc., “We are increasing our employee strength for digital advertising three times and expecting four times growth in our mobile advertising business next year.”
Still, it may take more than two years for overall mobile advertising to pick up, said an expert. “Mobile advertising is still evolving... It will take anywhere from three to five years to be available on all phones,” said Anshul Gupta, principal research analyst at technology research firm Gartner India Research & Advisory Services Pvt. Ltd.
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First Published: Sat, Dec 22 2007. 12 17 AM IST
More Topics: Mobile | Advertising | Reliance | TTSL | Bharti Airtel |