There was an interesting article in India’s Economic Times that confirms what a lot of people know already: mobile web is fast becoming the primary means of accessing the web for many people, specially in developing nations. India has 9 million internet subscribers against 31 million mobile internet users who use the mobile internet “to read and reply to mails, download content and for online transactions”. About 54% of new handsets sold in 2006 were internet-enabled according to the same report. The figures come from the Indian regulator, so presumably they are reasonably accurate. http://economictimes.indiatimes.com

Mobile advertising can be a new business idea for any mobile operator. In the concept of Mobile Advertising, the network operator can play the role to act like a medium for advertisement.

As is the case for a TV channel & a newspaper, a mobile can be thought of as a prospective and direct medium for the advertisers to reach and sell their product.

One TV channel or a newspaper can be shared by many people, whereas at a time one mobile is shared by only one person. This personalization characteristic gives Mobile Advertising to be the most promising advertisement medium.

Giving an advertisement to any TV channel or in a daily newspaper it is not possible to claim how many people actually view the advertisement. And so comes the hit rate. But of course if there is no technical problem then when a mobile promotion finishes the advertisers of course will know how many people actually viewed their ad. So from the advertisers’ viewpoint Mobile Advertising will be more quantifiable.

a. What facilitates the business:

• A large customer base.
• A huge amount of customer information (preferences, real-time usage, demographics/other data)
• Billing and payment relationships and capabilities
• call-centre and customer customer service

These assets give operators the opportunity to add value to advertisers by helping them:

• Target advertising more effectively as customers roam the web
• Track advertising performance
• Provide a response channel for customers (including payments)
• Support customers post-purchase

b. Scopes of Mobile Advertisement:

Several kinds of mobile advertising scopes are there which operator can provide to the advertisers:

(1) Push Based: Can be effective for running special campaign.

1.1. Splash Screen Ads
1.2. WAP Push Broadcast
1.3. MMS Broadcast
1.4. SMS Broadcast

(2) PULL based advertising

2.1. Banner Ads

c. Subscriber Response Models:

In two levels the operator can do the advertising business:

• Just reach the product offer to the subscribers & do not bother about the subscriber responses.
• Can reach the product offer to the subscriber and also provide them facility to participate in the offer (ie. Providing them the facility to response back through sending SMS or calling like click-to-call etc).

But to keep the model simple it is desirable to maintain point 1 as the standard, because then a general structure can fit all the different ad requests from the advertisers.

d. Business model parameters:

The following cost parameters can be considered:

Design & Development Fee: The operator can claim charge for the development of the ad page (may be advertisement WAP page).

Broadcast Fee: Advertisers may pay based on the number of persons received their product info through several channels (like sms, or ad page hits etc)

Conclusion:

Advertising is a huge revenue business. So what you think? Should the operators go for it?