Today, mobile operators are under pressure to generate new revenue streams to monetise massive investments in 3G licenses; manufacturers are producing ever more sophisticated handsets to secure market share; consumers demand instant access to friends, family, news and entertainment – whenever and wherever they are; and advertisers seek additional marketing encounters with their customers.
The mobile advertising industry is experiencing explosive growth as more and more brands and content owners realise its potential. The robust growth of the Indian economy (8.9 per cent over three quarters) was more than matched by the rapid growth of mobile Internet advertising. In Q4 of 2010, ad spend on mobile Internet advertising saw a 233 per cent increase compared to Q4 2009.
Advertisers are realising that mobile phones have one user and are carried 24/7, in use at home, at work and when on the move, making them an instant, real-time response channel for any other media channel. They are very personal devices, which means they are a powerful channel to deliver highly targeted and relevant information. They also realise that, thanks to GPS, a user’s location can be tracked at any time. This enables advertisers to be able to send location-specific information.
At the same time, new technology means responses to mobile marketing can be tracked back to specific campaigns in specific media, for example, real-time reporting on SMS responses requesting brochures, content delivery, click through to mobile Internet sites and detailed analytics of pages browsed.
The development of mobile advertising and marketing will inevitably be based on content, which will be sold on and off portal. With competition from the mobile prepaid market in India (more than 90 per cent of mobile users in India use prepaid plans), carriers must play a key enabling role in facilitating and accelerating off portal transactions and enable a new wave of content to drive sales or lose out in the price war. And agencies must understand the potential of the mobile market.
Media agencies are still overlooking the mobile sector. Today, most mobile advertising expenditure currently comes from direct marketing budgets, and despite its obvious potential, mobile advertising will not establish itself as a major market until it has the commercial capability to tap into the enormous above-the-line advertising budgets. Examples of companies that have experimented with digital marketing in 2010 include Mercedes Benz, HUL (FMCG products), Volkswagen, Vodafone, Parle (Foods) and Eureka Forbes.
Mobile marketing campaigns are becoming more compelling in terms of the creative delivered. Like many Internet surfers, mobile social networkers use the sites for two main reasons: entertainment and companionship. However, this will soon change as mobile phones become more and more ubiquitous and cost-effective as users rely on them for many different functions.
Advertisers use mainstream media to target PMEBs (Professionals, Managers, Executives and Businessmen). But with mobile ads, companies can now effectively target under-served markets, and in markets outside cosmopolitan areas. These users have demonstrated that they have disposable income and that they enjoy keeping track of the latest products.
(Dr KF Lai is CEO of BuzzCity.)