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HT Media Forms Mobile Marketing JV With Velti PLC; Conflict Of Interest?

velti ht firefly

velti ht fireflyWhat a time to start a mobile marketing company…HT Media has formed a joint venture with Velti Plc, a London Stock Exchange listed company, to provide mobile marketing solutions in India, reports Livemint, an HT Media publication. Velti has had the BRIC countries on its radar, and earlier this year, reached an agreement to acquire up to 50 per cent of CASEE, China’s largest mobile advertising exchange, for an investment of up to US $6 million.

HT Media will hold 65% equity in the venture, which will be a subsidiary of HTs Internet subsidiary Firefly e-Ventures. Amit Garg, head of Firefly, will also head the JV, which will operate out of Gurgaon. Firefly also operates out of Gurgaon. 

This is the second significant strategic partnership for Velti – in 2007, they formed Ansible, a global mobile marketing agency with the Interpublic Group. Velti provides mobile advertising and marketing solutions to brands like Microsoft, GM, Coca Cola, Verizon, Bayer, Johnson and Johnson, Vogue Magazine, Mastercard, Colgate-Palmolive, Ferrero, Bacardi, as well as media companies like MTV, Disney, Associated Press, Fox Networks CBS and Real.

Going through Velti’s half-yearly financial report, I noted that Mobile Marketing and Advertising is largest segment, accounting for EUR 10 Million, platform services to enterprises accounted for EUR 3.2 Million, and platform services to operators accounted for EUR 2.6 Million. Download the report here.

I do see a conflict of interest here, since in this case, a publisher also owns an agency. Velti and Firefly will find it tough to convince marketers that they’re operating independently, and not pushing ads on to their own properties – livemint.com and hindustantimes.com, or via their SMS short code – 54242. Velti does provide opt-in SMS database services, so I wonder if they’ll use HT Media’s database for 54242.

Velti may have gone with an agency instead of a publisher, like in case of IPG for Ansible. For mobile advertising, other key publishers with a mobile presense, like NDTV and Network18 (disclosure: I own shares of NW18), may not come on board. There are independent mobile ad networks like AdMob, MKhoj, ZestAds and Mobisolv, operating in India.

At the same time, the mobile advertising market in India is still in its infancy, so another player – particularly one with pre-established international brand relationships – will help grow the market.

The real question is – how long will it take for mobile marketing to move from an experimental budget for marketers, to becoming a regular part of their plan?

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