Media & Marketing

In India, Mobile Ads Mean Phone Calls


In India, Mobile Ads Mean Phone Calls

Illustration by Dan Woodger

In many parts of the world, businesses relentlessly market to customers via their Web-connected smartphones, slipping pitches into everything from interactive games to graphics-laden productivity apps. Not so in rural India: To better reach the country’s 833 million villagers, Unilever (UL) is delivering free Bollywood music to their basic cell phones via old-fashioned phone calls.

Between the popular tunes and cheesy jokes presented during the 15-minute recorded programs served up by Unilever’s mobile phone music service, users listen to four product ads. Consumers are biting: In March, at least 2 million people subscribed to the free service available in two states, says Anaheeta Goenka, executive director of Lowe Lintas & Partners, the agency handling the campaign for the world’s second-biggest consumer company. The service expanded to Uttar Pradesh, India’s most populous state, on March 31.

Companies from Unilever to PepsiCo (PEP) to Mondelēz International (MDLZ) are turning to mobile campaigns to win over consumers who live in locales where cable television or even newspapers may have limited reach. In a country where most people don’t live in big cities and 88 percent of phones aren’t smart, the tuneful approach makes sense because rural spending growth now exceeds that of India’s urban centers. And mobile phone ads cost less and are more targeted than mass media campaigns on the subcontinent.

“Mobile advertising has the reach, the power to measure, and the power of constant engagement,” says Girish Nair, chief executive officer of NetCore, the outfit that manages Unilever’s mobile service. “You now have the opportunity to get data on each subscriber” that can help optimize ad campaigns and improve distribution, he says.

There were 364 million rural mobile phone users in India as of Jan. 31, and the pace of additions in villages was faster than in cities for the fourth consecutive month, according to the Telecom Regulatory Authority of India.

“Many advertisers are starting to use mobile as a way to reach” areas with poor infrastructure in a cost-effective way, says Anand Thakur, national sales head for Aidem Ventures, which handles ad sales in India for TV stations and websites including MSN.com and Economist.com. A fleeting 10-second spot during the 6.3 million viewers-per-week mythological drama Mahabharat on India’s Star Plus television network costs about 250,000 rupees ($4,143). For about the same amount, advertisers could reach at least 21,000 people with a 10-minute phone call, according to calculations based on prevailing mobile tariffs.

Indian companies spent 3 billion rupees ($49.9 million) on mobile ads last year, and the market is projected to expand 43 percent this year, according to the Mobile Marketing Association. The bulk of this spending goes toward voice-based services because most Indians carry basic-feature phones.

Unilever’s service is a far cry from Spotify’s popular music-streaming service, where subscribers can listen to personalized playlists. On Unilever’s offering, which the company says has lured 8 million listeners since its start last October, a user places a call to a special number that disconnects after two rings so that the consumer doesn’t have to pay for the call. The system then calls back and plays a 15-minute prerecorded chunk of music interspersed with ads for the company’s soaps, skin creams, shampoos, and detergents. All users listen to the same recorded segment, which changes weekly.

Several companies, including Mondelēz’s Cadbury subsidiary, have offered free mobile airtime credit to customers—an attractive come-on in a country where 97 percent of mobile subscribers use phones with prepaid SIM cards. A code printed inside the packaging of Cadbury’s 5-Star chocolate bar enables the customer to redeem the points. Likewise, buyers of PepsiCo beverages and snacks get 15 rupees in free airtime. And Marico (MRCO:IN), India’s biggest seller of hair oil, in September started a service where consumers receive prerecorded calls offering basic English lessons.

Unilever’s mobile campaign for its Axe deodorant takes a different approach. Each Axe package has a code that buyers can use to enter a drawing to win a ticket to a party on a yacht. Once a user registers, a woman’s prerecorded voice calls his phone regularly, urging him to buy more Axe to increase the chances of gaining entry to the party.

Some marketers say it’s difficult to measure how well the music services translate into product sales. In addition, costs for the companies can quickly rise to “unsustainable levels” if millions of users flock to a free service, says Milind Pathak, global head at One97 Communications, which owns Paytm, a clearinghouse that offers loyalty points and coupons for consumers who need to buy airtime minutes for their phones. (Intel (INTC) is one of Paytm’s investors.) “It’s impossible to sustain these kinds of costs unless you are a really big company with lots of brands,” Pathak says.

There also are some concerns about the longevity of the new call-back ad campaigns. “It’s a new thing and might be successful for the first three or four months,” says Harsh Mehta, a Mumbai-based analyst at HDFC Securities. “The customer would eventually get bored with the same stuff.” But for now, the next call many rural Indians receive may be an ad.

The bottom line: Mobile ad revenue in India hit $49.9 million in 2013. Spots are mostly recorded voices because of the dearth of smartphones.

Narayan is a reporter for Bloomberg News in Mumbai.

The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • UL
    (Unilever PLC)
    • $41.54 USD
    • 0.05
    • 0.12%
  • PEP
    (PepsiCo Inc)
    • $97.05 USD
    • -0.04
    • -0.04%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus