Homing In | Making a pitch on cellphone

Homing In | Making a pitch on cellphone
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First Published: Sun, Oct 12 2008. 11 01 PM IST

Updated: Sun, Oct 12 2008. 11 01 PM IST
Anantha K., a 28-year-old software engineer, was pleasantly surprised when he received a message on his handset from a travel website offering discount deals, even as he was surfing a similar site on his BlackBerry. The ad Anantha received could be an indication of how mobile advertising companies are trying to target customers in India — tailoring their ads to meet the specific needs of the customer.
With a subscriber base of nearly 300 million users in India, cellphones are potentially a strong medium for reaching out to customers, particularly through targeted messages — though experts say it may be a year or two before this business really takes off. Investors and advertisers are interested but are yet to fully explore the medium. Efforts are on to see that it becomes a viable advertising medium without violating a customer’s privacy through unsolicited messages.
Advertisers haven’t yet opened up to the idea of product campaigns on handsets. “It takes a lot of time, as much as three-six months, to explain the benefits of this medium to advertisers, unlike for, say, television, where they know the reach is huge,” says Naveen Tewari, CEO, mKhoj Solutions Pvt. Ltd. Also, to make it really successful, the medium needs to be seen on a par with television and print media and not as a stand-alone marketing channel.
The challenges haven’t stopped companies from looking at innovative ways to push mobile advertisements. While mobile value-added services provider Mobile2Win India Pvt. Ltd is creating mobile games based on TV ads that can be downloaded, mKhoj Solutions is focusing on Internet mobile advertising — advertising on the mobile platform becomes an extension of surfing on the Internet via the handset. Chennai-based Mobile-Worx Pvt. Ltd, a mobile solutions company, has launched a service called ZestADZ that enables the delivery of highly targeted, location-sensitive, contextually relevant advertisements over the mobile phone.
A 2008 study by media buying agency GroupM put ad expenditure over the mobile phone medium in India in 2007 at Rs45 crore. Mobile advertising firms say bigger brands are more open to leveraging this medium than small or medium companies, with fast moving consumer goods, or FMCG, and financial services companies more receptive. Brands such as Domino’s Pizza, Pizza Hut, Cadbury, ITC, Coca-Cola, HSBC India, ICICI Bank, CitiFinancial, Max New York Life Insurance and Fullerton India are already using the mobile phone to reach more customers.
What attracts advertisers is that unlike television or the print medium, mobile phones provide much more focused, direct and assured access to customers. “India is a great ‘content’ nation. It (mobile phone) is a personal device; it is with you all the time. Also, mobile advertisement is not restricted to Internet and it is as easy as getting an SMS,” says Ratish Nair, chief executive officer, Interactive Avenues, a digital marketing solutions agency. Nair says mobile advertising is a natural extension of print and electronic media ads.
At present, mobile advertising comes in various forms — interactive banners on handset screens using high-speed data services, tickers, ringtone-based promotions, sponsored links on mobile Internet search, polling for market research and SMS.
Also See Modes of Mobile Advertising (Graphic)
According to an August report on mobile advertising in the US, UK and India by US-based mobile entertainment community network company Limbo Inc. and technology data mining specialist GfK Technology, text messaging was the most common advertising format recalled by respondents. When it came to recalling a Web ad, UK users had the highest recall, with 16% of the respondents recalling advertising compared with 8% in the US and 4% in India. Radio ads seem to fare better in India, with nearly 40% recalling advertisements they heard on radio via their mobile phones, compared with 9% in the UK and 3% in the US. The study found that younger males typically viewed mobile Internet advertising the most in these three countries.
“In the US or Europe, customers have better access to WAP (wireless application protocol) advertising. Also, texting is not an issue for them, unlike in India,” says OnMobile Global Ltd’s mobile marketing head Debraj Tripathy. He adds that voice advertising can take off in a big way in India.
Reebok India Co. has taken mKhoj’s help in addressing the sports lifestyle market in India, as part of its parent company’s global rebranding campaign Your Move, which was launched in March. MKhoj suggested building a WAP portal for the campaign with various interactive tools. This targeted mobile advertising solution ensured 450,000 visits to the portal. Of the total visitors, 37.8% downloaded the mobile content, 15% watched videos and at least 12% located the nearest Reebok store.
Your Move was a global campaign and we wanted to grab as many eyeballs as possible. The visual ads on the handset appeal to everyone—literate or illiterate,” says Subhinder Singh Prem, managing director, Reebok India. Calling mobile advertising a medium of the future, Prem says more brands will start considering this an important aspect of their brand-building activity.
Advertising agencies certainly are interested. “Over the last six months, we have more than doubled the employee strength of our digital advertising division as we are seeing an increased demand,” says a senior executive of a Mumbai-based advertising firm, who didn’t want his name, or his firm’s name, to be disclosed.
