Advertisers eye better reach through 3G

Targeted ads on mobiles will help small businesses the most, say experts.

The advent of third-generation (3G) mobile services will, besides ushering in faster data transfer, provide huge advertising opportunities.

The current online mobile advertising market in India includes broadcast SMS, brand jingles as caller ring-back tones (CRBT), product placements in mobile phone games and banner advertisements on internet that can be accessed through mobile phones.

However, 3G services will bring better video quality and faster internet access that will enable easy viewing of advertisements, short ad clippings and jingles, all three of which are till now restricted to television and internet.

Internet advertising, which accounts for 1.8 per cent of the country’s total advertising spend, stands at around Rs 300 crore. It is slated to rise by 3.1 per cent in the financial year 2008-09 and by 7.1 per cent in 2010-11.

However, advertisers can reach a far larger audience using mobile phones, whose numbers are growing by about 7.5 million (both CDMA and GSM) per month. There are just under 300 million mobile connections at present.

“Though the base for this medium is relatively small right now, with the coming of 3G services, this could witness a boost of 150-200 per cent. It is expected to reach Rs 65-70 crore by the end of this fiscal, from Rs 35-40 crore last year,” says Vinod Thadani, regional mobile director, GroupM Interaction, South Asia.

“Mobile advertising is growing at a very fast pace and I reckon it will cross internet advertising in the next 2-3 years. It enables advertisers to provide consumers a complete package,” he adds.

The medium enables advertisers to reach out to specific audience. “So far, video advertisements have been mainly broadcast or fairly generalised, but the mobile medium will enable targeted advertising based on the profile sent by the operator,” says Kaustabh Kashyap, head (product management), mLifestyle, Bharti Telesoft Ltd.

This will open up opportunities for small retailers. “This mode of advertising is specifically targeted at the end-user, so it helps generate more sales, more volumes and better returns on investment for even smaller retailers,” adds Kashyap.

“The content will have to be specifically designed as you cannot have the same time-frame that you enjoy on other media. But given that the content will be available in a more rich manner and better streaming of videos, it is bound to bring in more advertisers,” said Pankaj Sethi, Value Added Services, Enterprise Market Planning, Tata Teleservices Ltd.

However, analysts say the penetration of the 3G services will take some time.

Romal Shetty, executive director, KMPG, says, “Even when 3G comes in, it will not make a sudden impact as advertisers will wait to see the response the 3G services get.”

Shetty says such advertising will be event-based to begin with and not necessarily for branding. His sentiments are echoed by Kashyap, who says, “These will be more of sales promotion activities than brand-based. Various types of new models will come up to attract consumers. They could subsidise phone calls and messages to lure the customers. They could also promote sales by offering discounts on products.”