Advertisers banking big on 3G

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3G is supposed to be the much-awaited magic wand that will flit away all the telecom woes-from falling ARPUs, to price wars to rising capex. With app stores and 3G enabled handsets flooding the market, operators believe that killer apps, powered by VAS are truly key to milking the 3G cash cow, and getting fast RoI on high costs of 3G rollouts.

However, contrary to a blinker like approach to VAS and killer apps, offering content that is truly a value add to customers 'and', fulfilling a latent need is more important. This is where mobile advertising steps in for 3G. Tracking trends and needs of customers, displaying useful information while advertising a related product or special offers at a store near the customer, as well as positioning different ads for urban and rural areas, will lead to higher revenues for operators, content providers, advertisers and customers.

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The Indian advertising market today is pegged at $500 mn. Ad-generated content-driven mainly by innovative video ads-will be the future of mobile advertising in the 3G era, where faster speed will allow better brand experience, and interactivity will make it better than watching ads on any other platform.

According to Kushal Sanghvi, executive director, business development and media alliances, Stratoshear Technologies, providing advertisers with rich 3G media campaigns with video inventory for WAP sites, Stratoshear offers more than just banner and text ads available currently, while allowing the advertiser to choose the format that suits him/her best, as well as the platform to plug the ad. “By doing this, we are fulfilling a large requirement in the marketplace for WAP space, as well as bridging the gap between the publisher and the advertiser.” With unconventional platforms of advertising, catering to various types of customer specific needs, Stratoshear is now working with telecom companies for customer profiling, as well as publishers to build a robust advertising platform, which will soon be launched.

What if you could generate ad content made by users themselves-by making it so engaging that even with an option to skip the ad, users would rather watch it because it is something they are interested in, and links them back to the application which the ad is also based on? Vdopia is a company that does exactly that. Explains Debadutta Upadhyay, VP, Vdopia, India, “We are a futuristic company in the sense that we have worked on a technology app based on which an ad is displayed before the app downloads (pre-ad format), which links the user back to the application once the ad is complete. We would be the first to offer this new ad-format in India available across all ad platforms, but are waiting for 3G to in.” Data on consumer preference according to age group and general statistics of demography and trends, is provided.

Mobile marketing is a good way to build declining revenues. But how exactly do you differentiate which ads go to which customer? According to Amit Parekh, director, technical sales, Telecordia, “Telecordia has developed a personalized advertising platform and converged app server, using an opt-in model for certain ads, giving subscribers the freedom to choose ads they want to receive. This drives differentiation of services and contributes to consumer.” With the converged app server, unique ad performance measurements, like number of clicks promotes a trigger response for an ad based on usage of subscribers, providing some basic information to the customer, and linking it with rewards, providing an innovative way for operators to increase ARPUs.

Jasper Infotech, a company which provides a mobile coupon facility through 15,000 retailers in India, has plans to introduce applications through which consumers can view a restaurant from a 360 degree perspective, as well as see photos of dishes and price lists before entering a restaurant, once 3G comes in. Another such innovator is Affle India, a mobile marketing and advertising solutions company, which plans to introduce 'Pinch'-an application for smartphones, which, with the help of social networking and messaging, allows location based alerts, allowing advertisers to target customers where they are at present, for example, a mall. This application has been successfully implemented in mature 3G markets like Singapore and Australia. Nyootv is another innovative online TV portal which pays users to watch content, which it offers them free of cost, and generates ads through feedback and user trends that appear during a chat session or while watching a video.

Keeping it Sticky

With 3G coming in, advertising will be all about show and tell-brand features, products and services, video and mobile advertising (which now has a 50% growth y-o-y) will see a boost. Video advertising, which was not possible till now due to limited bandwidth availability for a complete ad experience, will now be possible.

But how does one ensure stickiness without intruding? “Users are getting more educated today, and if provided with relevant advertising, users will not mind if usage trends are shared by operators to give them relevant information and deals. Besides, mass advertising or bulk-smsing has gone down drastically, as advertisers have realized it is a waste of money,” remarks Upadhyaya.

Connectiva Systems, a revenue management company, which works with operators such as Bharti, Zain, T-Mobile, Etisalat and Ericsson, offers multi-channel telecom analytics to measure customer preferences based on feedback, which has helped save more than $500 mn in revenue leakage for these service providers, through an analytics based platform.

As quoted in a recent article, Satya Kalyan Yerramsetti, CEO, SMSCountry Networks remarked, “The surge in advertisements on the mobile platform has encouraged a comeback on the foray of cheap mobile handsets, falling tariffs, operators offering Internet and GPRS at cheaper rates, as well as 3G services which will enable TV viewing on mobile handsets-taking the mobile advertisement market to a new level. Besides, the advertisers can reach a greater number of users by advertising on the interactive mobile platform and meet their desired objective by incurring only a fraction of the cost.” SMSCountry Networks pays cellular operators for the free SMS services offered by them, and draws revenues from companies advertising on the mobile platform.

Profitable for All
Mobile operators today are bearing the brunt of applications traffic, but share little of the profits. The overall communications base in India today is bigger than the US, and advertising has a great potential-which till now has not been fully exploited. One of the main reasons for this, is failure to correctly target customer needs with specific point-to-point advertising, and also disputes between operators and advertisers on sharing customer database and sharing revenues from ads generated by operators.

According to Karthik Ananth, director, Zinnov, “Rescaling of content, making it fit according to the need of the consumer, addressing a need-offering small English clips in rural areas for Rs 15-20 a month, linking information from the government to ads for local news at a micro level for rural areas, providing personalized entertainment in short clips, corporate training at home in urban areas (according to consumer preferences)-will help boost advertising revenues. Variety, reception quality and user relevance, are the most important areas for content providers to look into.”

With fall in ARPU VAS has become a priority. However, stickiness is based more on content, and 3G can truly leverage it. Remarks Sujata Dev, joint MD, MoVi, “Since data is more on 3G, and video content has limitations on a 2.5G network, ads on this platform will grow in a 3G era. Big serials and movies will be shown in small clips or sachets of two to three minutes, and microblogging will also become popular. Profiling content is important to fit different mobiles, and content reprocessing and content DRM will lead to new business evolving in the value chain.”

While operators who know a user profile can better cater to the personalized needs, they can also demand commission from advertisers for leveraging content on their medium, as a chance for added RoI. Going outside the operator decks, and leveraging VAS at strategic locations by reaching out directly to consumers, and eliminating the operator, is another option today-which can help to double VAS revenues. According to Dippak Khurana, founder, VSERV.mobi, “Mobile advertising offers two to three more access points than a computer, pushing mobile advertising to overtake Internet advertising in the near future, offering SMEs a chance for more business.” 3G will be a game changer, but in India's price-sensitive market, ad revenues from 3G will depend on packaging of content. Advertisers would be keen to use operator platforms, if they are sure of getting revenues, but for this more developers have to come in an open environment that is agnostic. According to IDC reports, content on sport, Bollywood and finance will continue to be the most popular apps. And catering to various needs of different consumers, as well as collaboration between advertisers, operators and content providers are the only ways to ward off stiff competition from Chinese phones with innovative applications catering to every segment of the market.

Beryl M
berylm@cybermedia.co.in