This document provides an executive summary for a mobile advertising strategy presented by Team Daily Maar-Cutting at IIM Kozhikode. It discusses key drivers in the mobile advertising market like increasing smartphone adoption and lower data costs. The objectives are to develop an attractive, appealing, and scalable mobile advertising model. It analyzes the market opportunity in India and outlines Airtel's strengths in analytics and platforms. The proposed strategy leverages Airtel's subscriber data and targeting capabilities. Financial projections estimate growing ad revenues and profits through 2016 with a 17% internal rate of return.

1. airtel iCreate 2012
Executive Summary
Mobile Advertising
Team Name: Daily Maar-cutting
Campus : IIM Kozhikode
Members: Mahesh Koppad (8943455233)
Arnab Guha Mallik (8943994677)
Abhisek Paul (8943707444)

2. Key drivers
Introduction Consumers:
•Advancement of network technologies
•Lower mobile data cost
Objectives •Adoption of Smartphone
Developing a model to mobile advertising which is: •Increase in application and mobile Web usability
•Attractive for the advertisers
•Appealing to the customers Advertisers:
•Scalable and sustainable •Need for highly targeted segment
•Need for personalization
•Differentiation of message delivery
ACTIONABLE PLAN •Wider addressable market and better ROI
Build on your own
Strength
Explain the market
opportunity • Robust analytics
• Flexible platform with
customizations
How does a customer spend his/her day
Explain how M-
Show them the metrics advertisement will help
• How can a campaign be brands
tracked
• The various advantages of
• Measured m-ads
• benefits • How Airtel can help them

3. Market Opportunity 1200
1000
 M-advertising is currently at nascent stage but has huge growth
potential. 800 1134
 The current market size is 56.5 million USD and is expected to grow to 600 900
125 million USD in 2013 huge rise
 Every customer spends more than 2.5 hours per day with their handset 400 630
 900 mobile users in India in 2012 estimated to grow by 26% in 2013. 200
 70% of the mobile users metros and tier I cities 0
 20119.7 billion mobile ads reached out 80 million people
 0.4% ad impression for mobile ads huge opportunity Mobile Users in millions
 Improving networks, coverage increased to 90% for operators 2012
 Growing Indian smartphone market – predicted CAGR of 39.2% from Expected in 2013
2010-16
Metros and Tier I cities
MOBILE ADVERTISING STRATEGY FOR AIRTEL
Strong relationship with subscribers airtel can allow
Extend services to include Mobile payments
subscribers to purchase items through their mobile devices
Integrate mobile advertising with other channels, such as fixed
Combine multichannel advertising platforms
Internet and TV (e.g., IPTV)
Develop ad sales experience Sales of the ad inventory - Airtel must remain engaged in the process
Technology capabilities in 3 areas: targeting, ad serving, and
Technology and Mobile analytics campaign analytics.
Opting in is required for “push” advertising formats like
Develop an opt -in customer base messaging; others don’t require it
Implement data-mining capabilities to provide marketers with
Make the most of subscriber data
predictive information on customer behavior

4. The M- Targeting
Advertisement • Airtel possesses an unrivalled amount of
knowledge about subscribers that can
ADVANTAGE be used to target ads with a high degree
of precision
What it means to a • Possible to target not only segments but
also individuals to deliver relevant and
brand? timely information, giving the advertisers
the maximum possible value
Use of Incentives to Motivate User
Multiple Channels
• Multiple channels to reach out  • Adding value to ads motivates users
mobile web and fosters strong one-to-one
browsing, messaging, audio/video relationships
streaming, voice, etc.
• Operators can offer free or discounted
• Each method unique, bringing them services: voice airtime and
all together synergistically can messaging, marketers may offer other
optimize effectiveness of the motivators such as coupons or
campaign discounts that can be used at stores
and restaurants
Interactive Response Capabilities
Real-Time Triggering
• Click through rates for mobile web ads are
estimated to be 5-10 times higher than those for
other forms of online advertising • Billing triggers: Voice application triggers
• Advertisers can take advantage of the • Location service triggers: The mobile ad
spontaneous impulse instinct – interactive platform can receive location-based triggers
responses can be more effective if combined with when the user enters a location registered
user preferences and purchasing habits for a specific campaign

