MOBILE MARKETING

THE GROWING BLIP ON SMALL SCREENS

It is just about taking off in India, but mobile marketing is getting a lot of attention. A special report on how marketers are planning to invade your mobile phones – and why.

The soft taps of thumbs on mobile phone number pads are getting louder for Rajiv Hiranandani, co-founder, Mobile2Win, a digital and mobile entertainment company. "Clicks in this medium are 5-8 per cent and outperform clicks in the internet," he says. He is talking about the short message service (SMS), the most widely-used messaging vehicle in mobile marketing. Mobile2win provides information and entertainment ranging from news, jokes and horoscopes to sports scores, stock info and mobile games through the ubiquitous headphone. Hiranandani is not the only one who can hear opportunity knocking. Telecom service providers too are hungrily looking at a market that can only explode – just 23 per cent of India’s 1.1 billion-population owns a cell phone. Marketers and advertisers are equally excited. So are media companies. But what exactly is mobile marketing?

As a generally-accepted definition, mobile marketing is the process of sending spam free, personalised, permission-based marketing messages to receptive consumers through their cell phones. Mobile marketing can be either push-based which refers to communication such as SMS and alerts sent to mobile phones. But to send pushbased messages, firms should have the consumer’s permission. The pull-type refers to information a user requests from a service provider or advertiser. While mobile marketing today is almost totally SMS-based, the increase in the number of large-screen phones and MMS enabled phones will shape the industry soon.
Mobile technology is witnessing new applications and services. This combined with the rapid integration of the internet, mobility and communications at the device, service and transport levels has created a new set of business opportunities. For consumers, mobile phones have become much more than entertainment handsets. Already experiencing a high-end electronics experience from state-of-the-art digital cameras, camcorders and game consoles, they are beginning to expect the same on their mobile phones – a broad range of compelling, interactive content. Therein lay the opportunity for marketers and advertisers. As a medium, the mobile phone screen has the potential to support brand building and strengthen consumer relationships. And marketers have been quick to cash in. One of the early selling points was the possibility of generating immediate responses from consumers at any time and from any location. But marketers and advertisers have proceeded with caution because nothing puts a consumer off than indiscriminate spam.
Operators are increasingly looking for applications that attract users to avail of the services offered. Value added services (VAS) have begun to add significantly to the bottom line of most telecom operators. Almost 10 per cent of an operator’s revenues come from VAS services and this figure is all set to grow. Business generated from VAS rose from Rs 2,851 crore in 2006 to Rs 3,700 crore in 2007 – up by 30 per cent. Marketers, agencies and media companies, especially mobile telephone service providers are facing a new environment. The mix of media channel has shifted from the one-way broadcast channel to two-way communication. Consumers, today, not only want to talk back to marketers and interact with marketing messages, they also want to share this message amongst like-minded communities.

This shift brings in more direct dialogue between marketers and consumers and is being facilitated by telecom companies. In the past, marketers could never get real-time feedback from end-users. Firms are developing powerful branding in the mobile arena. They are working out ways to clearly state how their business is relevant to the mobile world and how they can reach their customers, partners and suppliers, whether through clever messages or advertising. So far, most of the advertising on cell phones has been from phone companies themselves. That is changing. Car-makers, movie studios, financial service providers, FMCG companies and others are testing the waters vigorously. Research firms estimate the mobile advertising market at Rs 35 crore (not including revenues of media companies from SMS contests and the like) for 2007 and grow at 40 per cent over the next few years. That revenue is going to have to come from more areas other than the highly popular SMS, ringtones or wallpapers.

