Saturday, June 30, 2007

mGinger feasibility study: Should I advertise on mGinger?

mGinger paid SMS advertising: effectiveness and reality check

Shrinidhi Hande presents you with yet another case study, this time our own new Indian startup, mGinger.com a new venture which pays you to receive SMS advertisements on your cell.

Last month, I got over 50 invites from several contacts to sign up for a website under their referral. I ignored all those invitations and have been studying mGinger for sometime now. This post is to share my thoughts and analysis on this very new concept and business model of SMS advertising, its feasibility and sustainability.

Terminology:
mGinger: The mediating company which hunts advertisers willing to advertise through SMS and dispatches such ads to its members charging advertisers for the service and passing a part of income to members for receiving ads.
Advertiser: An enterprise willing to pay mGinger for giving publicity to its products and services via SMS
Members: Mobile users who have registered themselves with mGinger by giving their personal details, preferences etc and have opted to receive SMS ads in consideration for money.


The scheme is something like this:

Mginger pays you to receive contextual ads by SMS and all you have to do is register yourself, select the types of ads you want to receive, refer your friends for the program, sit back and enjoy. Ads will flow into your inbox, and you’ll be paid 20 paise per ad SMS that you receive directly and 5 paise for each SMS your friends receive. Per day a maximum of 10 SMS will be sent and the potential is that you may make thousands of rupees every month just for receiving SMS. mGinger would get this money from advertisers who will be paying for the publicity given.

Though this concept is new in India, it already does exist in UK (by a company called mindMatics) and some other countries. The promoters of mGinger are ISB graduates so it wouldn’t be fair to suspect their vision and only time will tell if mGinger will be a hit or a miss. The idea seems extremely innovative and exciting at the first glance but this author’s eyes and brain easily penetrate behind the superficial layer and I have following observation:

Conventional advertising: When an advertiser advertises in TV or newspaper or internet, the end user (viewer/reader/surfer) is not at all paid to see the ad and is often forced to see the commercial and the commodity/service being promoted gets registered in his mind when he sees it embedded in between other content (TV program or news article) that he is interested in viewing/reading.

SMS advertising: Recipient receives ads with sole reason of making money. He may or may not choose to even read the ads, let alone making use of it.

If I’m an entrepreneur and wish to advertise my product/service, what counts for me is how many people out of all those who received my advertisement eventually come to my shop and make some purchase. How many SMS ads get converted into business enquiries and subsequently into sales is something yet to be seen. In conventional medium, at least the product/service gets registered in the mind of target audience as they see the ad but in SMS ads, if everyone deletes the SMS without even reading it, my entire expenditure goes down the drain. Say as a businessman I spend Rs 1 lakh for advertising and say mGinger sends one ad each to 1 lakh people. mGinger is happy, its members are happy, but unless some of them come to by shop, do some business and I get a profit which exceeds what I spent its not useful for me. In order to ensure positive ROI, mGinger needs to send SMS only to those selective members who are likely to make use of the information given.

mGinger is very much aware of this and is categorizing its user profiles. If you do not understand what I mean by customized advertising, read below examples:

*If a bank wants to send SMS promoting personal loans, such SMS needs to be sent only to salaried or professionals who have proven income and may need a loan. Sending home loan ad to college student will be waste of money as they’re not eligible for a loan.
mGinger logo

*If a restaurant in a particular area of a city has some new schemes and wants to promote it, people living in surrounding areas are prime targets. If that SMS is sent to someone living in other part of town, chances are less that he’ll travel all the way to this hotel.

*If advertisers have information that I have not gone on a vacation for quite a long time now, I become easy target for any holiday plans and schemes, because chances of me considering one are more if I get a good deal. On the other hand if I’ve just returned from a vacation, I may not consider another for near future, irrespective of how tempting the offer is.

*If I'm trying to sell an expensive item, say a Mercedez Car, I would want to target only those who earn high income, say Rs 1 lakh or more per month and not everyone on the street.

In order to achieve this kind of personalization, mGinger will need huge member base to meet any combination of profile an advertiser may demand, and they need advertisers to send ads for various kinds of users they have. Building this database will take time.

Note: None of the advertising medium gives guaranteed results (i.e. just because you advertise on leading news paper or TV channel there's no assurance that people will line up in front of your shop next day and buy what ever you offer, the ads just help to get the message across (that you're offering something) to the masses). While conventional medium like TV and print have been time tested and proven to be effective, we'll need to wait for sometime for some businessman to try this relatively new concept of SMS advertising and declare if he's happy/not happy with the overall outcome and effectiveness.

