How advertising can build
mobile revenues
Still in its infancy, the mobile is the fastest-growing advertising
medium and is touted by many in the industry as a lucrative rev-
enue source. We look at how emerging market operators may be
affected and why they should be interested.
M
ost operators in emerging markets paigns and the ability to track results help
are primarily focused on meet- to solve an issue highlighted by a Rex Briggs
ing rapid subscriber growth by and Greg Stuart study in 2006 that conclud-
expanding network coverage and capacity. ed 37 percent of all advertising is “wasted.”
However, as markets mature and revenue
growth declines, operators will broaden
Benefits for lower-income
their business scope. Mobile advertising
consumers
could well make a useful contribution to A good example of how advertising can
their revenues. benefit lower income users is an innovative
The potential for emerging markets looks SMS-based service that is generating about
promising. Advertising is generally accepted 20 million messages per day for South Afri-
by people. Roadside billboards and small can operator Vodacom. “Please Call Me” is a
signs are commonplace and are used by free call-back service aimed at prepaid users.
major brands and small local enterprises. It allows a subscriber to send an advertising-
Emerging markets hold an advantage in funded SMS for free, requesting a call back.
their demographics too, with high propor- Similar services are being launched in other
tions of younger people, who traditionally countries.
accept advertising and who are likely to be “This is a great service for a mixed
Briefly stated:
the major users of mobile communications. economy, because you basically get to redis-
tribute wealth. It enables people with very
Mobile will dominate online
•
low income to initiate a call with a more af-
Mobile advertising is a ris-
Online advertising expenditure, as a per- fluent subscriber, for example, an employee
ing way for operators to develop
centage of total advertising spent, is rising, asking their employer to call them, without
their revenue base. Emerging
notes a report from management consulting incurring the cost of the call,” says Mr. Rick
market consumers are often pre-
firm Oliver Wyman in its white paper Bust- Joubert, head of mobile advertising and
dominantly the young, who are
ing the Myths About Emerging Markets. The social media at Vodacom, in a recent article
accustomed to advertisements.
report says that: “mobile advertising will be published in Mobiadnews.com.
•
Operator customer relation- much more important in emerging markets, Interestingly, the service is also a good
ships enable operators to lever- as the mobile phone is the first screen (and example of business transformation in
age their subscriber knowledge for many consumers the only screen).” which the operator sets up advertising as
to support advertising. As well as offering a new way to reach a separate business, backed by communi-
consumers, the mobile has the advantage cations and media expertise, and which
of focused messages. Highly targeted cam- addresses a new type of behavior with an
14 Expanding Horizons 3/2008
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