Aircel-Blyk deal to boost India's mobile ad market

Shiv Putcha/Ovum
20 Jan 2011

Blyk, a UK-based mobile messaging and media company, teamed with Aircel late last year to launch a new service in India called “Blyk on Aircel.’

Targeted at the youth segment, Blyk’s offering involves interactive text and multimedia messaging as an advertising format, with opt-in subscribers. Aircel is India’s fifth-largest GSM mobile operator with 50 million subscribers.

While Blyk is not the first attempt at mobile advertising in India, we feel that this partnership with Aircel is unique, due to its sharp focus on the youth segment as well as the complementary capabilities that each party brings to the table.

Indeed, Blyk has already signed up more than 100,000 subscribers since launch. This new engagement model will inspire fresh thinking on how to tap into high-growth, profitable segments.

India’s youth demographic represents a large addressable market for advertisers looking to utilize mobile as an advertising media. According to the 2009 National Youth Readership Survey (NYRS), India has a steadily expanding youth demographic (13–35 year-olds) estimated at around 38% of the total population, or 460 million.

Of this demographic, the number of literate youths numbers 333 million. If we further assume that those who are literate potentially use value-added services (VASs) and have the ability to pay for mobile devices that access such services (salaried and self-employed in non-agricultural activities), the number reduces to 52% of India’s youth, which is around 170 million.

While Blyk’s stated target audience of 16–29 year-olds will end up being a subset of the NYRS numbers, it is still illustrative of the potential of this segment.

The population of India is characterized by an often bewildering diversity that cuts across language, religion, age, and income variables. The heterogeneity this engenders makes successful targeted advertizing very difficult.

Indeed, advertizing in India across media is plagued by clutter and low differentiation. The relative homogeneity, viral behavioral and spending patterns of the youth segment could potentially translate into higher response rates, which are very appealing to advertisers.

The partnership between Blyk and Aircel must be seen in this context. Blyk’s interactive engagement model meshes well with Aircel’s strategic focus on urban areas and the youth demographic.

The partnership is on a revenue-share basis, with Aircel providing the connectivity and Blyk taking care of ad sales and campaign management. Blyk on Aircel has launched with 20 participating brands, both local and global, but will look to expand.

The large addressable youth market in India and its unique characteristics aren’t by themselves sufficient for success. Attractive content alone will not translate into higher response rates in India. Highly contextual and interactive models over mobile are necessary for engaging the youth segment.

The high degree of social networking among the Indian youth demographic with its associated interactivity bodes well for any service that brings them interactivity and a sense of community.

Blyk’s unique model does exactly this by offering subscribers a highly interactive and engaging experience. Not only do users opt-in from the start, but they exercise control over the type of content they receive and the frequency.

Users are sent SMS and MMS messages across categories over a period of six to eight weeks and asked to indicate their preferences. The compiled data is then used to personalize their offerings with a view to furthering relevant interaction and brand engagements. If the Blyk on Aircel proposition catches on, it will boost mobile advertising in India and offer some valuable lessons.

Traditional forms of mobile messaging like SMS and MMS will play a key role in mobile advertizing and continue to deliver strong results. This is particularly true in emerging markets like India, where the vast majority of mobile devices are still entry and mid-level without access to feature-rich user interfaces and operating systems.

Curiously, MMS in India is more successful than in mature markets like the UK, and lends itself well to the interactive elements of the Blyk model. Blyk integrates its ad engine with Aircel’s MMSC and also does the leg work in ensuring that the MMS renders accurately across the myriad devices on offer in India.

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