Friday, July 13, 2007

It adds to add mobile to ads

One of the mobile industry’s greatest power is its consistent ability to take seemingly mundane topics and turn them into exciting industry buzzwords by simply placing the word “mobile” in front of them: “mobile” messaging, “mobile” content and “mobile” commerce have all at one time been bandwagons which operators, software companies, manufacturers, media firms and investors have clamoured aboard. In fact, the word “mobile” is rivalled only by Apple’s letter “i” for achieving hype transformation (place both in front of the word “phone” and see which generates the most hysteria).

In the past year, “mobile” advertising has entered the industry vernacular and the bandwagon now has some decent momentum. However, we’re surprised to see both operator and media companies focusing on old-school advertising techniques borrowed from the online world, expecting these to perform just as effectively in a mobile context. Campaigns such as promotional text messages and mini-banner ads on WAP sites mirror the tried and tested banners and email marketing observed online.

Just as Google broke the traditional marketing models used by the print and broadcast media and reinvented advertising for the web, a similar level of innovation needs to occur in mobile which will give birth to campaigns capable of delivering response rates that will make the advertising industry sit up and take notice.

One such innovation we’ve seen are the idle screen applications which provide intelligent search & discovery functions to handset users. Vendors include Abaxia (Mobile Finder), Zi Corp. (Qix) and Tegic (T9 Discovery Tool). These tools work by indexing handset information like contacts, bookmarks, call logs, documents, messages and appointments, and providing a keystroke search facility on the home screen. For example, typing in the characters M-A-D would produce a shortlist of matching content on the device, such as the contact Madeline Smith, the song Hung Up by Madonna, a text message received from Maddox Williams or a photo saved with the filename “game at Madison gardens”. However, these applications allow operators to add other information to the indexing pool. Working with their content partners, an operator could add promotions which also match the “M-A-D” search string, like offering links for a 50% discount off a Mad Max DVD or a Madonna ringtone. Such ads are non-intrusive and their contextual nature can actually enhance the search and discovery user experience if implemented correctly.

The fact that a mobile phone is location aware (in theory) adds a powerful dimension to the advertising experience. The ability for restaurants, shops, cinemas and bars to actively promote their services to mobile subscribers in the immediate vicinity has long been touted and is seen as the natural extension of Google Maps, which now has a mobile version available for a wide range of handset models.

Any talk of location awareness is quickly followed by concerns about privacy and such fear is one reason location services are still not widely deployed, despite the technical capability being established. Privacy is often brandished as a major concern by 50 year-old industry executives and not by the millions of 18 year-olds who seem happy to broadcast every minutia of their daily lives on their FaceBook and MySpace accounts. The industry needs to recognise that privacy means different things to the different generations: a college student will react differently to a Vodafone executive, for example, were they both to receive an unsolicited marketing SMS triggered by walking past a McDonalds.

Looking at how mobile advertising is set to evolve, we cannot help but think that carriers are in the strongest position above any other stakeholder in the mobile advertising value chain – but they seem oblivious to this. Operators are sitting on a goldmine of consumer information which can be offered to a plethora of third parties; which can be packaged in such a way to mitigate privacy concerns. Operators know who their subscribers are, their age, where they live, how much they spend, how often they travel and where they travel to. With the rise of mobile TV, operators will know which shows their subscribers are watching and which radio stations they listen to. Fundamentally, operators know their subscribers’ geographical location at any given time and know in which locations they are most frequently based (home, office, gym etc.). As carriers continue to see their voice and data revenues suffer and handset makers and content owners re-assert their direct-to-consumer relationships, operators who have effective systems and tools in place allowing them to slice and dice their vast subscriber database into segments and group defined by specific characteristics will have an opportunity at a compelling new revenue stream.

Source: Arc Chart

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