Micromax gets MAd for ads

The Gurgaon-based company, leading other Indian handset makers, aims for a new revenue stream by giving users free talktime if they watch some ads

The mobile market has grown almost three-folds, latest reports on sales of 2013 say. It has been put at between 40 and 44 million units in 2013. Three budget Indian handset brands figure as among the top five sellers. Keeping pace with the growth in affordable smartphones, and small businesses leveraging mobility solutions, mobile advertising too, is expected to grow over 40 per cent, according to a report by Mobile Marketing Association (MMA). It pegged the 2013-mobile advertising market at Rs 300 crore.

Micromax, which IDC, the research firm, has said was the second-largest handset seller in 2013, with 13 per cent share in the last quarter of 2013, launched an app recently to take mobile advertising further. MAd, or Micromax Advertising Application, launched last month, is going to be pre-loaded in its range of MAd phones such as the MAd A94. It lets users earn free talktime in lieu of watching ads.

MAd run

• Micromax has tied up with Coca-Cola and Toshiba
• Users can opt in, irrespective of operator and their mode of payment (pre-paid or post-paid)
• Micromax has toppled Nokia as the second-largest handset seller in Q4 in 2013, as per IDC
• Even though MAd runs on Android, it won’t work on other handsets, yet

While it waits to narrow the gap between itself and Samsung that leads with 19 per cent share, Micromax is trying out ways to improve the brand equity meanwhile. Late last year, it had signed on Australian actor Hugh Jackman, who has featured in popular Hollywood franchises such as X-Men, to mark its international entry. It entered Russia in January, this year.

With MAd, experts say that the app could improve its brand in the budget segment. Karbonn and Lava are the other two indigenous handset brands which featured in the top five as per IDC. Although, it might be hard for a budget handset brand to breach the premium line.

With MAd installed in handsets, a user would be given the option to view a 30 to 60-second ad, before she places a call. Once she watches the ad, the points earned for watching would be credited to her account, be it postpaid or prepaid. With a one-time registration, the service will work for all subscribers who opt in and across telecom operators.

Shubhodip Pal, CMO of Micromax, says that the company is looking to create a huge user base and then invite advertisers. "It is a new revenue-generating stream for us. We sell around 1 million handsets every month. We are looking to sell 150,000 units with this pre-loaded app by the end of December, 2014," he adds. The company has started with tie-ups with Toshiba and Coca-Cola for ads.

But with the app, Micromax would continue to appeal to the youth, a segment which has taken to its handsets with their features at value prices. Micromax says that this app is not for professionals who are on the move and don't have the time to watch ads before placing a call. The youth, on the other hand, might not mind trading their attention for some free talk-time.

Explains Hemant Joshi, partner at Deloitte Haskins & Sells, "This offering would increase the data usage of users and hence, increase data revenue for operators. The rise of mobile video also highlights that the mobile ad platform could be successful. Through social media on mobile, advertisers could get a good platform for targeted marketing. Companies, which want to test their advertisements, could also use this app for viewership."

According to Akhilesh Tuteja, partner and national head - IT advisory, at KPMG, monetising ads is not a new strategy. "When the Internet was an expensive proposition, service providers used to give free bandwidth for watching ads. Many free games still show ads during play," he says.

Mobile ads have been monetised in other developed markets. In fact, Micromax is not the first player in India.

UK-based service provider of interactive and multi-media mobile messages and brand engagements for the youth, Blyk, had tied up with Aircel in 2011. In November, 2013, Tata Teleservices had launched a similar service called GetEasyTalktime. However, performance numbers on these applications are not available.

Even though MAd operates in Android, Micromax says it can't be transferred to any other Android phone. However, the problem with such implementations is these are not agnostic of devices or operators. Limiting such a service to just a handset seller's models or a particular telecom operator will not achieve critical mass.

But Pal is banking on mobile advertising to grow. He says, "The ecosystem of mobile marketing is growing gradually. It has potential, as it can also be location-based. Mobile is the primary gateway to online services for many and hence, attractive to advertisers. Many companies are now coming up with mobile sites before they come up with web versions. Marketers are looking to reach out to a captive audience." Data consumption will also go up as telecom operators offer easy data packs for GSM connections as well, says Pal. Mobile advertising in India is expected to grow to Rs 430 crore in 2014.

Tuteja says that the model will make it difficult for Micromax or the rest of the partners to stop with the rewards. Monetary incentives would have to be provided for the app to work. "History shows that no user would watch ads if not being rewarded in return. However, if the experience is made more fun, say through gamification of ads, then providers could have another hook for the viewer," he says.