Investors, too, are keen. “Which company — retail, financial services or even a newspaper — would not like to be just a message away from its customers?” asks Harish Gandhi, executive director, Canaan Partners, a venture capital firm.
In its first investment in India, Inventus Capital Partners, an early stage technology-focused venture capital fund, and Ojas Venture Partners invested $2 million (about Rs9.7 crore) last month in TELiBrahma Convergent Communications Pvt. Ltd, a Bangalore-based mobile solutions company. The companies invested $1 million each.
“The mobile market in India offers exciting investment opportunities. In TELiBrahma, we saw a set of tenacious entrepreneurs addressing a large and fast growing market opportunity,” says Kanwal Rekhi, co-founder, Inventus.
Start-ups in this sector have had their share of failures. MKhoj had to abandon its SMS-based service where users could browse for the best deals in their locality. CEO Tewari says it was extremely difficult to scale up business as they were giving out information on discounts that form only about 10-15% of the organized retail market.
Mobile2Win co-founder Rajiv Hiranandani says keeping spam out will be a challenge; only then would the real advantage of the medium be extended to customers. Also, revenue sharing between the telecom operator, mobile advertising company and platform provider needs to be more transparent. Currently, telecom operators take away the biggest chunk of revenue generated, which is at least 70%, says Hiranandani.
Attempts are on to see what can be done to ensure that customers don’t lose privacy. “You intrude (on) someone’s privacy when you send spam messages. However, permission-based advertisements will find takers as they cater to a client’s profile,” says Tewari.
So, the future for mobile advertising will lie in sending out advertisements that customers have requested. “Mobile users see push advertising as an intrusion and companies cannot sustain the medium with that response,” says TELiBrahma CEO Narasimha Suresh.
The company has introduced an advertising solution based on Bluetooth technology in Bangalore’s shopping hub — Commercial Street, Forum Mall and Total Mall. “This is a pure permission-based mobile advertising offer; the consumers get the best of the deals and the retailers get to use a robust and cost-effective advertising medium,” says Suresh.
Bluetooth advertising solutions allow mobile phone users to interact with an advertising panel or kiosk to receive advertising content associated with a place or product on mobile phones in the vicinity of the display.
However, while getting customers to agree to receiving ads on their handsets may work for a big percentage of users, there will still be a niche group that will not welcome such ads, says Suresh.
Also, as customers generally prefer not to read randomly sent text, they need to be given incentives such as lower tariff for value-added services or coupons that can be exchanged for call charges.
Though India has the second largest mobile phone subscriber base after China, which has 600 million users, the concept of responding to a campaign is yet to catch on here. A customer can respond to a mobile ad by sending an SMS or by following a link on her phone to call a specific number (this is also known as click-to-call). Industry insiders say mobile advertisements will have to be integrated with mobile phone services so customers can interact. The success of mobile advertisements will lie in the value they provide to both customers and brands, says Suresh.
Mobile advertising in the country is expected to get a fillip with the introduction of phones such as Apple Inc’s iPhone along with third generation, or 3G, mobile phone services and high-end gaming on mobile phones. In a 3G environment, the incidence of mobile advertising would be a function of two key aspects—subscribers’ propensity to spend on mobile infotainment (blending information with entertainment) services and proliferation of handsets that can translate these services into rich user experience.
So, 3G subscribers with new generation, high-end phones would be potentially a big target base, says Deepak Kumar, general manager, communications research, IDC (India) Ltd.
IDC estimates are that 2.3 million 3G-enabled handsets were imported in 2007. The research firm says this is partly indicative of the market readiness in the country for 3G and related services. Usage of GPRS-enabled phones, essential for Internet browsing on the cellphone, is also going up, with around 16 million GPRS-enabled phone users in India.
Currently, 1.8% of mobile users in India access the Internet on cellphone, according to a 2008 report by The Nielsen Co. And with mobile Web browsing improving, video and banner ads will dominate the market, say experts. The biggest push will come, say experts, if telecom companies provide Internet access at low rates and standardize regulations. When that happens, the mobile phone’s beep will be music for the ears of advertisers, mobile solutions companies and customers alike.
The customer base makes it a lucrative market
mKhoj Solutions Pvt. Ltd
Launched: 2007
Lead team: Naveen Tewari , Chief executive officer
Amit Gupta, vice-president (business development)
Abhay Singhal, Vice-president (ad sales)
Mohit Saxena, Vice-president (technology)
MKhoj, which calls itself a “mobile advertising marketplace”, offers a mobile advertising platform currently operating across 16 countries. It provides advertisers a targeted way to reach out to consumers directly on cellphones around the globe on the basis of what they are surfing on their handsets.
