Permission Marketing and the new Mobile Advertising Mantra in India

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Wikipedia defines Permission marketing as :

“Marketers will ask permission before they send advertisements to prospective customers. It is used by some Internet marketers, email/ telephone marketers. It requires that people first “opt-in”, rather than allowing people to “opt-out” only after the advertisements have been sent.”

Couple of days back, the Indian govt. imposed strict norms on unsolicited advertising, and any unsolicited calls/SMS invites a fine of Rs. 500/ (and the telemarketer could even face disconnection of services).
As govt. starts tightening noose around the advertisers, permission marketing seems to be the most viable options for advertisers to monetize the subscriber base (218mn, as per the latest numbers!).
So the next question is how do you get the permission to send ads? Well, companies have come up with very smart initiatives to lure the customers to receive ads.

Here is a summary of different approaches used by companies :

[Make Money, while your mobile beeps!]
mGinger:
Recently launched service, mGinger pays users to receive ads on their mobile . Users, after registering to the site, need to specify their interests and start receiving relevant ads.
Where is the money then? Well, for every ads that they receive, the user earns 20 paise and 10 paisa for referring their friends (no wonder why all of yahoogroups are being spammed with such emails).

Once you accumulate Rs. 300/, you will receive a cheque; and as per this date, highest single earning has been Rs. 99.40 (i.e. 497 ads!!).

[Free VAS, if you say ‘yes’ to ads]
SMS 2.0:
Pretty much on the lines of freemiumfree mantra, i.e. give away the basic service for free, charge for the premium ones; and again, make the premium free (supported by ads).

Launched by Bharati Airtel and Affle partnership (currently offered in Delhi region only), SMS2.0 platform enables free delivery of news headlines, movie trailers and promotions.

Here is how SMS 2.0 works (source)

When a subscriber turns on the mobile phone, SMS 2.0 is launched by default, but the handset can still be used in the same way when sending or receiving text messages. At the bottom of the mobile phone’s screen is an array of content banners — from news to astrology, travel and video — that the user can choose from if he or she wants to do more than just sending or receiving an SMS.

With this feature a user can key in a word or phrase just like composing an SMS message, click Search instead of Send, and be directed to a search engine such as Google or Yahoo.

SMS2.0 is a win-win situation for end users as well as operators – ARPUs are expected to increase by 10% (click-through rates on the SMS2.0 platform are almost 3 to 4 times of what is seen on the Internet), and the end users get to use few VAS services for free. [Source]

[The character(less) fight]
One of the concerns with the above mentioned service is that they don’t rely on the existing usage of the user (and aren’t really a as-you-use kind of a service). You need to change your usage behavior to use services like mGinger or SMS2.0.

But , following companies have taken a radically different approach with respect to permission marketing:

160by2.com
Using 160by2, you can send free sms to any mobile number in India, the only constraint being the 80 characters usage, i.e. you cannot send messages more than 80 characters in the length (since the next 80 characters will be utilized by advertisers for delivering contextual ads).

What I really like about 160by2 is it’s amazing UI and the clean interface. It’s a delight (and a possible case study) for any designer. The overall experience is really awesome, compared to the other services mentioned here.

way2sms
Quite similar to 160by2, way2sms also provides free text messaging absolutely free of cost (except that they allow 92 characters of message and the rest is used for ads). Way2SMS has a wider reach and boasts of a million user base.

What I really appreciate about 160by2 and way2sms ‘s approach is that apart from delivering ads, they are also providing a great service for free, i.e. sending free SMS across the country!.

Before I end this post, have a look at some market data:

  • mGinger boasts of 7,00,000 registered users within 2 months of launch.
  • 31% of the total users registered are students trying to earn extra pocket money.

Am I seeing something here? The 31% of registered users probably constitute the lowest level in ARPU chain and by any definition, they may not be even the target customers for companies who are using these channels to advertise their product.

Advertiser money going waste? The AdBubble 2.0 in making?

Moreover, don’t you think that such services end up as spam mails (mGinger is the newest kid in the spam mails @ yahoogroups, I have seen people y!grp blasting users who have attempted to spam with “join mGinger” spams), which also affects the service’s brand equity (my perception about mGinger has taken a hit!)?

Also, except for SMS2.0, other services are short circuiting the operator channel? Will it result in a clash?

What do you think is the right approach for mobile ad service? Free SMS or paid-to-see-ads? Do you think paid-to-see ads are sustainable?

Which service will you use? I’d love to know your viewpoint.

tags: mginger, sms2.0, , 160by2, way2sms

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