For now, mobile marketing – everything from ads to text-message voting campaigns seen on shows such as Indian Idol – remains limited in its appeal to advertisers. Mobile marketing is the best option for brands which wish to connect to the youth. "But currently all the major advertisers just allocate, say, 1 per cent of their marketing budgets to mobile marketing because of the limited options within the medium," says Viren Popli, senior vice president, STAR India. But he thinks it will get better. "As a medium, mobile is powerful. I can reach you wherever you are because the mobile is with you all the time," says Chaitanya Nallan, CEO, Gingersoft Media. The company owns mGinger, a service that provides advertisements on mobile phones. These are targeted at consumers who have opted for the service. When it comes to communicating with consumers on the move, the mobile phone is the most ubiquitous outlet. The different ways that mobile marketing can be used includes direct response, media interactivity, content downloads, sales promotions and coupons, advertising, customer service, and customer relationship management. So, what works best in a country like India?

IT MAKES GREAT BUSINESS SENSE

India has 267 million mobile phones. And the market is growing at the rate of five million phones per month. As a result, companies are quite busy leveraging the medium.

This dynamic platform has paved the way for the new credo: from massmedia push to mass-customization pull – pull in anyone, anytime, anywhere. Therefore, it has the potential to grow rapidly, providing brands, agencies and marketers the opportunity to connect with consumers beyond traditional and digital media. Onground reality could be different. And many questions arise. What are the mobile media channels or formats available to advertisers? How does a marketer optimise the effectiveness of a campaign and strengthen consumer satisfaction?

There are many sectors which are using the advantages a mobile phone offers, to good effect. The financial sector is one. Says Vishal Gupta, associate director, marketing, Aviva Life Insurance: "We have a database of policyholders to whom we send SMSes to remind them of due dates, initiatives and offerings." Just recently, makaan.com, the People Group’s online property site announced the launch of Makaan Mobile. According to the company, it is the country’s first pure SMS-based real estate mobile application. Developed by Mauj Mobile, the application is aimed at enhancing the overall consumer experience for property sellers who currently need to log on to the internet either to list their property or to view responses from interested buyers. Now, they can do it on their hand phones. Events like the IPL cricket series are heavensent opportunities for players in this arena. Indiatimes, one of the oldest in the field, used its short-code and asked people to predict the winner of the day by calling 58888 or sending an SMS on 58888 for the chance to win Rs 58,888 everyday. Indiatimes has in its portfolio, multimedia messaging, dating, chatting and email – all on mobile. Others are getting into the mood. Take Pizza Hut. For the first time, the pizza maker launched a mobile campaign in Delhi, Mumbai, Bangalore, Chennai, Hyderabad and Pune. Executed by mobile2win, the campaign includes promotions on both SMS and the mobile web (works on sets which are GPRS-enabled). The objective was to get people to register for the VIP Club, a virtual club, either on their mobiles or its WAP site. It entitles members to free coupons and a chance to win prizes and discounts. There are legal issues connected with SMS marketing. Only a few marketers follow the concept of permission-based messaging, whereby the customers register themselves with the advertiser pointing out their areas of interests.

The Telecom Regulatory Authority of India (TRAI) has issued stringent norms on tele and SMS marketing to avoid companies from spamming consumers indiscriminately. It has set up a national level registry where customers who do not want to be disturbed can register their numbers. All marketers need to adhere to this request. But if a mobile user is not registered on TRAI’s Do-not-disturb list, s/he is likely to be bombarded on the phone. The danger? It could put them off any kind of message from any marketer or brand.
Many firms are coming around and are taking care not to alienate consumer as they realise the value of the mobile as a direct medium. Especially because it is well-suited for a vital role in fully integrated cross-media campaign plans, including TV, print, radio, outdoor, cinema, online and direct mail.

