Cash­ing In

Mo­bile op­er­a­tors need to plan their moves so they can make mo­bile ad­ver­tis­ing a sig­nif­i­cant rev­enue booster

Voice&Data - - MOBILE ADVERTISEM­ENT - Ved Prakash Singh

Given the de­clin­ing voice AR­PUS, it is im­per­a­tive that the ef­fec­tive use of mo­bile ad­ver­tis­ing as a new busi­ness idea for rev­enue en­hance­ments is car­ried out by the In­dian mo­bile op­er­a­tors as they can play a key role to act like a medium for ad­ver­tise­ments. As is the case for a TV chan­nel and news­pa­per, a mo­bile can be thought of as a prospec­tive medium for the ad­ver­tis­ers to reach and sell their prod­ucts. A TV chan­nel or a news­pa­per can be shared by many peo­ple whereas, at a time, one mo­bile is shared by only one per­son. This per­son­al­iza­tion char­ac­ter­is­tic makes mo­bile ad­ver­tis­ing the most promis­ing ad­ver­tise­ment medium. With the 3G tech­nol­ogy be­ing in­tro­duced in the coun­try, a proper ecosys­tem would come into place thereby mak­ing mo­bile ad­ver­tis­ing more en­gag­ing, more in­ter­ac­tive, and more in­tel­li­gent. Mo­bile cam­paigns con­tinue to be a pow­er­ful ad chan­nel for mar­keters out­per­form­ing online ad­ver­tis­ing by roughly 3 times across a va­ri­ety of met­rics in­clud­ing ad aware­ness, mes­sage as­so­ci­a­tion, and pur­chase in­tent. The mo­bile is a re­flec­tion of the per­son’s in­di­vid­u­al­ity and users tend to click on tar­geted ads more on their phones lead­ing to gen­er­a­tion of en­hanced rev­enue streams. The in­creased user aware­ness in the re­cent times has made In­dia the sin­gle largest mo­bile ad im­pres­sion mar­ket in the Asi­aPa­cific re­gion. Sev­eral chal­lenges need to be over­come through well planned mo­bile ad strat­egy keep­ing in view the

In In­dia, mo­bile ad­ver­tis­ing will be pri­mar­ily driven by en­hanced user ex­pe­ri­ence, new ser­vices, and ser­vice bundling. There­fore some of the fac­tors which are go­ing to play a vi­tal role in mak­ing the over­all busi­ness vi­able are—

#1 Pric­ing: Tar­iff plans cus­tom­ized for dif­fer­ent tar­get user seg­ments. Com­pet­i­tive pric­ing of mo­bile ad­ver­tise­ment ser­vices

#2 De­vice-ser­vice In­te­gra­tion: Af­ford­able hand­set/don­gle with monthly us­age plans. De­vice-ser­vice bundling for in­duc­ing trial

#3 Net­work Op­ti­miza­tion: With only 5 MHZ slots for 3G spec­trum, the op­er­a­tors need to op­ti­mize net­works to han­dle in­creas­ing mo­bile ad­ver­tise­ment traf­fic

#4 Billing: In­tro­duce in­no­va­tive and trans­par­ent billing mech­a­nisms to ad­dress wide user base

#5 Con­tent: En­able ser­vice dis­cov­ery and user aware­ness. In­tro­duc­ing in­no­va­tive re­gional mo­bile ad­ver­tise­ment con­tent

SMS/MMS based ads, ring­tone based ads, caller tune based ads, video shar­ing so­cio-eco­nomic na­ture of the dif­fer­ent types of mar­ket seg­ments in In­dia. The well drafted mo­bile ad strat­egy cou­pled with in­no­va­tive busi­ness mod­els has to give a help­ing hand to the mo­bile op­er­a­tors to be­come cash pos­i­tive af­ter hav­ing in­vested heav­ily in the spec­trum pur­chase and 3G in­fra­struc­ture roll­out for var­i­ous cir­cles across the coun­try.

Crit­i­cal Suc­cess Fac­tors

ads like Youtube, gam­ing ads—sin­gle and multi-layer— so­cial net­work­ing ads, idle screen based ads, con­tent based ads, pay viewer based ads, lo­cal­ized based ads, nav­i­ga­tion based ads, etc, would play a ma­jor role in the rev­enue stream en­hance­ments for mo­bile op­er­a­tors.

