The Issue With SMS Based Mobile Advertising

Much has been written about permission based advertising on the mobile by mginger, 160by2 etc that have used the multi-level marketing model to garner subscribers. It’s supposed to be a workaround for the do-not-call sure that’s going to come into effect. While the word is that signups are healthy, there have hardly been any payouts to users – if any at all. My initial doubts were around the tracking mechanism – how can one tell whether a user has actually accessed an SMS?

I recently asked a senior exec from the operator about their take on these services. Apparently, the only money an operator makes is a share of the Re 1/ Rs 3 SMS from the sign-up process, since the user sends that one SMS to sign up. The operators logic is simple – “If you want to use our pipe and you’re making money off advertisers, we need a cut of that advertising money.” This reasoning apparently applies to all push based SMS services that are incorporating advertising, including Rajesh Jain’s MyToday. As per the exec, this is why Airtel had blocked MyToday last year in December.