Earning better revenues out of mobile content and services

Mobile VAS revenues in India are estimated at $ 1 billion (end of ’07) and is growing substantially year. But everyone on the ground knows the realities very well.

  • Much of that money goes to operators (60-70%). A large chunk of these earnings are pure SMSes and music based services
  • 50% of what your aggregators is actually more like 12% of the actual sale price (not including tax deductions). Why? Because aggregators get only about 25% from a carrier and 50% of that 25% revenues is about 12.5%. Some of them re-publish to other aggregators (the chain of middlemen continues) thereby reducing the overall ROI for the publishers
  • Much of that money never actually comes back to the content developer (minimum $100 revenue earnings, $25 required to wire this to you). Transparency is low in this business.
  • Getting a product / service launched with a carrier (no matter how compelling you think it is) is next to impossible.
  • Even if they do agree to partner with you, it would be purely on exclusive basis, no one wants to sign a contract and the carrier, aggregator will never actually commit, how much of funds they will commit to A&P.

And so what really is the scenario of the marketplace? With a large developer pool, India has barely scratched the surface in terms of realizing VAS to its true potential. There are a few cutting edge mobile services that have actually been commercial hits. Those companies who are successful have been mostly peddling ringtones, bollywood & cricket premium content, IVR services (call us and we will rip you off at Rs 6 per minute). A few offer managed services to telcos.

The real issue

Operator stranglehold over the ecosystem is one big issue. The established business model (pay for everything) is another. Today – mobile content and services ecosystem is where Internet was several years ago.

Is mobile advertising an option?

Mobile advertising is an important alternative option. A larger addressable audience (170+ million), and the fact that mobile phones are very personal and ubiquitous is driving advertisers to try mobile advertising. Today, mobile advertising is the answer to mobile content developers’ and publishers ‘woes. A sustainable revenue model, carrier independent and better revenues are drivers for mobile publishers. The success of Admob internationally has shown that mobile advertising works.

Mobile content developers should start early and realize the benefits of alternative revenue stream. This would not only help them to focus on their products, and launch innovative products and services in the marketplace, it would also benefit the subscribers. And, given the fact that the carrier is also going to gain by increased traffic and better ARPU’s, they won’t be complaining either.

Our Vision

At ZestADZ, our vision is to create this ecosystem of mobile services which like the Internet, provides free services, content, entertainment in return for strategically placed advertising. There is no such thing as free lunch but there should be free ringtones, free mobile email, free SMS and maybe even free calls.

ZestADZ offers a mobile publisher program that enables mobile publishers to tap into mobile advertising as an alternative and viable revenue stream. To know more information email us at publisher [at] zestadz dot com or register as a publisher at http://www.zestadz.com

Though we are at very early stages – a few months into the beta, I am glad to say that we have signed up several advertisers and making substantial progress every day.


12 thoughts on “Earning better revenues out of mobile content and services

  1. what guarantee is there to the advertiser that what the end user gets in his mobile(ads) will be converted to sales. an advertisement in print or tv is very colorful. it has celebrity endorsement, it is vibrant. it is not such a case with sms, is it?
    so when there is no concept of flexibility or creativity in branding, how will the advertiser hope to capture the minds of young indians, which essentially comprises the indian mobile market today?

  2. The simplicity of Google based text ads and its technology (contextual placement of advertisements) have changed that whole concept upside down in the US and have made Google one of the most dominant forces in the advertising industry.
    Television advertising is more passive and its targeting isn’t always accurate. And, I will tend to disagree that you need a rich media (like TV) to make an impact to a consumer.
    In television or print, there is again no guarantee of responses, whereas on mobile (SMS, WAP etc) – by providing advertisers to pay only for clicks or Calls (PPC), we can help the advertiser derive better benefit.
    Contextual placement, location specific targeting and the fact that the mobile phone is a ubiquitous & personal device in everyone’s life today are reasons why it wouldn’t be tough to to capture mindshare.

  3. Pingback: Earning better revenues out of mobile content and services | Mobile world

  4. but will the indian consumer with tradional thoughts be open to such technology? we are a emerging market and wont it take some time before your company can make a big lasting impact?
    however, i am very much interested in the new platform your company is offering.would like to know more about it.

  5. Its not really about embracing a new technology isn’t it?.
    SMS has been around for a long time, and WAP sites are becoming common as well.
    Our ads will be embedded in the media that the customers are well used to – SMS, WAP and Java games and applications

    Hope this helps

    Asif Ali

  6. can the end – user choose the ads he would like to see?
    will the advertiser have the permission from the end-user who receives those ads?

  7. Nope – the end user doesn’t decide what ads to see and what not to see.
    The marketplace decides (automatically) what ads to show and not to show, thought that can be restricted by publishers.

    Asif

  8. Hi Asif,

    I really like the technology that you’ve come up with and the self-serve marketplace definitely seems like the way to go especially after seeing the success of admob and now maybe google.

    What i am not too sure of is the amount of traffic in India on WAP. It doesn’t seem like there are too many WAP sites with indian content that drive users to their sites. Even online content really needs to develop before ad-networks can make significant money. I read in a post of yours that you had already signed up a few advertisers, which is great and congratulations, but how are you fairing in getting publishers/wap sites on board and is there significant demand?

  9. I agree with Asif’s hypothesis on the viability of the mobile as the advertisement medium. Today the GenNext – Cool Dudes live, talk, laugh, cry & breath using SMS. So anything which is on mobile for them has a very high probability to be successful.

    Ad networks for Mobile have a bright future as long as they can fulfill their promise of providing right targeting, bringing transparency in pricing & revenue sharing and most important doing advocacy for this medium.

    Analyticsworks(www.analyticsworks.com) has been trying to solve most of the issues related to transparency using business intelligence.

  10. Hi,

    How does mobile application providers earn revenue from mobile advertising. I am doing a research paper and would like to understand the value chain. Whatis the %age cut of revenues that is earned by the network operators, advertising companies, advertisers and mobile application providers. Am I missing any others in this mobile ecosystem? Any help will be highly appreciated.

    Thanks!

  11. Rakesh,
    Mobile application companies can earn revenues by embedding CPM banner or CPC text ads within their applications using ZestADZ. Though we readily support J2ME, we are working to support Symbian and other platforms soon.
    For SMS / WAP the process is straightforward as readymade API can be embedded within their applications.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s