2012 Mobile Advertising

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1 Mobile Advertising 2012

2 APM recently joined Mdigi, a new media organization as the sales head. He had not thought that selling advertising on the mobile was so tough. But he is finding it difficult to meet his targets and is wondering where he and his team have gone wrong. Just yesterday, he had had a long meeting with a leading mobile handset brand, brand N, and he still hasn t been able to convince them to spend Rs.5 lakh on mobile advertising. And this is a brand that spends at least Rs. 100 crore per annum on television advertising! Why is the mobile handset brand N not willing to spend? What are their concerns? What is holding them back? APM is concerned. Is he following the right selling strategies? Industry Overview: m-advertising The Indian advertising industry is currently pegged at Rs crores & growing at an average of 10% per annum for the past 5 years. TV and Press have over the last 5 years garnered 40% each of the total advertisement spends. However, the world of advertising is changing at a dizzying pace. New media are transforming advertising and consumer expectations have changed accordingly. There s a whole new media eco-system which is evolving by the day. Media agencies are building inhouse capabilities or acquiring new outfits to tap into the potential of m-advertising. In this dynamic environment, no communications platform holds more promise than the mobile device. Over the last few years, the mobile space has undergone revolutionary change faster networks, falling prices of smart-phones, growth in mobile internet, apps & data usage have created a new unique opportunity for advertising. Marketers are beginning to look at this medium as it has the intrinsic advantages of reaching the right audience with the right message. While SMS was the undisputed leader of mobile messaging, recent regulatory changes have curtailed the use of this medium, though it still holds a lot of potential in terms of reaching a wider set of audience (one-to-one marketing), ease-of-use and device agnostic working. On the other hand, more Indians are discovering internet on mobile- search and rich format advertising is all set to explode. Advertising impressions in India are growing at an amazing pace, Inmobi served 17bn impressions last month. Though mobile advertising is still at a nascent stage, the potential is large.

3 Mobile Ad PIE: Source: IMRB International Business Overview: airtel recently stepped in this segment to help brands discover the power of mobile advertising. To deliver an efficient advertising experience to both the end user & the advertiser, airtel has taken pioneering steps by building a state of the art advertising platform which has integrated advertising inventories across platforms such as SMS, MMS, Voice portals, WAP, USSD & DTH. Airtel had two choices to decide the business operations model for mobile advertising. Model 1: In-house management of sales and operations: Would have required building a complete team of sales, media planners, creative, operations team and in-house inventory management. Model 2: Outsourcing the business operations on the well established revenue share model to ensure rapid scalability. airtel chose the latter. A business operations partner was selected on its ability to bring in deep experience of advertising industry and a sound strategic understanding of mobile advertising. The partner deployed resources for sales, ad-platform operations and analytics.

4 The existing business operations setup is depicted below: Current Situation: Marketers consider traditional media as staple diet though digital has now started making serious inroads. Digital in India has evolved & thrived on its ability to reach younger audience with response based advertising. This ability has led to selling strategies being based on cost per lead, cost per click & cost per impression. The same expectations are carried by marketers and media agencies when it comes to using mobile as an advertising tool. Advertisers are struggling to cope with this new beast (m-advertising) which they know is a powerful tool but they don t know how to deploy this to meet their communication tasks - be it the inventory/platform on mobile or the message to be used or be it the way to measure it return on investment (RoI). By virtue of its pin-pointed targeting and ease of measurability, various models for pricing have been used by airtel to deliver campaigns. These models are primarily the same as being used in digital advertising viz. Cost per Mille/Thousand (CPM/CPT) impressions, Cost per Click (CPC) or Cost per Lead (CPL).

5 Inventories for m-advertising: 1.SMS While recent regulatory framework has curtailed the use of this medium SMS still remains a very potent tool in the hands of marketers. The potential to use SMS to download apps, discover mobile wap sites or to serve mobile coupons is what airtel propagates to brands. 2. WAP This is an area where most brands want to make a connection with the young audience. There is now a greater emphasis on mobile sites, branded apps and mobile games. With millions of mobile apps being downloaded every year of which 90% are free, increasingly consumers are finding value in these for infotainment, travel related activities, shopping etc. While airtel serves advertising on its own wap portal (airtel-live), monetization of impressions on apps, games, mobile sites are currently controlled by the publisher themselves or aggregators such as AdMob, Inmobi, Vserve. 3. Voice Solutions: The limitations of mass media are brought in sharp focus in illiterate, media dark areas of rural India. Mobile with a penetration of more than 51% is the largest medium. TV s penetration is just 34%. The opportunity to offer voice based advertising solutions is vast. airtel is monetizing its own IVR services & out bound dialers (OBD s) to reach out to rural areas. 4. Audio Visual content Mobile advertising inventories like MMS thrive amongst consumers but find few takers within the advertising industry. 5. Mass Reach inventory airtel has started deploying advertising solutions on End-of-Call-notification, that all prepaid customers receive post making a call. This inventory has the potential to build rapid awareness & massive reach in a short span of time. 6. Location Based targeting airtel is deploying solutions which use location based targeting for highly contextual and hence effective campaigns.

6 The Opportunity: Mobile advertising can offer specific solutions in the entire buying cycle of a product or service. Mobile solutions are versatile. They can range from eye-balls to actually help drive footfalls. ANALYTICS THE DIFFERENTIATOR The single biggest differentiator between mobile and all other media is the ability to profile and target the consumer with great precision. Attributes such as ARPU, handset owned, data usage etc can yield rich segments for delivering better ROI. MOBILE -- A GREAT MEDIA MULTIPLIER Mobile adds reach to an advertiser s media plan, especially for light mass media consumers, such as youth, who are difficult to catch with print/dailies or even TV. Mobile adds frequency, adds to the OTS a campaign is delivering. Mobile adds impact. The mobile phone is always within reach. Most SMS s are opened within 4 minutes on an average.

7 Current Situation: With all these characteristics one would think that mobile would be the preferred medium but it has not yet caught the fancy of advertisers. M-advertising is still at a stage where internet advertising was a couple of years ago. Everyone thinks it is good to do, but no one wants to take the first step. APM & the sales team, backed with a planning arm, are in touch with the Top 10 leading media agencies and media resellers. He is also in direct touch with leading brands in high spending categories such as Handsets, Auto, Banking, Financial organizations, FMCG, White goods etc. His own analysis of the situation is: The process from initial proposal to conversion is taking time. The brands which are interested do not want to commit spends before doing pilots. The decision makers in media agency are usually form digital background who evaluate mobile from the lens online advertising undermining the use of m-advertising. Pricing for mobile inventories like SMS, EOCN etc. are dismally low and therefore the potential is low. TASK What specific actionable will you recommend to APM in his selling efforts, to gain a disproportionate share of the mobile ad pie?

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