Mobile Marketing: The Next Boom

Mobile marketing is booming as many telecom service providers are actively looking for additional revenue streams in the Asia Pacific.

As this potential marketing growth is unleashed, the SMS market is growing along with it. Around seven trillion SMS texts will be sent in 2011, according to ABI Research.

Approximately 4.2 billion mobile subscriptions worldwide will generate huge volumes of SMS. Young populations are growing in countries such as India and China, and messaging is a popular tool to connect among such young mobile users. This population segment will continue to drive mobile advertising in the Asia Pacific region.

The advantage of SMS is that the messaging tool is universal, cost-effective, and most mobile consumers have their phones switched on and with them most of the time. ABI Research recently revealed that shopping via smartphone devices is popular, with almost half of all users indicating they plan to use their phone for such activities. India in particular is a hot market for smartphones.

So what’s triggering mobile advertising growth? Operators’ strategies are making a big impact on the growth of mobile advertising, and entertainment is one of the most efficient tools which can be used to reach consumers.

According to Airtel Mobitude 2010, a survey used to map mobile phone usage trends across the country showed that 90 billion SMSs were exchanged in India on Airtel last year. The maximum number of SMSs exchanged was recorded at 12 billion on the auspicious occasion of Diwali.

In the entertainment space, songs from the Bollywood movie ‘Dabaang’ were on the top of the Indian mobile charts, with “Munni Badnaam Hui” and “Tere Mast Mast Do Nain” at number one and two in the full songs downloaded category.

Atul Bindal, president of Mobile Services, Bharti Airtel, said that, “Today, people across India are relying on the mobile platform as their source of entertainment and information, from songs, videos, wallpapers to applications.”

India is emerging as the next hot destination for mobile marketing activities. In 90 days, the Indian market grew by over 1 billion impressions (+22 percent) to become the largest market in the Asia Pacific region.

Smartphones remain nascent in the market with 88 percent of all mobile ad impressions served on advanced phones. Nokia devices remain commonplace in the Indian mobile market with 12 of the top 15 devices manufactured by Nokia. Android and iPhone OS have yet to gain significant ground in India and represent only a 0.4 percent share of the market, according to InMobi.

“The Indian mobile advertising market continues to show rapid growth due to the improving ad ecosystem. Major publishers are bringing their media into the mobile channel while brands are simultaneously discovering the power of mobile advertising. The rapid growth of media consumption via smartphones signifies an important shift in the Asian mobile advertising community,” says James Lamberti, VP of Global Research & Marketing at InMobi.

This healthy consumer ecosystem, along with 3G network infrastructure improvements, will position India as one of the most influential mobile markets, according to Lamberti. Four operators have launched 3G services in the country. They include Reliance Communications, Tata DoCoMo, BSNL and MTNL. However, the subscriber-base is yet to grow to significant levels.

“With so many consumers using mobile devices as a primary means to digital media consumption, mobile usage is the complimentary media channel to TV for reaching extension while still maintaining a compelling brand experience that will only improve as smart phones penetrate at scale over the next year,” says Amit Gupta, co-founder & VP, Business Development for InMobi.

Hot Trends

The global mobile advertising market is expected to grow to $13-14 billion in 2011 and Asia Pacific is expected to bring in the majority of this revenue, followed by North America and Europe.

“Recent industry reports from InMobi and Synovate have revealed that consumers are showing a greater inclination towards receiving mobile advertising and marketing messages,” said Rohit Dadwal, managing director at MMA Asia Pacific.

MMA is mapping the top 10 hot trends in mobile marketing:

1. Personalisation to enhance effectiveness: Mobile marketing messages will become personalised. The adoption of permission-based marketing and the introduction of regulations and applications for blocking unwanted content will overcome present hurdles.
2. Over-the-top services to drive data: Over-the-top application-based VAS revenues will gain prominence over the on-deck operator ad revenues. These services will help create greater mobile ad spending. Operators can concentrate on enabling more converged devices like tablets instead of establishing their own app stores. Service providers will be forced to review their publishing business investments and plans.
3. Emergence of Free SMS/free video/free phone calls: Applications like WhatsApp and Viber, which are already allowing free SMS and calls from mobile devices, will gain more acceptance in the market. There will be an increase in mobile video consumption. The introduction of new ad units, including interactive and partial screen, will subsidize free content.
4. The re-birth of Windows 7 mobile: The new hardware specifications introduced by Microsoft will be providing a universal user experience. The re-birth of the Windows 7 mobile will fuel the growth of mobile Internet and advertising.
5. The HTML5 v/s Apps war: Though HTML5 offers opportunities, apps and app stores continue to rule mobile content. The availability of basic functions of an app, even without an active data connection, make it an appealing option for customers. Apps are device-specific and limit penetration while offering opportunities for experimentation. The other available opportunities may lead to a decline in the popularity of apps.
6. Location-Based Services (LBS) + Augmented Reality (AR) will be the leading integrated mobile technology: The demand in GPS phones has resulted in a series of location-based AR software platforms and applications. The combination of AR with LBS makes for the most intuitive user interface on mobiles. Such specific targeting will fuel ad spending and transactions.
7. Mobile micropayments will allow customers to pay from their ‘electronic wallets’ rather than ATM cards: In developing countries, the key advantage of the introduction of mobile payment will be quick transactions. It will be like an electronic wallet that a customer will always have access to and will provide them with relevant purchase opportunities while they’re on-the-go.
8. The re-emergence of mobile blogging: With the introduction and adoption of tablet devices, the consumers now have greater speed, connectivity and battery life in their mobile devices. Several writers/bloggers are already using these devices to pen down their thoughts. With processing power that allows for editing and upload of content in various formats, these mobile devices are fast becoming the preferred travel gadget for professionals and have created several new forms of user opportunities.
9. Continued proliferation of smartphones and mobile Internet advertising: Over 85 percent of handsets shipped globally will have browser capabilities by 2011. Business-to-consumer applications can be delivered using Web tools and Web adaptation tools. As smartphone penetration increases, more users will possess the technology to view richer content on their mobile devices, making the medium useful for marketers.
10. Mobiles will jump onto the 3D bandwagon: 3D technology is being incorporated in most of the gadgets available in the market today. Mobile handset companies have experimented with the technology, and the market will see a lot more experimentation in 3D phones in the coming year. 3D will lead to the development of new content and advertising avenues.

