3G set to spurt ad revenues for telcos

KOLKATA: Telecom operators can expect a spurt in their advertising revenues with the launch of 3G services as top advertisers script plans to tap the huge potential of the medium that includes personalised delivery of audiovisual mobile advertisements with interactive features.

The third generation telephony, with high-speed internet speed and services like mobile TV and live gaming, has been a great driver of mobile advertising in all the markets it is available. The story is expected to be the same in India, justifying telcos’ spending Rs 68,000 crore for its licences.

“3G may completely redefine the media mix for Indian advertisers,” said Debadutta Upadhyaya, VP (India) for Vdopia, a US-based mobile video advertising platform that has done 3G mobile ads for clients such as Coke, Warner Brothers and Disney.

She said companies are currently not excited about mobile advertising because they cannot deliver the brand experience through bland SMSes and plain-vanilla WAP banner ads.

But 3G will allow much better delivery of more creative advertising content. And marketers are excited.
“A lot of the TV advertising can be replicated in mobiles through 3G, with far bigger impact. Mobile advertising in 3G will have scope for interactive and personalisation of content,” said L K Gupta, chief marketing officer of LG Electronics India.

The country’s largest consumer electronics and home appliances firm, which currently uses SMS-based ads to manage consumer relationship like after-sales service and loyalty schemes, plans to use 3G mobile ads for brand promotion, said Mr Gupta.

The size of the Indian mobile advertising market, estimated at $15 million, is growing by 50-60%.

Advertising industry people expect marketers to increase their spent on mobile advertisement to 7-10% of their total adspend from current 2-3% within two years of 3G launch.

It’s quite likely going by the experience in other countries. In Australia, for instance, the mobile advertising market grew by more than 300% a year since 3G launch in 2007. In the US, 3G ads pushed the mobile advertising market to about $416 million last year. In the UK, the entertainment, media and telecom sectors have spent the largest amount of their advertising budgets for mobile advertising, according to a study by PricewaterhouseCoopers.

“There is no doubt 3G can increase the value of mobile advertising to the advertiser provided the telecom operators are active,” said Sam Balsara, chairman and managing director of advertising firm Madison World.

The DoT estimates that 3G mobile subscriber base in India will reach the 90 million mark by 2013. A study released by research firm Crisil on Monday said there will be 100 million 3G users in the country within five years of its launch.

A slew of marketers such as Marico, electronics firm Samsung and jewellery retailer Geetanjali Group have big plans for 3G.

“3G will be a big enabler and improve access,” said Sameer Satpathy, marketing head of FMCG firm Marico.
Samsung plans to take its mobile advertising campaigns from metros to smaller cities with 3G, while Geetanjali will increase the share of mobile advertising several folds from less than 2% of ad budget at present.
Telcos too are gung-ho. “We will strive for such (3G advertisement) revenue once we have been able to deliver great experience to the consumers,” said Llyod Mathias, chief marketing officer at Tata Teleservices, which has won nine 3G circles.

Vdopia expects 3G mobile ads in India to find bigger acceptance from FMCG, entertainment, auto, consumer electronics and technology companies. It plans to grow its 3G ad business as its main revenue stream in India and will roll out its global technology here.