5. Leverage on Strength:
The Airtel Advantage: Metrics REACH + ANALYTICS
User locality Information
• the subscriber’s postal code can be
correlated with commercial databases
to create geo-demographic profiles
based on local income
levels, household size, voter data, and
other population data
User Device and Access Information
• access network bandwidth, user's
roaming status, type of subscriber
device, etc.
Other third-party data
• refinement can be gained with
additional data such as local
weather, “store locator” information for
restaurants, hotels, or retailers who
wish to advertise promotions or offers to
targeted demographics
Also Provide the following
configurable capabilities:
1. Mobile device and capabilities detection
2. Mobile device redirect
3. Mobile device response customization
4. Mobile geo-location
5. Mobile and location based-ad
optimization
6. Rich media (live and VOD) for mobile
A Techcrunch reprt revealed that Facebook desktop ads, achieved a 0.083 percent click- 7. Mobile pre- and post-roll ad insertion
through rate (CTR) at a $0.88 cost per conversion (CPC). Facebook mobile in 8. Pixel tracking for mobile devices
comparison, earned a 1.14 percent CTR at a $0.86 CPC. That equates to Facebook mobile 9. Mobile advertising delivery verification
Sponsored Stories achieving 13.7 times the CTR desktop ads didat a cheaper price.

6. BUILD ON NEW TECHNOLOGY
Using a high-speed, low-latency application blade on the Cisco 7600 Series Router, the operator inserts an “identifier”
into the HTTP headers of selected IP data streams, and shares these encrypted identifiers with trusted online advertising
partners. These operator-controlled identifiers are correlated with demographic databases which can only be accessed by
advertising partners registered to the operator’s advertising ecosystem perfectly safe and protects privacy
Operators could further leverage their customer relationships to include additional voluntary opt-in information from
subscribers – perhaps in return for free, ad-funded services – that could be used by advertisers to uniquely personalize
online advertising and marketing campaigns
A snapshot of the OPT-IN
Service is shown below
Give advertisers the opportunity to place
ads in all the Airtel offerings bundle
advertisement opportunity
DTH, APPs, Broadband etc.
Chance to reach out not only to airtel mobile
subscribers but also other users

7. Advantage to Airtel Advantage To Advertisers
 Leverages from increased service usage; increasing profit  100% segmented campaigns
 Conquers other operators’ consumers; decreasing customer  Detailed demographic and contextual targeting
acquisition costs  Users consent – permission based
 Collects revenue from advertisement through their platform;  Real-time reporting
increasing profit  Real-time marketing adjustment available
 Extends LTV by adding value to their users; increasing  Wide reach to mobile users - all operators consumers
profits base
 First mover into emerging trends – mobile couponing  Different marketing approaches in hand
 Branding, Direct Response, Discounts, Mobile coupons
FINANCIALS
2012 2013 2014 2015 2016
Incr revenues 107.64 171.01 255.04 385.93 558.83
Operational exp 25 40 55 70 85
Acquisition and
marketing cost 30 60 50 45 45
Content acquisition 100 120 150 170 180
EBITDA -47.36 -48.99 0.04 100.93 248.83
Depreciation 125 25 25 25 25
EBIT -172.36 -73.99 -24.96 75.93 223.83
Responsive and
EBIT (1-tax rate) -122.376 -52.5329 -17.7216 53.9103 158.919
emotive ads
Capex 150 50 50 50 50
Depreciation 125 150 50 50 50 Excel sheet contains further
calculations to further support the
FCFF -147.376 47.4671 -17.7216 53.9103 158.919 NPV calculation
PV (FCFF) -129.504 41.7109 -15.5726 47.3728 139.647
NPV 83.6551 2. The operational expenses and other marketing and
IRR 17% content costs have been calculated from comparable
standards: server for analytics, maintenance etc
Assumptions
3. The capital expenditure is estimated to be 150 cr. for
1. The revenues have been calculated using the projections of
the initial year and 50 cr. subsequently.
the growth-rates of each sector, and allocating a conservative
4. Tax rate has been assumed to be 29%.
estimate of the nominal share of the revenues to mobile
5. WACC has been assumed to be 13.8%.
advertising.

8. thank you