Mobile Advertising in India at a very nascent stage

Are you ready to see your mobile phone’s small screen cluttered with ads? It makes perfect sense for mobile phone companies, forever scrambling for new ways to earn revenues. Online giants like Google and Yahoo too seem sold to the idea of serving advertisements on mobile phones. But it is yet to find a place on Indian marketer’s radar and there’s a big question mark on subscribers’ willingness to join in.

Mobile advertising in India is at a very nascent stage compared to markets like Japan, Korea and West, but many are reported to be preparing to get into the act. “The future for mobile advertising is already here, despite not being on many marketers’ radars yet. Hundreds of millions of ads are already being run, click-through rates are much higher than online.

The growth of 3G networks, IPTV and high end gaming on mobile phones will open new avenues for advertising on mobile.

The size of mobile advertising in India is miniscule, it has potential to grow at 200% a year, giving operators a new revenue source. With the average revenue per user (ARPU) constantly falling, it could be a saving grace for operators. From Rs 356 in March last year, the ARPU in December 2006 has declined by 115 to touch Rs 316.

The worldwide mobile advertising market is pegged at $1 billion currently. IDC believes with more than two billion mobile users in the world, it prevails as the first medium through which advertisers can reach such a large audience on an individual basis.

In India, it is currently a Rs 5-6 crore market, set to grow to Rs 20-25 crore by March 2008. It is clearly a medium that needs to be evangelised to brands as how Internet advertising was done to brands in early 2000 – 2001.

Mobile advertising can take many forms like SMS broadcast, MMS broadcast, sponsored content, WAP ads and product placement in games. Currently, it is restricted to SMS based activities in the country. Some FMCG, beverage and entertainment companies have tested MMS too and few operators have also tried to get sponsorship revenue from value added services.

Seeing the huge potential of mobile advertising in future, operators like Bharti Airtel, MTNL, Reliance and Tata Teleservices are exploring the option, but feel it will take some time for the format to take off in the country in a big way. Tata Teleservices CEO Darryl Green says the company will go for portal-based advertising rather than offering subscribers free calls in return of advertising messages. Bharti Airtel is also looking at this option, and has featured ads on its WAP site in association with ICICI Bank.

Targeted mobile advertising is 50% more acceptable to mobile internet users than untargeted ads, according to the consumer mobile advertising report conducted with more than 1,200 mobile internet users across the US, Europe and India. Cellular Operators Association of India and the GSMA are conducting a study to establish industry-wide mobile advertising standards, metrics and advertising service solutions.

Orange in France has been running a trial involving SMS/MMS, WAP push, pull advertising and sponsored content. In the US, Verizon Wireless and Sprint Nextel are also testing the model. China Mobile and China Unicom have plans to sell advertising space via SMS/MMS, games, IVR and mobile internet.

As 70% of the SMSes have less than 40 characters, value added services provider Cellebrum has come up with a solution where micro advertisements are inserted into the text messages of subscribers who opt-in to the programme in exchange for incentives such as free SMS or reduced tariffs.

Source: Financial Express