Risks for advertisers: If recipients install SMS spam filtering software and get all mginger ads deleted outright the very purpose of reaching the target audience gets defeated. (Such feature already exists in emails as all of us know and it is only a matter of time before they appear in mobiles)

Currently mGinger doesn’t have enough inventories of ads to serve all its members, which has resulted in members listing for all possible categories they can (hoping to get more ads), this dilutes quality of target audience.

SMS traffic: Let us assume one fine day mGinger gathers enough advertisers willing to pay for SMS ads and starts sending SMS to members in full scale. This means lakhs of outgoing SMS daily. Are our cell phone infrastructure prepared to handle this much volume? Already we are facing congestions during festival season when everyone sends festival greetings to all his/her contacts. Soon they (mobile service providers like Airtel and Hutch) will start demanding a share in profits, either from subscribers or from mGinger or both.

What does TRAI (Telecom Regulatory Authority of India) has to say about this? This is purely a commercial activity on a mobile network meant by and large for personal usage. Commercial SMSs (SMSs sent to 4 digit numbers like the ones you send to download ringtones, to cast your vote for Indian Idol) are charged at a premium (Rs 3,5 or 7 as the case may be) and a fraction of this goes to government as tax. Will not the government love to have a share from mGinger’s business? If you’re starting a hotel you need to keep price of commercial LPG in mind. Profitability will be hit if you print your menu thinking you’ll be able to cook with domestic LPG. Probably mGinger team has some way to counter this.

It is possible to show highly interactive/creative ads in print/TV media and grab attention but only plain text messages can be sent as SMS, which will be boring for people to read. (Well, mGinger can surely consider MMS advertising if SMS ads succeed!!!)

mGinger has managed to gather subscribers base of few lakhs (I don’t have exact number, 4.5 lakh and growing is the available number) . This appears ineffective compared to millions of viewers TV channels or internet websites claim to have and is not a tempting enough number for an advertiser to choose this as a medium. Existing members who are expecting mGinger to generate enough revenue at least to foot their monthly telephone bill, are getting disappointed that they’re not getting much (if any) ads. For mGinger, it is like egg first or hen-they need huge member base to convince advertisers and members need advertisements flowing into their inbox right away.

Some analysts compare mGinger with Google adsense and say mGinger will be more successful than adsense. I disagree. Google had huge list of advertisers and they didn’t have enough web pages of their own to display all these ads and eventually they came up with idea of adsense, showing their ads on other websites with a revenue sharing model. mGinger yet to build up its database.

How will mGinger protect its members from unsolicited spam messages? Advertisers may ask all details of members (like show me to who all you sent my SMS?) and if mGinger shows your details (see Boss I sent your SMS to these 10000 people), the advertiser now has your name, phone number, preference and other details. Next time, he may choose to approach you directly instead of coming through mGinger, which will increase unsolicited SPAM messages. So mGinger will have to prevent its database from getting into wrong hands and need a mechanism to prove that right ads have been delivered to right members without compromising on member data.

This post is not to criticize mGinger or to discourage you from becoming a member. Any new start up will face several hurdlers like these and we hope mGinger will overcome all of them and will prove to be beneficial to everyone involved. mGinger team has been very honest in their statements and they have evaded most of the myths surrounding the concept (like everyone thought they’ll become rich overnight, but it is not so)

mGinger is spreading like wildfire among students and professionals alike but advertisers will take their own time to analyze this new concept before they can trust this and choose to spend on it. Several competitions have also come up promising more lucrative returns than mGinger. While there’s no guaranteed return, sharing all personal information in order to get target ads is something one needs to be a bit cautious about.

The biggest challenge for mGinger now is to convince advertisers to spend on SMS ads by assuring them of a positive ROI. Obviously they can't approach advertisers saying "We've half million SMS hungry members,please do charity". They have managed to lure ordinary people into registering with the temptation of free money, but a seasoned businessman will not succumb to any hype or temptation and will use rely on his own instincts and judgement to decide if he should spend on this. Members may soon get frustrated if they dont make even a minimum of say Rs 50-100 per month and pressure from other sides (from Govt, competitor, telecom operators etc) may creep in as well. I wish mGinger all the best.

mGinger official website | Clear your myths about mGinger here |Read this article on Mouthshut|mGinger mGinger website for advertisers (AdGinger!)

April 2009 Update: One mginger user has proudly presented the cheque he received from mGinger. (sourced from a Kannada forum-Maja Maadi). he says it took him about 8 months, 1000+ SMSs to earn 302 Rs. So it works-earning about 1+ rupee a day for receiving about 5 SMSs. Sounds insignificant but still money is money for those it matters.
If you liked above post, you may also like these similar posts:
*Analysis of MLM & Network Marketing Companies
* i-Mint Customer reward program-Whatever I do, I don't mint
* Redbus online ticket booking-Service review

28 comments:

Logesh TamilSelvan said...

thats Cool!
Hey any of ur friends or you got some money through this?

