Interview with Chaitanya Nallan, CEO, mGinger (Part II)
Click here to read Part 1 of the interview.
Any issues with TRAI? They recently came down hard on the tele-callers?
First of all, TRAI is more concerned about the telemarketers who make voice calls. Text based messaging is not that an issue. Secondly, their recent regulation is for Unsolicited Commercial Communications (UCC). Ours is completely solicited. The user permits us to send messages. So we have no issues with TRAI.
Any issues with service providers? You could at times be competing with them for mobile advertising revenue?
Not at all. Infact most of them that we met are very happy with such a service, because they think we are kind of subsidizing the users' mobile bills. We are getting calls from them to ensure that subscribers on their network do get our messages.
Do you have your own sms servers?
No we go through SMS aggregators.With whom do you share your revenues apart from mobile users?
Revenues are actually shared all across. We get money from the advertisers. The first level of sharing is when we pay the SMS aggregators. The aggregators internally pay the operators. The operator gets money, the aggregator gets money, and ultimately the end user also gets money.
You have applied network marketing concept to your business model. Has network marketing worked in India in general?
For us reaching 1 million mark in just 4 and a half months after launch would not have been easy without network marketing. One would have to spend tons of money to achieve this base in such a short span of time. So yes, definitely we see it working.
What is your revenue model? How much do you get per sms per person?
It depends on volumes and the kind of product that you are buying. Whether it is CPM based or CPL based, it can vary anywhere between 50 paise to a maximum of Rs 2 per sms.
How do you market your services?
On the consumer front we have not much to do. Network marketing is working efficiently there. For signing up advertisers, we have sales force in Bangalore and Hyderabad and they are approaching advertisers one-on-one.
There are not many mailing houses in India. Mass mailing - by post or by email - has not really been tried on a large scale by marketers. How do you think the marketers will respond to this type of ad media?
Email has not quite picked up in India. It is being done but most of them are spam. Emails have huge problems. It is being done throughout the world but the effectiveness of email campaign is extremely low now. We all have excellent spam filters now and it is not allowing those emails to get into your inbox. And of course it is again unsolicited and irritating.
Is mobile messaging is a better alternative?
As a medium, compared to Internet, mobile is much more powerful. I can reach you wherever you are because mobile as a medium is with you all the time. That is precisely why permission becomes more important in a medium like that. I think it is a much more effective way of advertising. We are getting good response rate for all our campaigns and it shows it is a much better medium.
Do you plan to add buying facility as well like one can place the order for a particular offer campaigned?
We are in talks with several companies which have mobile payment capabilities. Potentially for high end offers if you like them you might be able to make a purchase over mobiles. That is on the cards but its going to take a long time before it really kicks. That depends on other factors as well, like the mobile handset capabilities.
With the Internet we have content plus ad as the advertisement model. How different is it on the mobile media?
We can have all sorts of ad models on mobiles. With the content-plus-ad model the only constraint right now we see is the space. To show content and ad is very difficult on a mobile phone. Most of our users still don't have access to Internet capabilities on the phone. So that is the big limitation.
Are there any other mobile content services that you are planning?
Yes we are actually in talks with some mobile content companies for providing content on mGinger. The users can make a purchase from their earnings. Why should anybody wait till he/she earns Rs 300. They may want to have a ring tone or wallpaper for Rs 20 or so from their earnings so far.
Do you campaign these ads in just English or other local languages?
Right now it is in English. But we will have local language capabilities soon.
You can have subscribers anywhere. Why restrict focus to India only?
We want to focus on India first and see the traction. There are lots of lessons to be learnt. India is our first market. If we do it here we can do it successfully everywhere.
Do you have competitors in this space that operate a similar business model?
There are people who surfaced immediately after we launched. So after our 1st month of launching, the first clone of mGinger came up. Soon there were 4 or 5 sites which came up in a month or two. All of them are pretty much same. But as a first mover advantage we have a substantial user base.