There are several alliances happening in India to utilize the mobile Internet action. Recently, Yahoo! India and MTS tied up for a service and content partnership for MBlaze, the data service of MTS, which is offered in 96 towns in India and has over 400,000 mobile broadband customers.

As part of the agreement, MBlaze users will be able to access a Yahoo! and MTS co-branded page that will provide their account information and content, including Yahoo! Mail, news, live TV and mobile search.

The co-branded page will deliver convenience for MBlaze customers as they will now have a single destination to obtain information such as their account balance, account status, mobile products, network coverage and to recharge the balance on their pre-paid accounts. Plans are underway to offer the page in local Indian languages.

Vishal Maheshwari, head Mobile and Business Development at Yahoo! Asia Pacific, has said, “Through our partnership with MTS, we have now made it easier for consumers to get to their Yahoo! content and services while they are on the move.”

Yahoo! and MTS will introduce an Integrated Communications Suite for MBlaze customers that will include email, chat and social communications in the future.

Leonid Musatov, chief marketing officer of Sistema Shyam Teleservices Ltd, said, “We plan to extend this service to our customers in local Indian languages in the near future.”

Mobile Internet has been in India for some time now. But 3G, which has been launched by two private operators (Tata Teleservices and Reliance Communications and two government-run service providers – BSNL and MTNL), is yet to contribute to the growth of mobile advertising in India.

Looking at tapping into the emerging 3G market opportunities, CanvasM, Tech Mahindra’s VAS subsidiary, entered into an agreement with Qualcomm to operate a 3G device-testing lab based in Noida, India.

Jagdish Mitra, CEO of CanvasM said, “As 3G becomes the next growth driver for the Indian telecom market, quality of service will be critical. We at CanvasM have made significant investments in this lab towards value-added services and device testing to help ensure a great 3G experience for Indian consumers.”

Sandeep Sibal, country manager and vice president of Business Development for Qualcomm India and South Asia, said, “Testing of 3G devices is important as device quality impacts 3G connectivity, 3G data and voice services, as well as the overall consumer experience of 3G subscribers.”

Mobile advertising will grow in India thanks to innovative steps taken by several mobile handset companies. For instance, Intex Technologies (India) has kicked off its biggest ever caravan campaign, termed as ‘Intex Mobiles on Wheels.’ The caravans, 26 in numbers, will travel through 14 states and 400 towns, over a period of two months, visiting the popular mobile phone markets in the regions.

Effective Campaigns

To utilize the brand association with Indian Premier League (IPL), leading sports brand Reebok decided to tap into the mobile advertising channel to increase the sales of its IPL merchandise, such as the IPL jersey. Reebok chose its partner mKhoj to design and run the new campaign. Primarily targeted at increasing the purchase of IPL merchandise, this campaign had to maintain the brand image of creativity and innovation. Reebok ads were also placed on WAP sites with primarily cricket, sports and youth-oriented traffic like sports sites, social networks, entertainment portals, etc. The results of the campaign showed that the viral element created via the jerseys was indeed a success, with the number of jersey wallpaper downloads exceeding the number of regular wallpaper downloads.

Outlook

Mobile marketing and advertising is set to grow at an annual rate of 41 percent to increase from €1.7bn in 2009 to €13.5bn in 2015, according to Berg Insight. By 2015, it will account for 15.7 percent of the total digital advertising market, or 3.4 percent of the total global ad spending for all media.

eBay says that the company’s worldwide mobile sales increased by 300 percent last year, tripling from $600 million in 2009 to $2 billion in 2010. Connected shoppers coughed up better than $2 billion last year via eBay’s mobile applications alone. Indians are yet to get hooked onto such sites for shopping in a big way. But India will surely be catching up on the mobile marketing space, with the service providers offering innovative services and with marketing companies spotting new opportunities.

Brief

Indian mobile marketing space is growing thanks to innovative steps taken by telecom service providers and product marketing companies. With the launch of 3G services and the arrival of more smartphones, the mobile marketing market will see more traction in coming months.