3G Will Increase Competition

Faster Speeds Let Marketers Push Richer Content, Says Richard Robinson

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BEIJING (AdAgeChina.com) -- The launch of third generation mobile services is good news for China's mobile advertising industry.

Advertisers know many users, especially white-collar workers who opt for premium services, want a faster mobile data experience, because millions of them have already signed up for 2.5G services in China. Faster access speed means advertisers can push richer and more compelling advertising formats down the pipe to end users.
Richard Robinson
Richard Robinson
The introduction of 3G has had a major impact in other markets. Australia's mobile advertising market tripled last year from 2007, according to the research firm Frost & Sullivan, off the back of attractively priced 3G data services.

According to KF Lai, CEO of Singapore-based BuzzCity, the leading mobile advertising network in Southeast Asia, faster access in Indonesia has increased mobile advertising traffic there enormously. Indonesia launched 3G in 2006 and BuzzCity served 3.6 billion mobile ads in Indonesia in the fourth quarter of last year.

China currently has about 650 million mobile subscribers, a figure slated to grow at about 6 to 7 million per month to 720 million by the end of 2009. China's Ministry of

Industry and Information Technology forecasts that by 2011, mobile users in China will approach 800 million and by that time the number of 3G users could be up to 130 million.

More competition
Those 130 million users are a self-selected, choice demographic, since anyone with the disposable income (or ability to expense) a 3G data plan is already a very desirable advertising target. On top of that, the vast majority of those 3G users will have smart phones capable of delivering rich multimedia content.

Here's the best news of all: The issuance of 3G licenses will increase competition. China Mobile, easily the world's largest mobile phone operator ranked by number of subscribers, has enjoyed a near-monopoly on China mobile services since it was founded in 1997. But the market leader has been saddled with the sub-optimal locally developed TD-SCDMA 3G standard, while its competitors, China Unicom and China Telecom, were issued with superior W-CDMA and CDMA 2000 technologies, respectively.

There is great hope in China, among customers, advertisers and third-party mobile service companies that this scenario will create a more level playing ground. A more robust marketplace should ensure that data plans will be attractively priced. It should also create plenty of compelling content to attract users.

China Mobile officially launched 3G services on Jan. 7, 2009, but China Telecom and China Unicom may not launch their 3G services until May or even later. As in Europe, the majority of early 3G adopters in China will be business people getting 3G subscriptions to access the internet on-the-go on their PCs and not their phones.

3G will probably start to gain traction around the fourth quarter of this year, so 2010 will be the year that the subscriber base starts to get critical mass. After that, a virtuous cycle should emerge, with 3G enabling the rise of mobile video, mobile search and mobile commerce, which in turn will further fuel contextual advertising and more display advertising.

Build a WAP site
What's the first step for advertisers interested in 3G? Build a WAP site. Few companies currently have a functioning, updated WAP site for the Chinese market. Sure, lots of users are accessing full web sites through advanced mobile browsers, but there's a lesson to be learned from Japan, where every major advertiser has a made-for-mobile site. Even if your site is just focused on one product or on a limited campaign, that's a start toward to a fuller online mobile presence.

Second, spend some money on campaigns to drive traffic to your WAP site. The good news is that while mobile marketing is still nascent, advertisers can get a big bang for their buck. Most mobile ads are performance based links, so you can do a blend of performance-based links and ads designed to drive brand awareness.

Third, experiment to get ready for 3G. There are a lot of parallels in the PC-based online world and the mobile online world. Tear out a page from your successful rich media campaigns playbook and creatively modify it for mobile. Have a contest where users upload photos or videos. Create a viral video yourself and incentivize users to virally spread it. Or try sponsoring a branded mobile game to be given away for free.

It's going to take time for China's 3G rollout to make a major impact on mobile marketing among mainstream consumers. But if you haven't already made a solid commitment to mobile advertising, now is the time to start.

Richard Robinson is the CEO and co-founder of Kooky Panda, a mobile social gaming company based in Beijing.



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