One reason why the effectiveness of mobile marketing is pegged so high is because of its ability to reach the target demographics throughout the day instead of a particular time or when they are engaged in a specific activity – like watching TV. The other reason is that mobile marketing can leverage other media such as including a SMS short code on any other type of campaign (for instance, a TV ad could say, ‘SMS 12345 to get free information’). SMS has proved to be a boon to telecom operators since they get to take away a chunk in the revenue sharing. The deluge of responses – or voting, as the industry calls it – from viewers to shows such as Voice of India or STAR Parivaar Award are proof. "But I am afraid that if newer shows or new formats have to work, they have to put in more energy or think of innovative methods to seek higher consumer engagement," cautions Popli of STAR because the excitement or buzz around the SMS voting is sure to die down. The biggest reason for this mobile marketing push is that it is cost effective – the message reaches the audience directly. However, despite the growth potential, most brands don’t have a specific marketing strategy for mobile – it is yet, to be considered a serious supplement to conventional media plans. The most effective forms of messaging will be those that revolve around activities that build relationships with customers and deliver something of value to them, based on their interests and demographics. The marketing techniques in this scenario will depend on the software and device infrastructure, definition of the customer profile, data acquisition and customer segmentation. There are formats like WAP (wireless application protocol) – by which the user can access the internet – developing with the availability of new-age phones. But the biggest impediment is that the advertiser has to partner with mobile operators to deliver the message.

THE HOW AND THE WHY

The universe of mobile phone subscribers is the newest mass media platform. But techniques which succeed on television or the internet can’t simply be transferred to the phone. On TV as well as the internet, advertising grew alongside – and with – the genre. In this case, the marketer has to hit the ground running. The budding channel carries outsized expectations. "There will be more event and community specific campaign initiation," says Harish Bijoor, a brand consultant. "There will be more direct targeting of the consumer through various channels – age, demographics, individual statistics and preferences," he adds. One of the big boys in this space is mKhoj. It calls itself a ‘mobile advertising marketplace’ that gives advertisers a targeted way to reach out to consumers directly on their cell phones around the globe. It also claims to give mobile publishers a way to monetise their traffic. Advertisers can use this precise medium to create a strong brand and generate leads. Publishers use mKhoj to get contextual ads for its customers. But, what are the options available to marketers currently?

Nothing reflects the impact of the SMSvoting frenzy more startlingly than Indian Idol, the show that went on Sony Entertainment Television in October 2004. Between November 2004 and March 2005, it saw more than 55 million votes via SMS, each message cost the voter Rs 3. It was boom time for the mobile operator followed by the channel. A close cousin to SMS is MMS or multimedia messaging service. MMS supports graphics, pictures, audio and video. As a result, it provides mobile marketers with additional tools on this format. "But the biggest limitation is the MMSenabled handsets used by mobile-phone users," feels Raj Singh, co-founder and executive director, ActiveMedia Technologies. This perhaps is the reason for the popularity of SMS, which is simpler to use and can be sent in the regional languages too. "Also," says Gupta of Aviva Life Insurance, "Since all SMS replies are track-able, evaluating effectiveness is much better this way."

The benefits

1. Extending marketing communications beyond traditional media
2. Complementing traditional media in order to increase awareness
3. Allowing companies to target specific audiences
4. Encouraging the audience to take action as soon as it sees an ad or promo, rather than waiting until later.
5. Providing opportunities to generate revenues every time users interact with messaging.

THE 5C IMPACT FOR SUCCESSFUL MOBILE ADVERTISING

Content, cross-media marketing, campaign management, customer database and carrier cooperation are vital for the success of mobile advertising efforts. Though, at the moment mobile advertising value chain is fragmented. For mobile marketing to succeed, business models that can capture the synergy of two existing industries, advertising and telecommunications must be conceived. In any future sustainable business model, all players will have to reach a consensus on the structure of the value chain and on the importance of each player in that value chain.

WAP and Mobile Web

Wireless Application Protocol (WAP) is a technology platform used to create websites that can be easily accessed from mobile handsets, especially those with a small screen and limited processing power. Today, WAP 2.0 is standard supported by most mid-level models. Moreover, WAP allows mobile phone users to access a wide range of content and services, including streaming audio and video. Considering that WAP supports banner advertising, traditional marketers see it as the closest clone to internet. Says Hiranandani of mobile2win: "With news and information being the two most widelyaccessed features by WAP-users, marketers need to look at producing content focused to go with this genre." Even so, wallpapers, games and applications are the most widely-used mobile content that is delivered using WAP-push. "The trick with WAP-enabled services is to keep the number of steps taken to achieve the end-result to the minimum," says Singh. Even assuming that mobile internet access is becoming easier, the cost of accessing WAP still does not justify reasons for cell phone users to opt for these. Once costs of services fall further, this one has the potential to sweep in the internet users from PCs to phones.

The benefits

1. Mobile WAP can be a fairly cost-effective way to extend mobile and online marketing efforts.
2. It can support consumer’s needs to browse and pre-select key content on the desktop for access later on
3. WAP banner advertisement is now a viable way to reach consumers
4. A WAP page can be pushed to a consumer’s phone, making the site discovery process easy

Downloadable Content

Downloadable content is often used to entice consumers to participate in a mobile marketing campaign. For instance, the download may be a song, a ringtone, theme or wallpaper, video, game or any other application. "Technology to support this format is still inaccessible to the critical mass, but it is encouraging to note the number of people using GPRS," says Manoj Dawane, CEO, Mauj Telecom. GPRS (General Packet Radio Service) is a technology necessary for WAP to function on phones. "When using mobile campaigns brands need to educate consumers about how to participate in such events to get the best results," feels Jagdeep Kapoor, CMD, Samsika Marketing. This brings in its share of complications. For instance, it demands download instructions that are easy to understand. Downloadable content has been the next most successful tactic for mobile marketing, after SMS. But there are technology issues which force a tie-up between mobile providers and marketers. There are adaptability problems when it comes to handsets. Says Gupta: "Sometimes, it is effective to tie up with an operator or a third party service provider who will manage the campaign across telecom service providers that is supported across handsets." But, experts agree that simplicity in mobile is the key to effective mobile marketing. That’s the one lesson that can be learnt from SMS-driven VAS.

The benefits

1. Relatively inexpensive for certain type of content, especially when you have a web campaign ready.
2. As a mobile phone with cutting-edge is hip, the brand reaching this class is perceived to have a higher recall.
3. Easiest to supplement an existing web campaign.

Though the above are the most widely-used delivery mechanisms to reach consumers, technology helps the latter receive and manage some of the content via Bluetooth and infrared delivery mechanisms. Two years ago, Lee became the first brand in India to use Bluecasting – marketing through Bluetooth technology – to promote its new catalogue. Bluetooth devices were installed in Lee’s stores in Mumbai and Bangalore. Walking by, the customer’s phone beeped a simple quiz in which they were offered discount coupons. Lee claimed to have a click-through of 27 per cent. Makemytrip, Bookmyshow and STAR Plus are a few who have done Bluetooth marketing. Technology-enablers help manage mobile phone content on a laptop or desktop. The challenge here is to make the consumer aware of these technologies. Considering that a mobile ad can reach the consumer at a fraction of the cost of a billboard, marketers need to do the needful and, at the same time, make sure that they don’t alienate consumers.

PUTTING THE JIGSAW TOGETHER

Traditional advertising players such as ad and media agencies have not been the first movers in this category. So, who is involved?
On the face of it, it would seem that there are two different and quite distinct components making up the mobile marketing industry – marketing-advertising and telecom. But it is actually the mobile marketing firms and technology providers who have driven the emergence of this medium.

Mobile marketing was born of the internet revolution. Today, there are more mobile phone subscribers in India than there are landlines or even TV sets. "With the mobile phone becoming a primary means of communication, not only for voice but also for digital services, email, digital photos and navigation, it is an important medium for marketing," says Singh of ActiveMedia. While traditional advertising and telecommunications are well-established and have their own revenue models, mobile marketing and advertising has failed to integrate these two different industries. To analyse the mobile marketing medium, it is necessary to understand who the key players are. According to the MMA Global (an industry trade association for companies involved in mobile marketing), the mobile marketing ecosystem comprises four interconnecting strategic spheres – product & services (brands, content owners and marketing agencies), applications (discrete application providers and mobile (ASPs) Active Server Pages technology), connection (aggregators and wireless operators) and media and retail (media properties, "brick ‘n’ mortar" and virtual retail stores).

