Targeted advertising over telecom networks

by Ashutosh Desai    Jun 07, 2010

Telecom is viewed as a means to take services to the masses. It is far easier to set up the infrastructure and provide solutions or services over-the-air to mobile handsets. Since communication here is one-to-one, it is also an ideal scenario for companies to advertise their products. With the proliferation of mobile phones (including smartphones), rising number of subscribers and cheaper call rates, telecom operators are looking at different avenues of advertising to boost revenue. Another reason for running mobile campaigns or ‘pushing’ nuggets of information to handsets is the availability of user data and ability to analyze their success/response. Atul Madan, VP (Mobile Advertising), Comviva, spoke to CXOtoday about these avenues of targeted advertising and its prospects for telecom operators.

What are the ways in which operators can a mobile phone to display advertisements?
As of now, there are four ways one can advertise on the mobile — it could be text-based, normal SMS for tag along advertising, white space advertising, IVR services, rich media, and idle screen advertising.

Advertisements can be in-service through advertising caller tunes and CRBT (caller ring back tones) or in the form of in-game advertising, thereby subsidizing the cost of the game. Another new channel for advertising is the use of the ‘idle screen’ advertising in which an ad is ‘pushed’ to the unused portion of the screen on a device. Advertising could be in the form of a ‘coupon’ or a useful beauty tip that adds value to a product and not necessarily ending with a sale. Pushing ‘coupons’ is still about a year away from being realized because mCommerce is still going through its own pains.

There is a catch with idle screens — there needs to be an application installed on the phone to receive ads. But no subscriber will download an application to receive ads. We need to think of ways to make this happen. For example, talk to TV channels to include mobile campaigns in their advertising roadmap, send reminders of their show to subscribers who are regular viewers.

Even ‘augmented reality’, can be used for virtual shopping. Users can select clothes and superimpose them on their own image. These have mostly been used on PC but now they are also being used on smarphones as well. But this requires 3G high-speed cellular networks.

With the introduction of 3G in India, will we see more rich content being used in advertisements?
Rich content will be more significant over a 3G network because you can super-impose an ad the way you would do it on TV or even use part of the screen to display the ad. It has even been tried in some countries. But in today’s context, 3G has still not arrived in India. Primarily it’s going to be voice and some to some extent text for the next 18-24 months.

Even if 3G arrives by the end of the year, it will take another year to have enough subscribers to be able to offer some value to them. In the next 12-18 months we are focusing primarily on voice and text but that does not mean we are not talking to operators for rich media advertising.

What sort of revenues are we looking at here?
Looking at the revenue side of advertising, the US and Japan have been very effective. Both these places recorded revenues to the tune of US $500 million and more. If you look at overall advertising in 2009, worldwide, revenues were estimated to be worth US $2 billion dollars. But $1.2-1.3 billion came from the US and Japan itself.

In terms of evaluations of the market in the future, there are varying estimates. It varies from US $12 billion to US $19 billion by 2014. It is still too nascent so estimates, which is why the estimates are widely fluctuating. Till today, operator’s earned roughly just ten percent from mobile advertising. This is a challenge and is set to change in the future.

What is the favored way of serving ad content to subscribers?
Ad-based RBT or in-service advertising is a favored way of serving ad content. We are in the process of launching these services with two operators in India. It offers targeted advertising as opposed to random advertising where the user is not profiled. Operators have detailed user profiles, these can be used to be send targeted content. For subscribers outside the operator’s network, gender neutral and localized ad content can be used. Tag-along advertising, where an ad is pushed into an SMS to make use of the unused character count, can also be used effectively.

Is there a particular trend in the kind of industries that are taking to this form of advertising/branding?
What I have seen is that financial institutions are very keen on trying out these things. They want to have one-to-one communication more than anything else. The automobile sector also uses it quite frequently. Others sectors that are big adopters are retail and insurance. The pattern is the same globally as well as here in India.

Interestingly, the FMCG has also shown interest and have used it in very creative ways. For example, they send tips on how to use their products. That brings in loyalty without really having to sell something all the time. This shows that the mobile advertising platform is not tuned to a particular industry segment. It depends on how creatively the segment uses the medium for its own needs.

Does Comviva work with ISVs?
Yes, we do work with ISVs. We are working with July Systems in India (they are Comviva partners), some companies from Finland and Philippines, which I cannot name as of now. We also have that platform in-house. Since there are a lot of different channels available — text, videos, voice, idle screen — user profiling needs to be done as well. This is not possible for a single entity. We use a lot of in-house solutions, work with ISVs to integrate with our solutions and then go out and pitch those solutions. Comviva also offers operators with end-to-end offerings. We bring in technology, operations and advertising relationships. We source those ads and push them using the operator’s networks.__RELATED_LINKS__