Cell phones have become a powerful advertising tool in India, and once 3G and MVNO launch there, mobile marketing will be big business
Navin Khemka, senior vice president of media services group ZenithOptimedia, said it is the reach of the mobile phone in India that makes it significant for marketing efforts there.
In India, there are over 330 million mobile subscribers and the number is growing each day. This has encouraged several FMCG (fast moving consumer goods) companies, banks, magazines and TV stations in the country to extend their promotions to the mobile phone platform.
"No other medium has this reach. Since it's a very personal device, a basic form of advertising like SMS can be effective if used in a more targeted and contextual way," Khemka told ZDNet Asia in an e-mail interview.
For long, marketers in India wanted to do more targeted advertising, but focus on traditional media—such as print and television—stopped them from doing so.
Abhijeet Saxena, CEO of mobile marketing company Netcore Solutions, said now is a good time for mobile marketing.
"Now, everyone wants more punch for the buck," Saxena told ZDNet Asia in an e-mail interview. And mobile marketing gives them just that.
Mobile marketing is not only cost-effective, but advertisers can be sure their ad has been seen by the consumer, which is not the case with TV or print.
Khemka said: "In India, over a hundred mobile value-added services (VAS) and technology companies are working to bring more innovative solutions on the mobile and keep advertisers abreast of new technologies being launched."
Companies like Affle India, Webaroo Technology India, Flytxt, Netcore Solutions and Vakow Technologies provide platforms to advertisers who want to reach the ever-growing mobile population in India.
Today, technology providers have mobile advertising tools that take into account aspects such as the mobile phone user's privacy, and the frequency of sending text messages.
Telecom operators too are partnering mobile technology providers. In February, Reliance Communications announced the implementation of an integrated carrier-class mobile marketing software platform called Neon on its network, as part of its tie-up with mobile advertising and marketing technology provider Flytxt. Neon features a sophisticated mobile CRM (customer relationship management) database and the mobile applications required to conduct large-scale mobile customer engagement programs.
Vinod Vasudevan, CEO, Flytxt India told ZDNet Asia in a phone interview: "Mobile marketing platforms like Neon can help operators increase their average revenue per user (Arpu)."
From advertising to invertising
Though mobile is a powerful tool for targeting consumers, marketers have been cautious about tapping this medium since it often intrudes into the consumers' private space. Besides, the National Do Not Disturb (NDND) Registry of telecom regulator TRAI (Telecom Regulatory Authority of India) seeks to curb unsolicited commercial communications (UCCs). The NDNC Registry is a database of telephone numbers of subscribers who do not want to receive UCCs.
As they tap on this growing medium, SMS marketing companies must also overcome spamming. To do this, they have created various platforms designed to satisfy the needs of both advertisers and consumers.
According to Saxena, there are two ways to ensure no messages are sent to subscribers on the NDNC Registry.
"One, we insist on scrubbing the messages with the NDNC list. Two, subscribers explicitly opt-in to any service or messages. This has been pioneered by us," Saxena said. For instance, if you buy something from a retail store and want to be updated on this product, you "invite" information from the store on new arrivals and it will send multiple SMS messages every month telling you what's new. You can also opt-out of this service.
This concept, known as invertising or invited-advertising, seeks to prohibit spam.
"Consumers have several needs. If a consumer seeks [advertising] information from companies that cater to [that consumer's] needs, then it's termed as invertising," Saxena explained. According to Saxena, many of Netcore's clients use this service.
"One such example is The Economist magazine. Even those people who do not subscribe to the magazine prefer to receive content from The Economist. They can now invite information from The Economist. This way, the magazine gets to create a direct relationship with its potential subscribers," he added.
Vasudevan said: "Mobile marketing solutions can be very effective for banks and retail stores to carry out their consumer relationship programs."
According to a Reliance Communication statement, more than 50 well-known brands in various sectors such as FMCG, finance and automotive have benefited from mobile marketing services on Reliance Network.
3G, MVNOs to cause paradigm shift
Mobile advertising in India is all set to see an increase with the arrival of MVNOs and 3G, say observers.
So far, mobile has attracted low advertising spends because of its format of advertising—simple text SMS or basic pictures.
Khemka said: "With 3G, a paradigm shift is expected in mobile advertising."
Vasudevan said: "3G will open up new avenues for advertisers, such as rich media content and video over the mobile phone."
With 3G, advertisers may be able to subsidize the cost of downloading rich media content by subscribers.
Saxena said: "For example, a song from a new Bollywood film can be put up for download with an ad of a soft drink company as a pre-roll or a mid-roll. Consumers can download this song for free while the soft-drink company pays for the download."
Recently, the Indian government approved MVNOs to operate in India, though the detailed guidelines for this are pending. Generally, MVNOs provide mobile phone services by buying airtime from existing telecom operators. They then market it by leveraging their brand and distribution network.
The MVNOs too will change India's mobile advertising scenario substantially, according to market players. They can help grow the mobile marketing industry as well as the subscriber base in the country.
Citing the Blyk mobile model, Saxena said that MVNOs can even offer the entire mobile service for free if the subscriber opts to receive a certain number of advertisements per week.
Blyk is an operator in the United Kingdom that sells mobile network for free. It gives customers free airtime in exchange for accepting up to six advertising messages per day. Blyk generates all of its revenue from advertisers. The company's priority is to ensure it has a user base that advertisers will pay a premium to reach.
"Since MVNOs will be dependent on VAS and advertising to create a differentiator, it will be an important contributor to the growth of mobile advertising," Saxena said.