Content providers seem charged to crack the mobile advertising code with services that bypass mobile operators. Will subscribers and advertisers jump onto the bandwagon?

Buzz around mobile advertising seems to be getting louder. Last week alone saw two new SMS-based services. Webaroo, founded by Rakesh Mathur (who sold his shopping technology company Junglee to Amazon), is creating a free group SMS service that will have short ads inserted into SMSes and mGinger is offering to pay people to read SMS advertising.

Interestingly, a majority of them are not willing to share the booty with mobile service providers. This is probably the first time that content providers are trying to break the mobile operators control over the entry point for value-added services. Telcos can typically retain 50% to 80% of the revenue, depending on the service or content being offered. Active Media, which claims to have run mobile marketing campaigns for over 500 brands. Will pay the SMS charges to mobile operators but not share the advertising revenue. Their newly launched SMS gup shup service encourages users to build communities around themes and forwards messages posted to this group as an SMS on all members’ phones. The service is free to users and will be subsidised by advertisements. mGinger goes a step ahead and promises to pay for subscribers who are willing to accept ads with their SMSes.

Will subscribers and advertisers jump onto the bandwagon? Beerud Sheth (Webaroo co-founder and CTO) is convinced that mobile advertising will take off even before online advertising makes its presence felt in India. He could be right. Internet is nowhere close to the kind of ubiquity enjoyed by mobile phones in the country. Compared to 45 million internet connections, SMS advertising has the potential to reach 170 million cellphone users in the country.

The equation, according to analysts, will boil down to the quality of customers they can draw. It is yet to be seen how responsive customers will be to these ads and how many advertisers will jump on the bandwagon. Most feel that these services need to build compelling content and then subsidise it with ads. Besides the group messaging service, several alerts like daily astrological prediction, news, jokes or job postings are on cards. Once they have the subscribers hooked, they plan to offer a choice between paying for the service or accept ads and get the service free.

And as the market matures, new business models will evolve. Subscribers could call advertisers by clicking on the ad or order through a special SMS code. Myriad of options are available. In China, for instance, two-dimensional bar code technology allows you to click a barcoded ad with your cameraphone and creates a physical hyperlink and turns your cellphone into a mouse pointer. The push technology thus is converted into where a user can make a choice.

Broadly, these ads can be served on-the-operator’s-portal, when advertisers can have access to subscriber information, like name, age, sex and the handset they use and services they subscribe to giving pointers to economic status and credit record. Another option is the off-portal services being dished out by the likes of Webaroo or mGinger that bypass the mobile service provider.

Insiders, however worry that a spoke in the wheel could come from telcos, the fourth angle of the subscriber-advertiser-content provider triangle. Mobile operators are obviously not enthused with the new business model and could block out these services.”They are the gatekeepers and can block any service to protect their interests” agrees Raj Singh. For now, content providers seem to be riding high, confident that telcos won’t pull the plug.


Source: Financial Express