Expanding mobile advertising through telco participation

Mobile advertising makes up just a small portion of the online advertising market. Yet its potential is high due to its ability to narrowly target consumers with interactive marketing and advertising offers, writes EN UZOR JR.

The effectiveness of mobile advertising and marketing appears to have become more efficient than traditional methods. A global company like Coca-Cola is turning to mobile advertising to encourage brand adoption and loyalty.  Writing in a blog for the Jerusalem Post, Levi Shapiro, Professor in the Media Innovation Lab at IDC, gave lucid insight into how soft drinks giant – Coca-Cola, plans to double its revenues to $200 million by 2020. Naturally, mobile marketing is going to be a core part of that strategy because the drinks company has realised, of course, that if it wants to achieve its goal, then significant growth has to come from emerging markets like Nigeria and mobile is the ideal media for reaching such potential customers.

Over the years, the cost of traditional advertising strategies has continued to rise. In spite of this, the efficacy of these methods appears to be on the decline. Industry analyst have said that smart entrepreneurs and organisations who place business growth as key priority are certainly aware of this trend and paying keen attention on developing innovative mobile ads strategies that are cost-efficient and effective at the same time. That said, Nigeria is gradually beginning to witness a shift from traditional to digital advertising and marketing. Kim Macllwaine, chief executive officer, Africa and Middle East, TNS confirmed this, saying that digital marketing especially on the mobile will grow exponentially in Nigeria going forward. He noted that TNS, a marketing research firm, once a year carries out a study known as ‘Mobile Life Study’ across 43 countries Nigeria inclusive, with a specific focus on how people use their phones.

Drawing inference from the findings of this study, Macllwaine revealed that many companies in the country are commissioning studies with the intention of ascertaining what Nigerians do on the Internet via their mobile phones and consequently how they can better leverage that for marketing development. Currently, mobile advertising makes up just a small portion of the online advertising market. Yet, its potential is high fundamentally because of its ability to narrowly target consumers with interactive marketing offers any time. Industry analysts expressed confidence that the potentials inherent in the sub-sector appear high especially when it is considered in the context of the expected development of mobile applications.

Nigerian market

The mobile advertising market in Nigeria has recorded some levels of development in recent times due to the explosive growth in mobile technology. In the last decade, telecommunications operators’ subsequent to the sector’s successful deregulation and liberalisation raised the subscriber base from 400, 000 active lines in 2001 to the current 99.14 million as at the end of March, 2012. A research conducted by InMobi, a leading independent mobile advertising network in the world, reveals that mobile media consumption continues to grow exponentially in Nigeria and, indeed, across much of the Africa. The report, which was made available to journalist recently, reveals that 37 per cent growth was recorded in mobile advertising impressions in Nigeria for the first three months of 2012. With more than eight billion advertising impressions in the first quarter, Isis Nyong’o, vice managing director, InMobi Africa, revealed that Nigeria has become Africa’s largest mobile advertising market.

According to her, the consistent month-on-month growth in mobile advertising impressions is evidence of the rising importance of mobile technology as a marketing medium. She said: “The stellar increase in impressions from 5.8 billion in the last quarter of 2011 to over eight billion in the first three months of 2012 is a clear proof of the rising popularity of the medium among Nigerian consumers and shows that marketing professionals and brand managers across the country are increasingly embracing mobile media as viable and effective advertising channels.” The figures, Nyong’o said is coming on the heels of an unprecedented 376 percent growth in Nigerian mobile advertising impressions from 2010 to 2011. This, according to her, demonstrates that growth in popularity of mobile ads as a consumer medium in the country.

In the same vein, Macllwaine observed that businesses and organisations in the country are increasingly spending significant parts of the marketing and advertising budget on digital marketing. “I know five big clients of ours in Nigeria who have asked us to do specific research and studies into digital marketing. These companies however want to know specifically what the consumers are doing on their mobile phones. “There is a huge explosion for digital marketing research and what that leads to is that companies are spending more and more of their marketing budget on digital marketing. There is a very large client of ours that is planning to spend 25 per cent of its marketing budget for 2012 on digital marketing”, he stated.

