Firms test the mobile’s future as ad platform6 min read . Updated: 03 May 2012, 08:22 PM IST
Firms test the mobile’s future as ad platform
New Delhi: A couple of months ago, more than 500,000 women received multimedia messages on their mobile phones of actor Katrina Kaif vouching for the efficiency of a hair-removal cream. The company that put out the ad, Reckitt Benckiser India Ltd, would have spent a lot more to reach as many people at random—and not necessarily a specific demographic—on the Internet.
Encouraged by the response to its first mobile ad, Reckitt is planning a campaign to promote its flagship brand Dettol through an ad film designed for mobile screens. Hindustan Unilever Ltd (HUL), Dabur India Ltd, Kraft Foods India and many other companies selling anything from food supplements to deodorants are evolving ad strategies around mobile phone formats—voice, text or multimedia messages, mobile Internet and applications—as the viability of the platform becomes clearer.
“The distribution reach of this medium is unparalleled," said Atul Satija, managing director and vice-president, Asia-Pacific, InMobi, a mobile advertising agency. “It offers a creative canvas similar to that of television and has the added benefit of immediate interactivity with the consumers."
The interactivity, and the flexibility of the platform, is the key. Four months ago, HUL, India’s largest consumer goods company, launched a voice-based mobile phone campaign for its detergent brand Wheel aimed mainly at buyers in rural India. The promotion was targeted at listeners of All India Radio, the state broadcaster with a wide rural and small town reach, who were asked to call a specified number and hang up. They would then get an auto-generated call that played a recording of a humorous dialogue between a couple highlighting lighter, romantic moments in their life.
The test pilot had eight so-called interactive voice responses (IVRs), or eight different recordings to play back to callers. HUL registered 320,000 calls during the four-week pilot from 28,000 unique callers, or potential buyers, said Abhiroop C., head of media services at HUL. It increased the number of IVRs to 30?and?at the end of three months registered five million calls from 770,000 unique callers.
Catching up with the Net
The growth of mobile advertising has been much faster than that on the Internet, said Dippak Khurana, chief executive at Vserv.mobi, a mobile ad network that serves ads through mobile applications and mobile websites. “The Internet took 16 years to reach 100 million users," he said. “In half the time, mobile advertising has reached the user base of the Internet." Khurana, like many others, believes the mobile phone will be the second largest advertising medium after television because of its reach.
Neeraj Roy, managing director and chief executive at Hungama Digital Media Entertainment Pvt. Ltd, believes the mobile phone will do better than the Internet as an ad platform as it is easier to use and provides connectivity on the go. “Growth drivers for mobile advertising are the basic growth in mobile and Net-connected devices, the advent of enhanced and enriched application ecosystem and consumption of different types of content by users," said Roy. Hungama is a digital entertainment and marketing agency that has worked with brands like Pepsi, Tata Sky and Bacardi in mobile advertising.
Companies declined to share their mobile advertising budgets, but market numbers reveal the platform’s expansion. The share of mobile ads grew nearly 17% in the previous financial year to ₹ 105 crore. The latest Digital Advertising Report jointly published by IAMAI and the Indian Market Research Bureau predicts mobile advertising will rise to ₹ 144 crore by the end of 2013.
“Earlier, people used to laugh off Internet advertising saying it is minuscule. However, now it is a ₹ 1,500 crore market growing at 15% per annum," said Khurana. His prediction is that mobile advertising will grow at 125-130% in the next three years.
A media buyer who declined to be named for this story said consumer goods, telecom and auto brands spend 7-10% of their total advertising budgets on digital advertising and one-third of that is reserved for mobile ads. Firms spend between ₹ 2.5 lakh and ₹ 70 lakh on mobile ad campaigns, depending on the nature of the campaign and the size of the brand, said Satija of InMobi.
The Reckitt Benckiser campaign for Veet hair-removal cream was sent exclusively to Aircel Ltd’s women subscribers. Blyk Media India Pvt. Ltd, which worked on the campaign, said the multimedia messages promoting the brand were not spam as the subscribers had opted to receive ad messages.
Sunil Sampath, a 23-year-old analyst with financial consultancy Grant Thornton, said he does not like receiving calls and ad messages on his mobile phone as they are often “random and irrelevant". But interestingly, he doesn’t mind updates from his favourite brands such as Levi’s or Marks and Spencer as he finds them useful.
Subscribers who do not want to receive ads on their phones always have the option of registering on the National Do Not Disturb registry, meant to prevent spam calls and messages.
Bharti Airtel Ltd, India’s largest telecom service provider, considers mobile advertising a huge asset as it allows targeted campaigns.
As part of the mobile campaign it launched for Life OK, Star India Pvt. Ltd’s new Hindi channel, pre-paid subscribers of Airtel in Hindi-speaking states received “end-of-call" notifications stating, “Don’t forget to watch Life OK at 8pm tonight." End-of-call notifications are messages all pre-paid subscribers get after making a call or sending messages. The campaign, conducted three hours before the launch of Life OK on 18 December, improved the channel’s ratings, said Mohit Beotra, head of emerging business at Bharti Airtel.
The use of the vernacular plays a role. “When we change or modify content with a vernacular angle, for instance, if we say, “asli" instead of “real" (in Hindi-speaking regions), the response rate of the campaign shoots up from 6% to 35% in parts of Maharashtra, Bihar and the North-East," said Shubhodip Pal, country manager at Blyk, a UK-based mobile media?firm?that has worked with 30 brands in India including Cadbury and Knorr.
India’s hinterland offers a significant audience for mobile ads that’s put at 312.62 million cellphone users, according to January data released by the Telecom Regulatory Authority of India.
“Penetration of mobile is higher than conventional media in most rural markets. With the evolution of the mobile device in rural India, from a simple communication device to a complex one which offers entertainment, banking and information, the opportunities are endless for any marketer," said Abhiroop of HUL, which earns a sizeable portion of its revenue from India’s villages and small towns.
The mushrooming firms
To cater to the growing demand for mobile advertising, a variety of specialized firms are coming up—such as digital media and content developers and application developers catering to mobile ads. “Mushrooming of these agencies in the market has just started. It’s still early days, but the first phase has started," said Roy of Hungama Digital, which began its life as an online promotions agency in 1999.
Blyk entered India about one-and-a-half years ago. “Mobile advertising is young. What you see is firms taking first steps into this medium to learn, experiment and see the kind of impact they can create towards their consumers," said Eric Kip, global chief executive of Blyk Ltd.
The future of mobile advertising will be determined by the growth of smartphones and mobile Internet in India. More than 10 million smartphones were sold between January and November 2011, according to CyberMedia Research India. Smartphones accounts for 6% of the total mobile handset market.
“The true value of mobile advertising is not possible through an SMS or an MMS. Rich media advertising on smartphones is the way forward," said Satija of InMobi. “In the next 12-18 months, the Net will become a subset of mobile Internet."