Mobile advertising dials a reality check

By , agencyfaqs!, New Delhi | In Digital | July 06, 2007
Now that the screws are being tightened on mobile advertising, marketers are turning to permission-based promotions

Now that

the screws are being tightened on mobile advertising, marketers are turning to permission-based promotions. A breed of companies - mGinger,,, and - are even paying customers to receive advertisements.

The companies are following different models for payments and ad delivery. offers discounts and coupons to its users, pays on the chain of subscribers created, and mGinger pay per SMS ad they send. With a do-not-call registry regime around the corner, there's obviously a race to discover what works.

This correspondent decided to register with mGinger, one of the earlier avatars of these services, and probably the largest, with a claimed 780,000 users. mGinger awards its subscribers with 20 paise per SMS received in their inbox, 10 paise for each SMS their friends receive, and 5 paise for the friends of their friends.

So, here's a reality check. More than a month after signing up with mGinger (since May 25, 2007, to be precise), this correspondent hasn't received a single SMS from them. Surprising? Not really, because there are a lot of other people facing the same problem.

Saptarshi Majumdar, a copywriter with, registered with mGinger a month ago, and is yet to receive an SMS ad from the company. "I am worried that they are preparing a database for a bigger marketing concept and might misuse my phone number and address," says Majumdar. In fact, mGinger has a post on its blog called 'Is mGinger fake?' The company writes: "There are huge databases available in the market that can be bought illegally at 1 paisa per record. These databases have far more specific private information than what mGinger collects."

Anant Ahuja, product director, ACL Wireless, a mobile value-added service provider (which, incidentally, is in the same line of business as mGinger), is one person who has received an SMS from mGinger. He says, "The SMS was not that easy to read. It was not formatted properly and came from a number which was not marked as sent by mGinger. I did not get any more SMSs."

Chaitanya Nallan
To be fair, the company does try to clear the air. The mGinger website has a separate section called 'Myths', where the question, 'Why am I not getting ads?' and other doubts are addressed. It clarifies, "It will take a long time before we can get enough advertisers on a regular basis to send you even 10 per cent of your maximum number of preference ads. This whole industry is a baby. Out of Rs 16,000 crore spent every year on advertising, not even 0.005 per cent is spent on mobile advertising."

The stark admission is backed by numbers: The site lists Rs 72,462.70 as its Total User Earnings and Rs 99.40 as the Highest Single Earning. As for advertisers, the adGinger programme lets advertisers place ads on the mGinger platform. The 15 advertisers doing business with the company include Competition Masters, Anagram Stocks, vJockey, TravelMartIndia and Amity University.

We spoke to the CEO of, Chaitanya Nallan. When asked why mGinger has only a handful of advertisers, he replies, "It's going to take time because the ad spend on mobile is very slow and tiny, and mobile is a totally new medium." He adds that mGinger offers two kinds of advertising - coupons and branding ads.

Another limiting feature of mGinger is that until a user makes Rs 300 from the ads, he won't receive a cheque from mGinger. The company is working on a new plan to help people who have earned even as little as Rs 20 to actually use that money. Says Nallan, "We're trying to fix this problem and we're working on integrating the amount earned by a user with content, wherein one can download a ringtone or some other value-added service in exchange for the amount in his account."

Currently, mGinger does not assure its advertisers of any fixed returns on their advertising. However, Nallan adds that the company is working on metrics to measure ROI for the benefit of its advertisers. He gives the example of a coupon campaign mGinger carried out for a supermarket in Jaipur, Raipur and Kanpur. It says 980 SMSes were sent out by the advertiser, to which 480 responses were received - that is, almost 50 per cent.

But the bottom line is that organisations like mGinger are struggling to sustain themselves in the new world of mobile marketing. New models and experiments are being undertaken by these firms in order to break the clutter. But the fact of the matter is that not only is there an absence of a clear winner, solid business models are even harder to come by.

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