Advertising via mobile phones

The mobile phone as the pitch goes could be the most powerful marketing tool ever invented. Until recently, however, the cell phone has been mostly about talking the talk (or texting the text). Now, from an advertising perspective, there are signs that they may be starting to walk the walk.

Worldwide, there are twice as many cell phones as PCs as seen in developing countries. In Sri Lanka too this trend is seen with almost 17.3 million mobile phone subscribers, which gives an idea of the changing lifestyle of a Sri Lankan consumer. With technology developing, most new phones can provide access to the mobile internet, which also indicates the power of communication via modes like Facebook, Twitter or even just email.

For a marketer of today, who want to know more and more about their audiences and how they spend their days, cell phones can even one-up the old fashioned wired internet: Not only can they track users’ online clicks, they can trace their steps too, making it possible to home in ever more closely on target audiences.

Despite the obvious potential, however, advertising via cell phones has been slow to develop, except in Japan and South Korea in the hospitality industry. One reason for the sluggish take up of content services delivered via high-speed wireless networks. In Sri Lanka as per Wireless Intelligent (WI) there are 1.9 million mobile broadband subscribers and 0.2 million fixed board band subscribers.

However, one limitation globally is that cellular operators are reluctant to yield the equivalent of television or website ratings for their mobile media offerings, frustrating marketers who crave ‘measurability’ when buying advertising space and time.

SMS

SMS-based campaigns have become very popular mainly in the global hospitality industry, inviting consumers to request product information or to register for content via text messages. This is particularly effective in reaching niche audiences in the urban markets. However, because of the fear of spam, regulators and mobile operators have required advertisers to limit their customers who ‘opt in’ in certain developed markets.

If text campaigns have dominated the first phase of mobile advertising, then in the near future we will see a new stage of development. Several big European mobile operators, including France Telecom, Orange and Airtel in India, have started selling banner ads of leading hotels on their wireless media portals. Several US cellular carriers, including Sprint, Nextel and Verizon Wireless, which initially resisted such advertising for fear of offending customers, have also been testing banner ads on their mobile web portals. Operators are also experimenting with short video ads, called bumpers, to accompany video clips and mobile TV.

With Dialog launching 4G into Sri Lanka, it’s going to be only a matter of time where see the same product getting diffused in the market. I strongly feel the hospitality industry needs be ready exploit this medium wisely given the downturn in the European economy, due to which internal tourism will have to take centre stage for corporate Sri Lanka. But this cannot be turned to room nights if the locals will have to pay more than the tourists like what is happening today.

European experience

Operators like R-Mobile of Germany and Vodafone have meanwhile made deals with online search engines like Yahoo and Google, promising to expand the lucrative world of search-based advertising in to the mobile realm.

With the current rebranding strategy of major hotel chains in Sri Lanka and the access of customers to book via their websites, we can see the opportunity this medium will have for Sri Lanka. While the search engines already operate mobile sites, the new deals bring them into the ‘European cellular operators’ walled gardens, within which most mobile web traffic has been confined. Interest in so-called text based campaigns also seems poised to grow.

In my estimate this sector will grow by five-to-six-fold in such activity next year from the levels of this year. Sri Lanka has already seen a 30% growth last year in the mobile phone industry. However, we have not seen the text-based campaigns gathering momentum in Sri Lanka except for a few credit card companies.

Once again I strongly believe it is a matter of time, when other media costs increase, for marketers to use these mobile phone campaigns to drive reminder campaigns, especially by the leisure industry. I just got a message from one such credit card company and my undivided attention was captured for 10 seconds, which even TV could not do for the last week. This tells us a lot about this medium’s potential.

Future

Analysts acknowledge that forecasts for the growth of mobile marketing and advertising are just educated guesses, but in the US alone the market will be $ 1.5 billion by the end of 2011. Some telecommunication executives are sceptical about the potential, warning that consumers will resist efforts to intrude on their intimate relationships with cherished mobile phones.

It’s not something that will revolutionise the industry or that will change our business model but mobile operators must test new business models given that Sri Lanka is experiencing economic growths of eight per cent plus and commanding the global landscape to be a top 30 country in the near future. After all we have jumped from rank 79 to 52 in just two years. So maybe we can show the world the power of advertising via a mobile phone.

Globally, mobile phone associations are trying to smooth the development of mobile advertising by creating uniform standards for ads, making it easier to run campaigns across a variety of operators’ networks, mobile operators and networks. Some are working with media owners, media agencies, mobile operators and companies like agencies that specialise in measuring this new communication vehicle.

It’s definitely a promising market, but I feel a quite a lot of issues need to be resolved before it steals advertising rupees from radio, outdoor, print and online.

(Rohantha has a double award at the ‘Marketing Achiever Awards’ for Sri Lanka, ‘Business Achiever Award’ – University of Sri Jayewardenepura and Global Leadership Award from Johnson-Lever. He has been the country representative at the ‘World Marketing Forum’ – UK, GSE Scholar to the US for Rotary International and is an alumnus of Harvard University-Boston.