Shrinidhi Hande said...

Negative. I've not enrolled for this. Haven't heard from any of my friends making money from this yet. I heard highest ever individual earning by a member till date is some 26 Rupees. Nothing worth mentioning at this moment and will take time.

Logesh TamilSelvan said...

anyways
Let us wait N see..
let me also enroll in it

Digital I.T Blog said...

If you want to advertise your product or services on mginger than i will say no , Because their are so many subscribed users on mginger money making scheme but what do you think that how many of them will read all sms . I have received more than 5 or 6 and i deleted them immediately . Try newspaper , local magazine or cable advertising .

Shrinidhi Hande said...

@Logesh: Ok

@D IT Blog: That's precisely what I told, the success rate is not yet known. Since people get ads for the sake of getting it, success rate is bound to be low.

But then in some specific scenarios when extremely targetted audience is required, mGinger may be helpful. For example, you have a restaurant and want to announce a new scheme. A reasonable size advt in a local newspaper will cost few thousand rupees. But using mGinger if you can send SMS to around 300 people who are staying within 5km radius (by spending say rs 300) and atleast 25-50 of them read the SMS, come to your restaurant and pay a bill of say 100 Rs, you will be getting a positive ROI. Will that happen? to be seen...

Anonymous said...

Mate, please consult this website gianiji.com to know if these websites are fake or real! Because the professionals who are running this website know what is right and what is wrong in these lucrative websites.

Beleive me these professionals from ginaji.com do not charge anything for their advice!

Good Luck! :)

Shrinidhi Hande said...

Comments I got for this article at Mouthshut.com:

paulose said:
Jun 28, 2007 02:09 PM

hmm nice detailed analysis.

i recall a occasion when i got a marketing SMS and to claim the offer i had to show the sms at the outlet. I did and got a offer. this was good 4 years ago. and the offer was direct from the company. may be now advertisers will use this method, thru which they get to know how effective sms advertising is thru mginger.!!!

keep writing
Santhosh
himanshu200 said:
Jun 28, 2007 03:31 PM

well researched analysis. if the quality of users (readers) are not good then advertisers will have to shell out huge money without gains. ultimately mginger will have to face music. online advertising has fraud checking methods and google has implemented on its adwords and adsense networks where they check repeated clicks on advertisements from same ip, duration of visit etc. mginger will also have to screen the profiles and then send SMS to readers.
the punch line ’’read sms and earn money’’ does not sound ethical :) as it ignores the advertiser who has paid money for the advertisement.

enidhi said:
Jun 28, 2007 09:26 PM

@ paulose: For advertisers effectiveness is more critical and mGinger is yet to prove that.

@ Himanshu: Even members will get discouraged very soon, if they don’t make even say 100 rs per month from this scheme.
sarav said:
Jun 28, 2007 09:43 PM

eNidhi,

Brilliant Analysis.!!

BTW, happened to visit your space. Excellent pics of Karnataka and eveything is commendable. Keep them coming..

If only there was a way of suggesting to friends worthwhile reviews like yours.

~Sarvesh
enidhi said:
Jun 29, 2007 09:35 AM

@ Sarav

Thanks for your words and thanks for adding me into trusted circle
rohitthebest said:
Jun 29, 2007 05:59 PM

whatever said and done.
I too got 100’s of mails from frineds telling me to register.
BUt frankly I am yet to hear of one person who really got paid thru MGinger specially in India.
Since you have written this detailed account - do let me know if you know of anybody got paid ?

I am sure we wont be able to locate that person :)
So why recommend something like this ? when we know that it simply doest works.

Keep Writing
Rohit
rohitthebest said:
Jun 29, 2007 10:10 PM

On other note - I’ve been a member for last 4 odd months as a friend of mine pressed me to be, I have a good chain too who joined after me - they are filling up my inbox with all kinds of offers and guess what.
My account balance is just 35 paise as of now :)
After reading your review I logged in to check if they are really interested in paying at all.

Your views please.
I will sincerely request to Not To Recommend something of this sort.

Keep Writing
Rohit
enidhi said:
Jun 30, 2007 11:55 AM

Rohit,

As I said, this model will take lot of time to succeed. They first need millions of user database to convince the advertisers, then only someone may come forward to pay.

Building this database takes time. I cant say how long...

It is upto you if you wish to wait that long or opt out outright.

Further, it is verymuch clear from their website that this is not a get rich quick program. Unless some advertisers come forward and ask for a profile similar to yours, you’ll never get any ad.