"However," says Devangshu Dutta, chief executive, Third Eyesight, a Gurgaon-based marketing consulting company, "The main players in the value chain are the advertisers, the mobile marketing companies, the media owners, the traditional ad agencies, the network operators/carriers, the technology providers and the customers." The mobile operator has a unique place in the mobile marketing value chain. Never before has one player had such a big influence on the development of a new marketing channel. "It is as if the print shop would rule the world of print advertising," comments Singh of ActiveMedia. To understand mobile marketing better, it is pertinent to consider three segments that drive it – the marketing, connection and the enabling clusters. "Integration across these helps get a clear sense on how each fits into the value chain," says Dutta.

The players in the marketing cluster focus on, well, marketing. Their activities include customer identification, managing the brand, promoting a product or service, creating the content that is disseminated to the end-users, developing the applications used to stage, launches and report on mobile marketing campaigns.

• Campaign sponsors own the brand and benefit from the promotion and delivery of their products/services through the mobile channel.
• Content providers create content such as advertising, trivia questions, ringtones, messages or promotions, which are delivered through the mobile channel.
• Marketing agencies help to develop and to manage the campaign, and employ the traditional channels to encourage people to opt-in for the mobile campaign.

This cluster consists of application providers, network aggregators and telecom operators who create the ‘medium’ used to connect and deliver mobile marketing content to the enduser. "This cluster manages the network infrastructure, thereby connecting the marketer with the customer, and enables the one-to-one relationship which is the hallmark of mobile marketing," sums up Dutta.

• Application providers straddle both the marketing and the connection spheres. While they are primarily techfocused, a few players extend across multiple steps in the value chain. In this highly technical aspect of the value chain, application providers are the interface between the marketing cluster and the connection cluster
• Network aggregators like media buying agencies hide the complexity of the network by developing technical expertise that shields the application provider and marketing cluster players from the challenges of delivering mobile marketing content through different wireless operator networks. "It is rare, or will become increasingly rare, that a firm that wants to do marketing will interact directly with the telecom carrier," explains Hiranandani. That is perhaps the reason why the role of the network aggregator is the key to the whole value chain.
• Mobile operators manage the network and provide wireless voice and data services to enduser. With the average revenue per user (ARPU) falling, it is important for operators to generate new revenue streams and they see mobile channel as a critical source of these new revenues.
  This spans both marketing and connection clusters, and consists of players such as regulatory bodies, handset makers, mobile operators and agencies.
• Regulators address issues specific to each cluster. TRAI, the primary regulator considers unsolicited messages and calls as illegal.
• Industry Associations such as the COAI (Cellular Operators Association of India) and even handset makers help develop the standards and create a framework around the industry. In fact, a critical role for these associations is to create an effective bridge between regulators and the industry.
• Infrastructure and intermediate players are too many. They consist of all the companies that create and maintain the technologies used to enable mobile marketing, including the switches, cellular towers, mobile phones, screens, software and even billing systems.

Overall, the role of the telecom operator is the most important one. For instance, as enabler, the mobile operator needs to demonstrate his reach for advertisers to be interested in the media. In order to make this happen it is very important that telecom operators strive to set common commercial and technical standards, not just nurturing their own revenues.

In the initial phase, the value-added services from mobile operators were restricting. They were on offer only to those on their networks. "The services are now uniform across operators, with some customisation, but the look and feel is uniform," says Hiranandani. For the service provider to grow, standards and formats have to co-exist for the development of the industry.

As advertisers, with access to a wide customer base, mobile operators have demonstrated their effectiveness. "From simple billing plans to pushing new VAS, they have demonstrated it all for marketers to be convinced of the advertising success," says Dutta. After all, if the mobile operators themselves aren’t using mobile marketing, who else would?

It is dawning on mobile operators that there might be a new revenue stream in mobile advertising. Their portals will have to provide the best reach and detailed segmentation information for advertisers to make the latter interested.

The mobile operators’ contribution is necessary to continue to drive mobile marketing and advertising forward. But to reach full potential, they must not only get the above three roles working internally but must also work together.