The other key busi­ness growth en­ablers are go­ing to be—huge reach, au­di­ence cat­e­go­riza­tion based on ad­ver­tis­ing rel­e­vance, evolved de­vices, ad­vanced wire­less tech­nolo­gies, aug­mented re­al­ity, and in­no­va­tive busi­ness mod­els for sec­tors like FMCG, re­tail, real es­tate, consumer durables; de­tect­ing the ex­act ad­ver­tiser mar­ket size; con­tact and build­ing re­la­tions with the ad­ver­tis­ers; plan­ning the event cal­en­dar for the year so that tar­geted ad­ver­tis­ers can be lo­cated; build­ing a stan­dard op­er­at­ing pro­ce­dure; and cre­at­ing ef­fec­tive price pack­age for the ad­ver­tis­ers.

To make the busi­ness model a suc­cess, the op­er­a­tors also need to add value by help­ing ad­ver­tis­ers throug—tar­get­ing ad­ver­tise­ments more ef­fec­tively as cus­tomers roam the web, track­ing ad­ver­tise­ment per­for­mance, pro­vid­ing re­sponse chan­nel for cus­tomers (in­clud­ing pay­ments), and pro­vid­ing post-pur­chase sup­port to the cus­tomers.

Presently, the mo­bile op­er­a­tors re­tain the largest por­tion of MVAS rev­enue (60-65%) and the rest is shared among the con­tent ag­gre­ga­tors and con­tent de­vel­op­ers. This divi­sion of rev­enue share is not arous­ing enough in­ter­est among

the con­tent de­vel­op­ers to in­vest heav­ily in the de­vel­op­ment of in­no­va­tive mo­bile ad­ver­tis­ing re­lated ap­pli­ca­tions for the mo­bile ad­ver­tis­ers and the end-users. The rev­enue share ar­range­ment has to be re­worked so as to cre­ate a proper rev­enue share bal­ance in the 3G MVAS ecosys­tem. With­out the right kind of bal­ance of rev­enue share be­tween the var­i­ous stake­hold­ers, the killer/sticky mo­bile ad­ver­tise­ment based ap­pli­ca­tions will not be able to see the light of the day.

Keep­ing in mind the frag­mented na­ture of re­cent 3G bid­ding process, new tele­com en­trants will also be tag­ging the high-end sub­scribers (post­paid) to in­flu­ence churn with com­pelling 3G MVAS. This will be in­ter­est­ing as with the launch of mo­bile num­ber porta­bil­ity, there has been a sig­nif­i­cant com­pe­ti­tion among car­ri­ers for high-end and mi­dlevel sub­scribers. Keep­ing these fac­tors in mind, the mo­bile op­er­a­tors have bid for 3G spec­trum in those cir­cles in which they had lead­er­ship po­si­tions in terms of rev­enue and/or sub­scriber mar­ket share.

Huge Rev­enue Growth Op­por­tu­ni­ties

Cur­rently, the mo­bile ad­ver­tis­ing mar­ket glob­ally is ex­pected to be around $1.3-1.6 bn and will grow to be­come $11-13 bn by 2015. In a re­cent sur­vey, it is wit­nessed that around 70% of the re­spon­dents in In­dia re­al­ize value of mo­bile ad­ver­tis­ing and per­ceive the ben­e­fits it can bring to them. Dis­play ad­ver­tis­ing is a new con­cept in In­dia and the adop­tion has gone up con­sid­er­ably over the last one year. In­dia reached its high­est traf­fic level with 2.6 bn ads be­ing broad­casted to 59.4 mn users in the month of May 2011. There was an in­crease of 44% ban­ner ads served to the In­dian au­di­ences on their mo­bile phones. In­dia has the sig­nif­i­cant num­ber of mo­bile game down­loads with more than 14 mn down­loads in Q1 and a growth rate of 24% Q-on-q. This shows that the con­sumers are ready and the mo­bile op­er­a­tors need to grab this op­por­tu­nity with the right kind of busi­ness mod­els.

Con­clu­sion

In an in­ten­sive com­pet­i­tive land­scape, the op­er­a­tors are fac­ing chal­lenges on 3 key fronts—driv­ing cost ef­fi­cien­cies, build­ing cus­tomer en­gage­ment with their brand, and en­sur­ing rev­enue growth. In this sce­nario, the abil­ity to cost ef­fec­tively and rapidly re­tail a wide cat­a­log of ser­vices tai­lored to spe­cific consumer seg­ments is crit­i­cal com­pet­i­tive dif­fer­en­tia­tor for op­er­a­tors to sus­tain and grow their busi­ness. The re­cent TRAI con­sul­ta­tion pa­per on VAS is def­i­nitely go­ing to cre­ate a fa­vor­able mo­bile ad­ver­tise­ment ecosys­tem whereby the mo­bile op­er­a­tors in the MVAS value chain would get an am­ple op­por­tu­nity to en­hance their rev­enue streams. The author is group tele­com

ex­pert, CPA Global vad­mail@cy­ber­me­dia.co.in

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