Mobile Marketing : Reality check from emerging economies

29th October 2009
Mobile Marketing : Reality check from  emerging economies

Flytxt the India-based leader in Conversational Mobile Marketing, has used its newsletter, this month to focus on the   challenges that emerging markets  pose  to  the mobile marketing business. As the installed  base of mobile phones grows at nearly  14 million a month,  geographies  like India, are being watched with great attention  by the global telecom  value added services community .  We  bring  you  key portions from   the FlyTxt column, whose original can be found at
FlyTxt newsletter, Vol 2: Oct 2009:  

Mobile Marketing: A Trapeze act

By Anand Parthasarathy, Editor, IndiaTechOnline 

When the stakes are high, so are the challenges. The New YorkTimes quotes a recent study by Juniper Research, to report that the overall mobile advertising market will hit $6 billion by 2014, from $1.4 billion of today, thanks to the increasing traffic in markets such as India and China. In July alone, a record of 14 million new mobile connections were added in India, bringing the total to almost half a billion today --arguably the fastest growth, if not the largest, installed base in any one nation.

That’s a lot of loose cash waiting to be scooped up and clearly this is a huge opportunity for the Indian ecosystem of mobile service providers and value adders. Television advertising crawled – then surged past -- the print media, becoming the best way to reach out with one’s message to the Indian consumer. Now it seems, it is the mobile medium that is creeping up and nibbling at the edges of TV’s turf. The main mobile service providers, not just in India, have managed to leverage to varying degrees, across the areas of information, entertainment and m-commerce. But for someone like me, observing from the sidelines, it seems the whole business of mobile marketing is a case of ‘learning on the job’.

Indian customers unlike the other consumers are more mature. Those in urban concentrations have an attractive profile of consumer interests and spending patterns for the advertisers. Like prospectors, in the American West a century ago who yelled ‘There’s gold in Them hills!” and hot-footed it to the Yukon and other colourful places, advertisers seem to think that the mobile phone market is a mother lode waiting to be tapped. Their early efforts, smacked of the same freewheeling spirit, with hardly a thought for the customer’s rights or sensibilities: intrusive, unsolicited and unappreciated. No good business could grow out of such attitudes. And pretty soon, government regulators woke up, to put brakes on the marketing industry’s unbridled enthusiasm, with consumer-friendly measures like a National Do Not Disturb (NDND) registry to filter out unsolicited commercial communications.

Today, things are less frenetic and more sensible. Smart Indian customers instinctively appreciate, without necessarily being familiar with, the sentiment of that other earthy Americanism: “There is no such thing as a free lunch!” They are perfectly happy to receive commercial messages as a trade-off for services that in other geographies might not come for free, like games or market information. But judging how much is too much, now that’s an art in itself! How much mobile marketing will a customer acknowledge and when will it seem like spam? It involves a delicate balancing act, by service providers who have to work at it like trapeze artistes. The best of the breed easily traverse the high wire, pulling off lucrative campaigns. But many fall off, forced to make a deep dive to the safety net down below. Some initiatives have enjoyed notable success. 

- Customers are highly receptive to promotions like Top up alerts, free talk time offers and other loyalty campaigns such as money off promotions.

- Mobile VAS services like ring back tones, song downloads and astrology are becoming increasingly popular among both urban and rural subscribers. According to experts, content related to films and cricket, at present, experience heavy spots of advertising through mobile VAS. For Operators, this is a huge opportunity to increase ARPU without intruding into subscriber privacy.

- The stock market boom, coupled with changes in the provisions of personal income tax saw hundreds and thousands of ordinary Indians ‘play the markets’ or shop for compelling mutual fund schemes. They readily embraced stock market alert services, mutual fund NAV updates and the like. And as long as the accompanying ads were focussed on their primary interest, they had no problems with them.

In short, customers are receptive to marketing messages as long as they are offered what they might consider a free value addition, in exchange for receiving a marketing pitch in the same package, like free SMS, where the customer harnesses half the wordage, leaving the other half for advertisements. This has worked but the marketing model is usually more complex than that and I doubt there are many scenarios where Indian customers will go with this fifty-fifty arrangement. They have a fine instinct for ‘paisa vasool’ or value for money and are unlikely to play along with any arrangement that they deem exploitative.

On the other hand, Rural India may still sustain a ‘Gold Rush,’ simply because this is the last untapped frontier of the Indian mobile phone business. As city-based usage saturates, Bharat rather than India, shelters customers who are savvy enough to say: “I don’t care if it is someone’s message. I’ll listen as long as it makes sense to me!” This is predominantly true with regard to voice-based marketing which is considering innovative solutions to overcome the written literacy barrier that might challenge many of India’s next 500 million mobile subscribers.

Nokia, by far the largest handset brand in India, has just launched an ambitious scheme to tap the large rural market by partnering with a host of local information providers. Their pilot in Tamil Nadu offers weather alerts, cropping advice, market information about product and fertilizer prices, interestingly educating in English. The aspirations of India’s hitherto under-empowered rural millions may yet create the largest opportunity ever, for the mobile marketing fraternity.

As new 3G and broadband networks are put in place, the major spectrum auctions are due to be held before the end of 2009. These customers will hopefully have access devices where Internet and telephony seamlessly merge. That may well be the next challenge.

A study by Forrester Consulting states: “Two seconds is the new threshold in terms of an average online shopper’s expectation for a web page to load and 40 percent of shoppers will wait no more than three seconds before abandoning a retail or travel site.” Just three years ago, a similar survey found that users were prepared to wait, twice as long as four seconds for a page to load. Blame it on 3G or broadband, if you like, but the times are changing and the time-span toleration is also shrinking.

Mobile marketers have their work pattern catering to a new breed of customers whose zippier access speeds go hand in hand with the shrinking attention spans. Only the best and brightest marketers will survive.