Smartphones drives growth

According to the research, smartphone technology is showing clear signs of growing popularity with approximately 10 percent of all mobile advertising impressions recorded on the Nigerian InMobi network from these devices. This represents quarter-on-quarter growth of 42 per cent in smartphone use, pointing to the rapid adoption of this technology by growing numbers of Nigerians. From a usage perspective, the research confirms that Nigeria, like many other emerging markets, remains highly mobile-centric, with the average mobile web user surveyed spending up to 5.5 hours engaged with media every day – up to two hours of which involves their mobile phones. Nyong’o says, “Interestingly, mobile usage appears to be competing directly with traditional media or a share of the attention of consumers.

With 15 per cent of those surveyed saying that they multi-task on their mobile devices while watching television.” The research also revealed that, for many consumers, mobile devices are the vastly preferred channel for the purposes of communication, entertainment, obtaining information and, even, online shopping. In fact, 67 per cent of those surveyed cited their mobile phone as their primary or exclusive means of online access. 63 per cent of those surveyed also pointed to mobile technology as the primary influencer of their purchasing behaviour. Ease of use (47 per cent) and privacy (31per cent) are the two primary reasons mentioned for this preference for mobile online technology. But interestingly, industry analysts believe active participation of telecommunications operators (telcos) in the emerging ecosystem will further expand the scope of the sub-sector. Some telcos have seen the potential in mobile advertising and beginning to take advantage of the opportunity there-in.

Telco participation

Mobile Network operator, MTN Nigeria in strategic partnership with Brand Edge Communications has opened up its network to advertisers in Nigeria. This move, according to MTN would enable advertisers and businesses leverage its over 40 million subscribers in order to get their advertisement to targeted consumers. Tagged MTN Mobile Ads, the new solution offers cost effective means for brands to directly target advertising to mobile phones of prospective customers in a more assessable manner than other channels provide. Speaking at the unveiling of the MTN Mobile Ads, a new platform for mobile advertising, Babatunde Osho, chief enterprise solutions officer, MTN Nigeria, pointed out that the telecoms company’s decision to open up its platform ahead of all other countries where the MTN Group operates is essentially to drive enterprise growth and development in the country via technology. 

With a subscriber base of over 40 million already profiled individuals whom brands can target advertising in a cost-effective and measurable manner, Osho pointed out that MTN Mobile Ads offers “a cost effective means for brands to directly target advertising at the mobile phones of prospects and customers, who need their products and services in a more measureable manner than many other channels currently provide.” Explaining the various mobile advertisement features the MTN Mobile Ads, he explained that the SMS, which are text-based mobile advertisement that request information from the customer; SMS Flash Messages, which are text-based messages that pop up on the screen of a user’s mobile devices; and Rich Media, which allows the full complements of video, sound , picture, animation and  text.

Other forms include Location Based mobile advertisement, which are used by organisations to target customers who are in close proximity; USSD Flash Message mobile advertisements pop up on the phone of the recipient making them impossible to ignore; IVR advertisements, which are jingles played to customers calling the MTN Call centre as they wait to be attended to and Caller Tunes, which are jingles played to callers and organizations who sub-scribe to the services. Speaking in the same vein, Femi Akinwunmi, creative director, Brand Edge Communications told Business Day that mobile advertising has been in existence for quite some time now, adding that there had never been a technology to drive it like the way MTN has done. He said that advertising and marketing have currently gone beyond traditional media.

“There is need to engage target market directly. We have been working assiduously to convince the mobile networks operators to come onboard. MTN has taken a bold step in the right direction. “Driving mobile advertising will make more sense if telecoms companies participate actively and invest in requisite technologies and platform development. “What my company does in this ecosystem is to create and develop the right materials which brands can use to reach out to their target market. If the networks are driving the technology themselves, it makes more sense. When we got the go-ahead, it was shocking that a network can take up the challenge to want to open up its network and invest in the right technologies to drive mobile advertising. “New media is the edge because it is more strategic and guaranteed.”

