Mobile advertising can often be thought of as untargeted, irrelevant and for most people, annoying, but the fact is that it can be very effective, and the trend in advertising has always been towards narrower targeting, but why isn’t this happening? After all, it’s a long time since John Wanamaker famously said: “Half of the money I spend on advertising is wasted; the trouble is I don’t know which half.”
However, we are finally on the threshold of a new age in advertising, and the telecom industry has both the opportunity and technology to play the lead role, despite operators not currently utilising it to its full potential. There is great advertising potential within the mobile market place but how can it be seen as something useful and lucrative, rather than spam?
For advertising-based business models to succeed, they need to be opt-in, personalised and part of a broader set of service offerings that target customers who are truly interested in their products. Advertising is more than a revenue opportunity for telcos; it is an opportunity to interact with their customers, so it is essential for operators to get it right. There needs to be a better connection between advertisers and operators, who need to take a more sophisticated and strategic approach, by broadening their view on who their customers are. In simple terms, operators need to move away from being simply suppliers of voice and data, and move towards creating and developing interactive relationships with their subscribers and advertisers.
So how do you make an advertising experience work for the customer, as well as the service provider? The key is to be aware that advertising is not one-size-fits-all. A Harris Interactive study found that consumers want control over a variety of parameters, such as the volume and type of information that is revealed about them, what ads are delivered, and in what format. They also want messages they can reply to. Consumers also want ads delivered in a different medium than the one they are using to enjoy the original content or service. For example, when watching sporting events or movies on TV, consumers would rather receive messages or offers over their mobile phones, instead of interrupting the action on TV. These results point to a “holy grail” for advertisers – consumers actively want to interact with merchants.
There are many forms of interactive advertising today. The mobile phone is ubiquitous, and mobility creates important personalized advertising opportunities, because it can recognise opportunities,and alert the ad delivery infrastructure that a consumer is in an interesting place, has just made a specific kind of call, or downloaded a specific piece of content – generating context-rich advertising inventory. This is a superior model, driven by a real-time, context-aware, individualised generation of ad inventory, that can be applied to nearly all types of fixed, mobile and broadband services (which are all converging anyway).
The selection of who to send an ad to depends entirely on your knowledge of the customer, from technical and network context, to likes and dislikes, and demographics. Communications networks can monitor the context, identify when advertising opportunities exist, and provide some scheduled ads based on a package sold to a customer. They can match subscribers to their market segments, (e.g. youth, high spend etc.) to make ads more relevant, in partnerships with advertisers. The advertiser does not need to know the identity of the consumer, only that they are a qualified, context-favourable target, and would probably welcome a promotion or suggestion.
If you look at the internet, Facebook, Google, and Twitter are leading the way, by learning more and more about their customers each day. This makes them well placed to exploit and monetise these relationships. Operators need to start thinking less like a telecom network and more like a social network.
Whilethe internet is an improvement on traditional legacy networks which have usually delivered uniform, mass-marketed services, with little personalisation or real-time control, it still has a number of limitations: cookies are stored on consumer devices, and are therefore transitory; profiles are siloed by service and site, and personal information is spread and duplicated across many sites, instead of being stored and updated by a single, trusted third-party. Currently, there is little to no integration between telecom networks and web-based site capabilities.
However, telcos can improve on the internet’s model by evolving into ‘smart pipes’, providing intelligence which can be utilised to enable or enrich virtually any in-house or third-party application. These services include authentication, preferences and location, and, more powerfully, they mean that, as common service enablers, the same user preferences can be provided, whether a service is a message, call or a broadband data session.
There are various technologies being introduced to improve customer targeting and interactivity, but those innovations are also the ones bringing us spam, junk mail and pop-ups. There is an opportunity here for the telecoms industry, as it has both the opportunity and the technology to get it right.
Service providers can create a more effective personalised advertising channel, capable of better targeting, greater consumer acceptance, greater interactivity and ultimately a better value proposition for all three major stakeholders – telecom companies, advertisers and consumers.
Patrick McCarthy is VP for service delivery solutions at Telcordia