The next great mobile wave, Bric by Bric

Brazil, Russia, India, China and South Africa — collectively known as the BRICs countries — represent the next great wave for both mobile telecommunications and marketing. Home to over 40% of the world’s population, the rise of the BRICs’ emerging middle class will profoundly affect both industries.

Emerging markets in developing countries are destined for phenomenal growth in this sector since there are many more mobile phones than internet connections in these countries.

The numbers for mobile internet growth speak for themselves. The BuzzCity mobile advertising network has already delivered 70% more ads in 2010 than it did in 2009. India, South Africa and Kenya are amongst the top five countries with more than five billion mobile ad banners served amongst them.

While China may be in 15th position overall, the country saw positive annual growth of 20% — not bad for a country predicted to have 957-million mobile internet users by 2014. Central and South American countries also saw phenomenal growth, with Brazil in particular seeing a staggering 793% annual growth in 2010.

So what does the future hold for mobile marketing in these countries?

I see it as falling into four key areas:

1. Marketing budgets will continue to shift towards digital

• This makes sense as mobile audiences continue to grow as handsets get better and cheaper, and data rates continue to fall. In Kenya recently Safaricom, the mobile phone operator in which Britain’s Vodafone has a 40% stake and which has more than 70% of the Kenyan market, said on 7 January 2011 it is slashing its SMS prices.
• Mobile will get a bigger slice of digital spend, particularly in emerging markets where mobile is the more common form of online access due to infrastructure and cost reasons, as well as amongst niche communities. In Brazil for example, multinational and local companies are showing interest in mobile advertising especially in the beverage and automotive industry such as Fiat, Coca-Cola and Anheuser-Busch InBev
• There will be an increase in brands and agencies using more mobile tools – SMS, mobile display ads, applications, in-game ads, search and location-based services- to enable them to engage with their target audiences for branding, customer acquisition and retention efforts.
• But clients remain price sensitive and the era of experimentation in mobile is over. It will be critical for brands to ensure that mobile is fully integrated into their businesses – a traditional web presence is simply not enough anymore. Plus agencies need to work closely with the brand’s product development team to define the role of mobile, for example, will it be an app, a site etc?

2. Mobile content: Discovery and distribution

• Moving on from the early years of mobile marketing, the ground rules for mobile content are now well established and mobile specific content is now being created, for example the New York Times on mobile is radically different from its web version.
• Free and freemium applications and games will take centre stage particularly on operator portals as this boosts their earnings from data charges.
• The mobile internet will be available in local languages catering to more niche communities. This feature will work hand in hand with newer phones, which enable users to communicate in different language scripts more easily.

3. Growth of ‘White box’ manufacturers

• Smartphone usage will increase in all markets but contributions from ‘white-box’ manufacturers, particularly in emerging markets will change the landscape.
• ‘White box’ competition will continue to cannibalise sales from the major manufacturers, largely by mimicking handsets like iPhone or BlackBerry, while offering more features such as multiple SIM capabilities, at lower price points.

4. Phones will come into their own when it comes to banking and commerce

The retail and entertainment sectors are leading the way with mobile payments – and we are seeing innovative payment methods being deployed where most least expect them.

Some examples in BRICS countries include:

• VIVO, the largest mobile phone service provider in Brazil has recently partnered with Paypal to allow mobile subscribers to send payments for airtime, goods and services.
• Last year in June, Citibank launched its mobile banking services in Russia to enable customers to use their mobile phones for banking operations, without any additional applications to be installed on their mobile.
• Bank-led MVNOs, such as First National Bank (FNB) in South Africa will sign on more merchant partners as more retail players take up mobile strategies.

From the examples above, we can safely say that the future looks bright for mobile as the medium continues to be a dominant force in socio-economic development. Organisations will carry on using mobile and m-commerce to drive reservations, to promote events, and to increase general awareness of their goods and services.

Although there are a rising number of consumers purchasing smartphones, the reality is that many mobile users in the BRICs markets will remain on less sophisticated devices and legacy second-generation mobile networks well into the middle of the decade.

It is important that while we must continuously strive to develop new technology in terms of mobile to reach out to the newer 4G generation of mobile users, we must still remember the root of what mobile internet is all about – which is keeping it simple for the masses.

Dr K.F. Lai is the CEO and co-founder of BuzzCity — a successful Singapore-based mobile advertising network