–Contributed by Rohit Kaul

“We are at the cusp of a radical shift where consumers want the convergence of lifestyle and work style on a mobile screen. Whoever fulfils this need takes the market share”. Thus said, Sumeet Gugnani, Director, Mobile Communications Business, Microsoft India recently.

With an existing mobile user base of 288 million which is expected to rise to 650 million by 2012, the “mobile marketing” looks like the next holy grail of marketing warfare for the leading internet companies. As mobile phone manufacturers continue to roll out new models at frantic pace which are enabled to access internet, mobile phone content generation and advertising is expected to assume much larger proposition then it does now.

But first a reality check. The global mobile marketing and advertising market is estimated to be $ 3 billion in 2007 which is expected to grow to $19 billion by 2011. However most of these revenues come from the matured markets like US, Japan and Europe and India’s contribution is almost negligible. In fact of the total revenues of the telecom operators and internet sites in India, only 0.5 % is contributed currently by mobile ad revenues. Bad news?

Now the good news. At present around 60% of handsets in India have internet capabilities but only 10 % of the total subscriber base is using them. This means a huge untapped market for the current and new players which can result in a huge revenue stream in near future. But still the telecom service providers and internet companies like MSN, Yahoo, Google et al need to develop a clear strategy to monetize these opportunities.

Some of the challenges which stare in the face and might upset the cart are:-

• Bandwidth issues plaguing the Indian mobile scenario. Current downloads on mobile phones are slow and may become even slower as more subscribers start using internet features on mobile. Is 3G the solution?
• Adapting the websites to fit into the mobile screen. Most popular websites have come out with mobile phone versions like m.orkut.com, wap.indiatimes.com etc. These sites are quick to load and content is easy to read on the mobile phone screens. Still more work needs to be done here.
• Creating relevant advertising for users. The advertisements scrolling on the mobile screen will take up more space in percentage terms as compared to the computer screen. Thus to maximize returns the advertisements have to be made very relevant based on the profile of mobile user logging into the site. For example a farmer in Punjab logging into yahoo mail on mobile may see an advertisement of a commodities exchange but a university student in Delhi doing same at the same time needs to see advertisement of a sale in nearest mall.

The internet companies are aware of these challenges and working quickly to develop solutions which will help them to gain a larger pie of this market. Current strategy of the major players (MSN, Yahoo and Google) is two pronged – forge a tie up with a leading service provider (Yahoo-RCom, Google-Airtel, MSN-Vodafone) and then launch quick win, innovative solutions for having first crack at the user. These solutions will not be only mail or chatting but a very comprehensive bouquet of services like picture sharing, video sharing, maps, etc which makes the company’s webpage the default choice or in slightly more technical language “home page” for the largest possible number of users.

So in this light what should be the strategies for the leading players in the online space? We take a shot at it and try to explain keeping in mind their current strengths and weaknesses.

• Google: Google built up an entire empire based on a simple search engine. Wrong! Google built up an entire empire based on cutting edge innovative applications which they provided for free to the users. This will remain Google’s forte on mobile also. They already have a huge user base of GMail, Orkut and other associated sites who will definitely like to access those over mobile as well gving Google a head start over rivals. But the trick for Google lies in not only replicating its existing applications available on PC to mobile phones but launching, developed from scratch mobile phone applications which will then lead to advertising revenues.
• Yahoo: Having already taking a huge beating in the PC based online space, mobile based online space may become Yahoo’s saviour. But only if Yahoo is alert to its key differentiator against leader Google. It should accept that search is not going to come back to it. So it needs to focus on something else. Whats that? Looking at places where Yahoo is still nudging past Google are Yahoo groups, Yahoo answers, Yahoo finance. So what does it mean for Yahoo? Blend search with content, user generated content. Content has always been Yahoo’s forte which it unfortunately forgot. Looking at the mobile phone space, can I quickly log into Yahoo answers through my mobile and post a query regarding prices of Car Stereo systems in New Delhi while I am standing outside a car accessory shop and get a quick response on the same? The answer to this might just shape Yahoo’s future in Mobile marketing.
• MSN: One of the first movers in the PC based online space which has not been able to get back to its Hotmail days post launch of GMail. MSN needs to think differently for mobiles. It needs to think less razzmatazz, more relevant content, less spam and more openness in sharing applications with the users. If today MSN comes out with an internet explorer specially for mobiles which is “in reality” faster than existing browsers for mobiles or develops customized application for mobile based video, photo sharing which are again “in reality” faster than existing applications, I might be willing to give it a try. So MS needs to do what MS does best. Develop strong applications.

All said and done, mobile marketing space looks exciting and we are watching it keenly. Like right now I have just logged into my mail account on mobile and have been greeted by a banner ad selling sports shoes. Am I going to click ? Lets see !

Reference: Small Space, Big Battle, Outlook Business, July 26, 2008.