O2 More “hemmorhaging users” says mobileSQUARED

Mobile research firm mobileSQUARED says it has discovered that O2 More, the UK network operator’s opt-in ad messaging service, is hemorrhaging users, and now has less than 50,000 signed up. The company’s source could not confirm the exact numbers, but said the operator was experiencing a “significant drop” in users.

Not surprisingly, the operator stands resolute amid the speculation and says that it has actually doubled the number of subs on O2 More in the last month. That could be the case, but as mobileSQUARED notes in its post, it could only mean an increase from 24,000 to 48,000, for example.

Key personnel at O2 Media, the division of the operator responsible for its mobile advertising business, suggested the numbers should be directed at Orange Shots. But Orange was quick to confirm to mobileSQUARED that it has well over 100,000 subs and growing.

“When we launched Orange Shots at the start of the year, we said then we had 100,000 subs,” a spokesperson told mobileSQUARED. “We now have well over 100,000.”

When mobileSQUARED delved a little deeper, it discovered that there is also concern over the accuracy of the targeting, with O2 More users receiving ads that do not fit their profile. This could, however, be attributed to the lack of ads delivered. To date, O2 More serves one ad per user per day.

If the decline in O2 More subscribers is indeed accurate, mobileSQUARED believes it must only be viewed as a temporary blip in the rise of permission-based advertising. After all, mobile advertising in all of its various guises is only at the nascent stage of its development. And the process of consumer education is at an even earlier stage of its evolution.

“Despite the consumers’ pivotal role in mobile advertising, their actual participation is often given little more than an afterthought by the majority of the mobile industry,” says mobileSQUARED chief analyst, Nick Lane. “Until the consumer is placed truly in the middle of the mobile advertising ecosystem, and not shunted out to the end of the value chain, as is the case in virtually all models at present, the consumer will not embrace the medium as quickly as the industry anticipates.”

Messaging is certainly primed for advertising. UK mobile subscribers currently send over 11m texts per hour, amounting to 7.7bn per month. Alternatively, that represents up to 15.4bn engagements with the SMS medium every month (i.e. send and receive).

If a brand, or indeed an operator, can tap into that potential, says Lane, there lies the promise of significant revenues. The question facing these companies, and especially O2 just now, is ensuring the opt-in process is reflected in the actual operation of the service. At present, there appears a considerable disconnect between the service and the consumer. What does appear to be working is the opt-out mechanism.

mobileSQUARED concludes, however, that there is hope, noting that in June, speaking at the Internet Advertising Bureau’s (IAB) ‘Engage for Mobile’ event, Dean Merrion, head of O2 More at O2 Media, claimed that 67 per cent of O2 customers are likely to engage with a mobile offer. That equates to 14.34m subscribers out of its 21.4m total users.

 

David Murphy writes:

From day one, it has proved impossible to get any hard numbers out of O2 Media for the O2 More service, so well done mobileSQUARED for finding someone prepared to talk. Orange, on the other hand, has proved more forthcoming.

What surprises me about both the Orange and O2 opt-in ad offerings is the limited nature of them. Orange Shots is initially targeted at people on its Monkey tariff, while O2 said when it launched O2 More that it would be targeted initially at customers that it knows are interested in existing O2 opt-in programmes, such as Priority Ticketing and Top up Surprises.

A couple of weeks ago, I spoke to Kerstin Trikalitis, CEO of Out There Media, while researching an article I was writing for the IAB’s mobile newsletter on the subject of opt-in operator advertising offerings. She told me that in the Out There deployments, the offer is open to all the operator’s subscribers.

“We believe you have to offer it to the entire subscriber database,” she told me. “One advertiser might be interested in women aged 25-34, another might want to reach businessmen aged 45 and over. You have to be able to create something relevant for any segment. If the operator does not truly believe in it, it will fail, because you won’t get enough people to opt in and no one will want to advertise. If you’re serious about it, it will be a big success. If you’re not, don’t to it, because you are doomed to fail.”

I have penned a fuller piece on Orange and O2’s Offerings, and their aparent inability to talk to the press about them (based on our personal experience), but am waiting for the IAB piece to appear before posting it.