Naveen Tewari, Chief executive officer. Ashesh Shah / Mint
Advertisers can use the reach and precision of the mobile phone medium to create a strong brand and generate leads. Publishers (the websites) can use mKhoj to get contextual ads for their customers to increase the value of their mobile property.
MKhoj’s interactivity options include call-to-action tools, click-to-call, click-to-link, click-to-lead and click-to-video. The firm offers multiple ad formats to increase brand recall.
Why it chose to operate in this segment: There was never a better time to get into mobile advertisement in India, says chief executive Naveen Tewari, adding that the customer base of mobile phone users makes it a lucrative market. Also, he says more people will start surfing the Internet through handsets in future.
Clients: Reebok India Co., Bookmyshow.com, MoneyControl.com’s Markets on Mobile, which allows a customer to download stock market data.
Growth strategy: MKhoj plans to expand its reach in the overseas market over the next two years. It will work at making its platform more customer responsive so that two people surfing the same website will get to see different ads, in tune with their preferences. Tewari says the company will look at ways to increase targeting capability. MKhoj, which currently partners 400 sites, plans to have collaborations with at least 100,000 sites in two years.
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Two million customers, 300 advertisers in five cities
Gingersoft Media Pvt. Ltd
Launched: 2007
Lead team: Chaitanya Nallan, Chief executive officer
R.K. Menon, Vice-president (marketing)
Gingersoft Media Pvt. Ltd’s mGinger is the first of its kind opt-in permission-based mobile marketing platform in India. It is a service which provides targeted advertisements on mobile phones.
Chaitanya Nallan, Chief executive officer. Hemant Mishra / Mint
The advertisements are aimed at customers who have opted for this service. The consumer base is built through a registration process in which consumers specify their commercial interests, the maximum number of ads they would like to receive in a day, convenient time slots and personal data.
Apart from getting information related to their particular interests, consumers also receive monetary incentives for every ad they receive and for each ad sent to people referred by them, up to two levels of referrals.
Why it chose to operate in this segment: “We started with an urge to solve the issue of spamming,” says chief executive officer Chaitanya Nallan. “However, soon we realized that with permission, it also had a huge business potential. Considering there are 300 million mobile users, it is a huge market. Every handset user is a potential client for us and it has worked well for all — us, our customers as well as the advertisers.”
Clients: CitiFinancial Consumer Finance India Ltd, Max New York Life Insurance Co. Ltd, Fullerton India Credit Co. Ltd. Growth strategy: It currently has two million customers with 300 advertisers in five cities. “With mobile marketing being a highly scalable business, we expect to have five million customers over the next one year with over a thousand advertisers. We would also expand to 25 tier II cities. Also, we would get into more sophisticated advertising like picture and video ads,” says Nallan. The company is also considering regional language services.
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Planning exclusive deals with makers of hit movies
Mobile-Worx Pvt. Ltd
Launched: 2007
Lead team: Asif Ali, Co-founder and chief technology officer
Nat D. Natraj, Chairman and adviser
Terry Uppal, President and chief executive officer
Mobile-Worx is a mobile software solutions provider. Its operating platform — ZestADZ — facilitates advertising with permission from mobile phone users.
Asif Ali, Co-founder and chief technology officer. Sharp Image
The company’s business pitch: Watch a few ads on your mobile and download free ringtones or games.
The ZestADZ platform is also real time analytics enabled. Earlier this year, ZestADZ started selling ads on the Facebook mobile platform, allowing Facebook developers to integrate mobile ads with their Facebook mobile applications. ZestADZ is the first mobile ad platform from India to offer such a service for Indian mobile developers.
It basically targets people who have mobile phones with which one can access the Internet. It charges advertisers based on the number of times subscribers see the ads.
Mobile-Worx has also joined hands with New Delhi-based Tensor Technologies Pvt. Ltd to launch an ad-supported Hindi SMS solution called MeghDoot.
Why it chose to operate in this segment: Mobile-Worx is betting on growth in the country’s mobile phone user base as well as an increase in the number of people accessing the Internet from their mobile phones.
Clients:Refused to divulge.
Growth strategy:It plans to strike exclusive deals with makers of hit movies to generate traffic and attract the attention of advertisers.
“We intend to hit a billion impressions a month in traffic in the next few months,” says chief technology officer Asif Ali.
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It’s the most used medium, so targeting can be sharp
Mobile2Win India Pvt. Ltd
Launched: 1998. The company got into advertising last year.
Lead team: Rajiv Hiranandani, Co-founder, executive director (revenues) and country head
Rajat Jain, Managing director and chief executive officer
Ajit Joshi, Executive director (finance and accounts)
Mobile2Win is a mobile value-added services, or VAS, company that has also entered the mobile advertising space. The company offers users in-game advertisements which are non-intrusive. Last year, it created a mobile game for Domino’s Pizza that was based on the pizza chain’s TV commercial. It also handles SMS traffic for television shows such as Indian Idol.
