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Thursday, February 24, 2011

Telecom Operators in India should take charge of Mobile Advertising


The more I think about it, the more convinced I am that telecom operators in India - and not ad networks, VAS companies, content creators or gaming companies – need to lead the mobile advertising charge. Advertising needs to become for them, a strong in-house function, with someone strategically working with agencies and advertisers, to figure out how to leverage advertising on the mobile. We know the reality of the telecom market in India – the average revenue per user, and more importantly, the average revenue per minute (indicative of tariff) has dropped to all time lows, where it is hoped to have plateaued.
There is a perceptible shift taking place in India towards data, and it is only a matter of time before data supercedes other Value Added Services. For some it probably already has. But there’s a problem: spends on data are cannibalistic, and from anecdotal evidence, we believe that, in a multi-SIM environment, the average balance in a prepaid account is between Rs. 20 to Rs. 40. Sure, there will be ‘Pocket Internet’ data only recharges, but I’m not sure if this mode of consumption will scale, especially since it requires a separate purchase each time.
In a media business, the alternate to subscription is Advertising, and telco’s need to start thinking of themselves as a media business, looking at another revenue stream to offset the crunch they can be expected to face. To do this, they do have their own advertising setup, one which works with their clients to offer customized advertising solutions, acquires content which they can monetize through advertising alone, or by using advertising to subsidize content.
I’m not saying that there aren’t VAS companies or agencies who can’t do this – many have tried, and some may have succeeded, but to a limited extent: it hasn’t scaled. You can’t leave it to ad networks, since they are typically bottom feeders if not doing site representation. The delivery of content and advertising can be outsourced, but right now, when both consumers and advertisers look at advertising on mobile with suspicion, as spam, it is important for someone in-house to ensure that the advertisers objectives are met, consumer experience is not spoilt, and most importantly, the telecom operators access/subscription business is not compromised. But it is important for advertising on mobile in India that telecom operators to put their weight behind it, as a strategic area of focus, and send a message out to doubters that mobile as a medium for advertisers should be taken seriously. It’s the only way mobile advertising will scale quickly.
Maybe a telco needs to take a long term punt and buy Mobile rights to the a Cricket tournament, make live streaming or live audio commentary cheap or free, and look to sell advertising.source

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