Targeted & Cost effective

Industry analysts believe there is need for other telecoms networks such as Airtel, Etisalat and Globacom to emulate MTN and participate enthusiastically in the ecosystem to further drive growth. But, what are the benefits of mobile advertising in contrast with traditional media? We might have touched on that earlier in our discussion. But for the purpose of emphasis, I would do a recap. The fundamental benefits of mobile advertising is that it can be much more targeted to your potential customers, instead of providing advertisements to a wide variety of people, most of which are not interested in what you have to offer. As such, the effectiveness of mobile advertising is much easier to measure. For instance, changes that occur as a result of traditional advertisements are difficult to track. If sales go up one day, you can’t be sure that it had anything to do with traditional advertising. In contrast, with mobile advertising, you can track every time an individual opens an advertisement on his or her mobile phone.

This would invariably assist in providing a clear understanding of how efficient your marketing campaign really is. Besides, mobile marketing campaigns are quite a bit less costly than more traditional methods. Part of its cost-effectiveness lies in the nature of the medium. Firstly, it is easier to make copies of digital information than to print a bunch of advertisements in the phone book. But more importantly, the cost effectiveness of mobile advertising is primarily because it is targeted. Mobile advertisement can be between five and forty times as effective as traditional advertisements. Lastly, the ease of tracking results makes it easier to stop wasting financial and human resources on marketing strategies that are not working.

Ladipo Nylander, general manager, enterprise marketing for MTN Nigeria told Business Day in an interview  that advertising today is very expensive, further adding that most corporate organisation are earnestly looking for new ways to reduce advertising cost whilst making it more targeted and strategic. “It is cost effective and widespread. People nationwide can receive it. More importantly, you get reports from mobile advertising. If I do a radio ad for instance, it is difficult to get a report that can give me actual figures on who received it, where they received and how they received it. It is difficult to know the performance of campaigns. I have done campaigns and I struggle to find out how successful it was. With mobile advertising, you get real-time reports of every campaign. So, it is engaging and much more interactive”.   

But, what does mobile advertising mean to media agencies? According to Nylander, “MTN Mobile Ads offers a broader range of channels to advertising agencies to deliver their clients messages to their target market; deliver richer, more effective integrated marketing communications media plans developed for clients while offering an additional revenue stream. “This is another channel corporates can use to advertise their product and make it specific and targeted. They can also go further and profile. For instance, I am selling a soft drink and I want to get it to the youth segment. I want to go to the youth market in this particular location that has this particular interest. MTN can provide that data of subscribers that meet that particular need so that they can target those specific customers only. “Unlike having a billboard, radio ad or TVC that is hit and miss. It is not targeted to a profile audience you want to reach.” 

Conclusion

At present, mobile advertising makes up a small piece of the overall digital advertising pie. Analysts expect, however, that by the end of 2012 it could make up 10 percent of all digital advertising, a pie that is itself growing rapidly. Advertising networks, Internet players, specialists in mobile ad technology, and systems integrators, too, are looking to build a strong position in the mobile advertising value chain in hopes of capturing a significant portion of this new revenue stream. At that level, mobile advertising will become a natural complement to traditional media channels, with the potential to boost revenues enough to help fund other projects—if telecom operators are prepared to reap the benefits.

According to industry watchers, if telecom operators hope to win in mobile advertising, they must take advantage of their large networks, in-depth customer data, and strong relationships with subscribers to defend their position within the mobile advertising value chain. Doing so will involve both competing against and partnering with the many other players looking to build their own positions. And they must overcome challenges surrounding privacy concerns, overly intrusive ads, and legal restraints on sending ads to subscribers who haven’t agreed to receive them. If telecom operators can do so, they will have access to a new source of high-margin revenues that will allow them to build additional digital services businesses.