Why it chose to operate in this segment:
The team had advertising experience, says country head Rajiv Hiranandani.
Rajiv Hiranandani, Co-founder, executive director (revenues) and country head. Ashesh Shah / Mint
Also, with 300 million people using mobile phones, each one becomes a targeted customer. Since the cellphone is the most used medium in India today, the targeting can be sharp, he says. This is not possible on the Net.
Also, with most mobile phone users in the 15-30 age group, browsing the Net via the mobile phone can become really big in the next two to three years.
Clients: Pizza Hut, Allen Solly (a Madura Garments, brand), Lacoste India.
Growth strategy: The company plans to acquire more business partners and tie up with advertising agencies. It also plans to get into more contextual advertising and take up value chains. Currently, it is setting up an ad serving platform for other media inventory.
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Using Bluetooth technology for localized advertising
TELiBrahma Convergent Communications Pvt. Ltd
Launched: 2004
Lead team: Narasimha Suresh, Chief executive officer
Ravi B., Technical director
TELiBrahma is a mobile solutions provider and offers Bluetooth-enabled advertising solutions for cellphones. It does not use GPRS or any network-dependent technology to push mobile advertisements. It uses Bluetooth technology that makes localized advertising easier, particularly in places such as malls, streets and stadia. The only requirement is that customers keep the Bluetooth option on their cellphones switched on.
Narasimha Suresh, Chief executive officer. Hemant Mishra / Mint
Last year, TELiBrahma launched its Bluetooth advertising solution in Bangalore’s shopping hub, Commercial Street. The whole street has been converted into a Bluetooth zone and customers here can avail the best of deals and discounts offered by retail shops at zero cost by switching on the Bluetooth application on their mobile phones.
Why it chose to operate in this segment: Chief executive Narasimha Suresh says the mobile phone as a device has huge potential in India. Also, as Indians are more content-driven, handsets have a bigger role to play here.
The company got interested in mobile advertising as it saw a huge potential for information dispensing — brands could use the mobile channel to make offers to customers. Value addition to both customers and brands will drive the growth of mobile advertising in India, Suresh adds.
Clients:Local players, Nokia India, Coca-Cola, BlackBerry, Maruti Suzuki India Ltd, HSBC Bank, ICICI Bank.
Growth strategy:The company plans to expand its customer base and is deploying its mobile advertising solutions in cricket stadia during the ongoing India-Australia cricket series.
The company also plans to launch a few more mobile phone applications. It currently has 50 brands using its advertising solutions and plans to acquire five to six new customers every month. Besides targeting local markets, TELiBrahma will also look at becoming a national player in two years.
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Personalizing audio ads to fit the caller’s profile
OnMobile Global Ltd
Launched: 2000
Lead team: Arvind Rao, Chairman, chief executive officer and co-founder
Mouli Raman, Chief technology officer and co-founder
Rajesh Moorti, Chief financial officer
Debraj Tripathy, Strategic business unit head — mobile marketing
OnMobile helps clients design a mobile marketing campaign that is personalized, targeted and measurable.
Arvind Rao, Chairman, chief executive officer and co-founder.
The company launched its mobile marketing offering called Ad Ring Back Tones, or Ad RBT, two months back. When a user subscribes to Ad RBT, anyone who calls the subscriber’s number is presented with audio ads that are personalized to fit the caller’s profile.
The platform has a unique “call-to-action” feature that allows users to respond to the advertisement instantly by pressing one key, says mobile marketing head Debraj Tripathy.
Why it chose to operate in this segment: The mobile phone allows one-to-one, direct-to-consumer, personal contact with customers. Tripathy says the customer base available for mobile marketing makes it a viable business idea for them and is also a natural extension for OnMobile, a value-added services provider.
Clients: ITC Ltd,Cadbury India Ltd.
Growth strategy:OnMobile has completed the deployment of RBT on Airtel — covering five states, 20 million subscribers and three million active users—and will now look at acquiring more customers.
“It is difficult to gauge which mode of mobile advertising will take up in the country. For the time being, it will be more of a hit and trial for companies,” says CEO Arvind Rao. “It will take 18 to 24 months for mobile advertisements to really take off in India. It needs support from both advertisers and brands.”
OnMobile plans to target local advertisers such as shopkeepers and restaurants across the country. It estimates that the Ad RBT market could be as much as 20-25% of the advertising market. In the next few months, OnMobile will roll out the platform across Asia and the Asia-Pacific. It is in an advanced stage of discussions with two large operators in Africa.
deepti.c@livemint.com
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First Published: Sun, Oct 12 2008. 11 01 PM IST