160By2 – SMS based Advertising Startup

Few days ago I had couple of questions on my mind about throwing away money to read SMS as offered by mGinger, mGarlic, adMad, m-earn etc. We had a response from 160By2 team which is successfully  running SMSCountry a Free SMS website for the past 4 years which lead them to found 160By2. The company is founded by Satya Yerramsetti and Raju Kalluri and the team has diverse specializations complementing each other. Here is an extract from their response. [My comments appear in Italics]

The basic idea in founding 160By2 [80 characters each for User and Advertiser] is customers were asking for FREE SMS service to communicate from the conveinece of their PCs. Brands & media companies are trying to reach their consumers on mobiles in mobile dense countries like India. These advertisers prefer targeted advertising capturing the users’ attention. Traditional advertising channels like TV, Radio, newspaper, billboards etc do not capture consumers’ complete attention. Internet solves this problem to some extent when relevant ads are served in context of intent from the consumer. Most of Asian countries have low internet penetration but very high mobile penetration with high SMS usage.
 
Trying to address these problems and combining the needs of consumers and advertisers, the idea of giving half screen (160/2) to both parties, originated.
 
The User: Clean, intuitive and fast service, with easy to use features (like intellitext etc)
The advertiser: The ads are powered by our Smart Match Ad Server Engine that appends contextual ad to user generated messages- based on profiling as well as context of conversation.

Business and Revenue Model: Get own Users, who come to www.160by2.com website and send personal SMS to their friends, family and contacts. This is currently working and we are overwhelmed by user response! Cater to Users from 3rd party content providers like stock alerts, astrology news etc. Free to the User always.  Advertisers pay for each SMS.  Mobile Operators make additional revenue on account of generating a response from the receiver of the ad either through a call back number or clicking on the URL (data charges) etc.

Proposition to Advertisers – We realized that each SMS has an emotion attached to it i.e. it could be a love or a romantic message; it could be a greeting and so on. Identifying this “emotion” in the SMS communication is the key to serving an appropriate ad. We endeavor to capture this emotional communication or “emocation” and serve the advertisers with the right audience. [They will have challenges like decoding Hinglish and other locales]

On Challenges: Creating a whole new industry of “mobile advertising in user generated SMS” is probably the biggest challenge. The advertising industry is still not very clear on some of the issues about mobile advertising. We are developing tools for the advertisers so as to where they can play around with our data. We have been giving advertisers a FREE trail period offer for them to create some campaigns, test the medium and also look at the results live. We should be able to balance the demand for free SMS against availability of an ad inventory that pays for delivery of SMS. There will be seasonal peaks and troughs, and the challenge will be to balance these out over a period of time.

Online and Offline Marketing initiatives: The trial launch of advertiser program has already led to highly encouraging results – we have small time local businesses like a boutique, gym, PC retailer, travel agent advertising with us. Since we conceived this idea we have been in constant touch with Brand Managers of some of largest brands in India and also with some major Medial Planning Agencies. [On how they will acquire Advertisers ]

Users and Advertisers Data on 160By2 SMS Advertising Platform: As of 15 July 2007, we had 22K plus users, with an extremely high proportion of active users. Right now we are adding more than 500 users per day. We have about 60 plus advertisers, of which five odd advertisers are big national brands while remaining are small to medium businesses who want to advertise with new age media advertising.

The company has in place an Anti Spam Purge System to control spam SMSs. They have also not raised any funding and all the operations are funded by internal accurals. They have the advantage of having stepped in early into the game. Rich experience with user feedback from running SMSCountry is distinguishing them from the rest of the crowd. If the Mobile Operators are forced to open the discussed interface, then SMS advertising companies can make a killing. Your thoughts ?

Tags: SMS, Mobile India, SMS Advertising, Mobile Advertising