President-Value Added Services | 28 Aug 2007
Mobile advertising holds the promise of targetted delivery to large customer segments. At the same time, the personalised nature of delivery and the instant ability to seek a response or closure are great attractions for advertisers. It seems to have the best of direct marketing and mass advertising.
As President of the Value Added Services business of Tata Teleservices Ltd, Pankaj Sethi leads the strategic development of new products and services and is responsible for driving VAS revenues and profitability. Under his leadership, Tata Teleservices has played a pioneering role in developing services at the leading edge of the industry.
Sethi has a rich experience in media and content, having worked in film production and television programming companies like Nimbus Communications as Executive Director, and at Mukta Arts as CEO. He has worked as a marketing professional with consumer marketing companies like as Brooke Bond of Unilever, Johnson & Johnson, and Richardson Vicks International (P&G).
Sethi speaks to exchange4media’s Rishi Vora on the growing scope of mobile advertising in the country. Excerpts:
Q. Where do you think is mobile advertising placed in India as of now?
Today, mobile advertising is attracting tremendous interest globally, from advertisers and marketers. These are early days and marketers are quickly building up their case studies to better understand this new medium. It holds great promise and is all set to grow in a major way over the next three years. A share of 15 to 20 per cent of ad spend is projected.
How effective do you think this medium would be in creating more brand awareness? Why do you think advertisers will put in their money in this new medium?
The role of mobile advertising will be more to create a response to known brands, or to special offers from familiar brands. Brand reminder, rather than brand awareness, will result from mobile advertising. Awareness of content and service options will also have a role to play. To answer the second part of your question, mobile advertising holds the promise of targetted delivery to large customer segments. At the same time, the personalised nature of delivery and the instant ability to seek a response or closure are great attractions for advertisers. It seems to have the best of direct marketing and mass advertising.
Q. What could be the advertising models and what do you think could be the bigger markets?
Advertising will take different forms based on device capability, stretching from the simple voice and SMS-based advertising to the complex MMS and video-based advertising. Obviously, the larger addressable market will be at the SMS end, while marketers may find good value in addressing high-end customers that are difficult to catch through other fragmented media.
What are the different genres of mobile advertising? What genres do you think will succeed?
Marketers will seek the response and lead-based nature of mobile advertising. There will also be a genre of customer engagement in the brand through games, microsites, ringtones, friendship clubs, etc. Some elements of mobile will lend themselves to a reminder nature of ads, like for transient pages as data is collected from a remote server by WAP or Brew applications. Advertising sponsored content and opt-in advertising will have their independent roles to play.
Q. What do you think are the business models that companies might want to look at?
Payouts from advertisers will vary from CPM to cost per click, to cost per lead. And values will depend on the quality and depth of data of audiences. Search-based advertising will find its own levels of pricing.
Q. How much do you think the telecom operators earn through mobile advertising? If in terms of commission, how much would be passed to the telecom operator?
In targetted advertising based on databases nurtured by operators, the operators will look for shares, much like other media broadcasters and partner with specialist media agencies or advertising agencies and their clients. Search based advertising, however, will bring in an additional layer of revenue share in favour of the search partner like Yahoo!, Google or a White Label. The terms on these are still being worked out.
Q. Can you brief us on the technology behind this new medium?
SMS, voice, MMS, WAP, Brew, caller tunes, voice portal, game... these are all technology-based applications. The challenge is to build the integration of databases and response results across delivery mechanisms that will work for advertisers.
Q. Are there any legal constraints in this business?
TRAI is issuing strong norms on telemarketing and SMS marketing, which we all see as spam. The guidelines relate to a national level registry to record customers who do not want to be disturbed and marketers need to adhere to their request.
Q. What are the probable threats to this business?
Given the early levels of response seen on mobile advertising, the business holds few threats, as long as the communication can be directed and minimally intrusive. Customer privacy of data may surface, but telecom advertisers will take good care to ensure that this is guarded.
Q. How has your company explored this new medium till now? And how successful has your company been in advertising through this medium?
At Tata Teleservices, we have already developed a very advanced model for delivery of mobile advertising in Brew applications and WAP, with response levels that cover click to SMS, click to call, click to vote and click to download ringtones, wallpaper and games. We have also played out caller ringtone-based campaigns for our key customers. We have successfully implemented corporate CRBT advertising for our clients like Titan and TCS. SMS-based lead generations have worked wonderfully for in-company services and for advertisers like Tata AIG in the past.