Effectiveness of this new business model is not yet known. Obviously it will take time and I personally feel it is a bit early to declare the concept useless.

I suggest hang on and wait (Again you should be lucky if you make couple of bucks...its your call if all these waiting and time spent is worth what you get in return.)

I listed all factors that goes in. Let readers decide if they want to opt for it or ignore. I’ve not become a member and in MS there’s no option to give neutral opinion so have selected recommended:YES as I do not wish to discourage people if they still wish to try it out after reading my review.

Hope I’ve addressed your comments.

kishore said...

hi srinidhi,

ur analysis on mginger n their concept is good. Seems you have analized things correctly .... but what is ur comment on sites like EEZYSMS.COM, 160BY2.COM, WAY2SMS etc from which send we can send SMS to any mobile with in India. These sites allow us to compose SMS and send to any mobile for free and they allow only 80 chars for SMS compsing n remainign 80 chars they will fill with ad .... i guess this concept is fyn when compared to mginger/admad.mobi/m-earn bcas an ad coming with a SMS from afren .... atleast makes pople to open it n will have a soft impact on the ad as they got it from their frens/relatives. So, i guess sites like EEZYSMS.COM or 160by2.COM have a future ..... and using this any gneral ad can be sent rather than a specific ad to a specific person bcas we dont know the details/interests of the reciever. watz ur say Shrinidhi about the concept of EEZYSMS.COM n 160by2.COM?

Shrinidhi Hande said...

I do not have any reservations against sites like 160by2.com, as they wont spread virally like mginger. Users are guaranteed to save few paise by sending SMS by such services so I sense no harm.

Anonymous said...

Hi! Check also Fluc.com... They same, but work not only in India and they give you free SMS!

Shrinidhi Hande said...

Looks interesting, will try when time permits.

Nidhi said...

Shrinidhi,

Thats an extremely fundoo analysis of this new model.

I remember registering myself on mginger long back but its long time now since I logged into my account.I am gonna log into it now to see how much have I minted there?

Cheers!
Nidhi

Shrinidhi Hande said...

Hi Nidhi,

Thanks for dropping by and leaving a comment.

Do tell us how much you made...

Shrinidhi

Nidhi said...

I have just seen my balance and it says that I have 8.45 in my kitty!! LOL

Shrinidhi Hande said...

Hmm...
It may take couple of generations to reach the payout amount of Rs 300...

arghya chatterjee said...

Thanks buddy
I was going to register today
but reading your detailed explanation, i got the whole idea....
I don't want spam on my mobile.
Thanks a lot .

Shrinidhi Hande said...

You're welcome.. Glad it was useful...

Anonymous said...
This comment has been removed by a blog administrator.
krishna said...

So, is there any way of increasing our mobile balance just by reading the SMS which are being sent by the advertiser's. Gaining of points or backing of amount in our account sounds bad. Directly amount must be credited as we open those SMS and our balance must be increased. In some of the foreign nations, these procedures are being followed sucessfully without fail. Y can't it be done in INDIA. If we are said to store amount in our account, those are to be checked regularly, since no one has came forward by sayng that they had received the amount as said by the organizers. Beter to think and do, or else our inbox will be filled up with spam and scrap. R there anybody, or are there anykind of these things through which, we can gain the balance. If anyone knows, beter to reply.....

Anonymous said...

Hi Nidhi,

Does it anything to lose for us, or they take any money from us

Shrinidhi Hande said...

Krishna,
Check out.. Most of the SMS ad schemes pay in cash only, just that it may take forever to reach minimum payout amount.

Anon,
Don't think so. Registration is free. Your only investment is your time wasted reading all the ads...

Anonymous said...

Well, let me tell about my story, where I have been both a money maker and has benefited from the advertise servive. It's almost been a year that I registered for this and as I see my account now, I stand at 224 rupees! Though it's a small sum, I feel good about it, Money is Money!
And on the part, I had received a advertisement from a real estate developer company, when I was looking for different developers, and that's when I got to know about a developer, which I finally ended up buying a 8.5 lakhs worth property!

I understand that this kind of advertising is still at a nascent stage. But I am sure this benefits all stakeholders.

Amit Dhingra said...

Good post... :)

Rahul said...

I joined mGinger around 2 weeks back. My balance is Rs.148 right now :)

Shrinidhi Hande said...

Anon, thanks for your inputs

Amit
Thanks

Rahul, Congrats. that's pretty fast

Anonymous said...

hi

Anonymous said...

I really liked the article, and the very cool blog

Khalid said...

Hi Sri,

Your blog is cool and attracting good number of visitors then why you are not using google adsense surprise ?

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