Oren Glanz, CEO of Olista, explains how operators can increase the success of wireless services by gaining full insight into their customers experiences
For operators looking for new revenue streams, mobile advertising looks like a sure fire winner. The numbers certainly stack up: for example, a report by Strategy Analytics claimed mobile advertising revenues would reach $14.4 billion (7.3 billion) by 2011. Another report issued last year by Airwide Solutions confirmed that brands, the budget holders, are keying into mobile advertising in a reassuringly big way.
The report highlighted the fact that the number of brands planning SMS and MMS mobile marketing/advertising had doubled to 28% in a year, since a similar survey had been carried out in 2006. The report also claimed that many brands had plans to increase the proportion of the budget allocated to mobile advertising campaigns.
Such favourable statistics (of which those given in this article are only a small example) and the optimism that prevails in both industries, makes it very easy to be blinded by a glowing impression of a market sector in which there is real money to be made.
A tantalising prospect
As subscriber numbers grow and new data service introduced, the cost of high quality content will increase, causing problems with existing (flat) data plans. For those who want to be competitive, mobile advertising could be the enabler. Its a tantalising prospect for mobile operators and advertising agencies alike, two industries that are keenly aware of the need to find fresh revenue sources. While the interest and the budget is obviously there, its early days, and theres a lot that can go wrong. All it takes is a run of bad experiences, a couple of high profile mobile advertising campaigns to fail, for the bubble to burst.
In recent years, customers have become cynical in their attitude towards advertising; unsolicited spam has dramatically increased, which means marketers have to look at unorthodox methods of communicating with customers.
As with any emerging industry sector, there is a real danger that operators and advertisers alike will become overly enthused by the combination of technical possibilities and freshly minted revenues. An appropriate note of caution was sounded in an influential report issued by Analysys, in which the research firm counselled operators against flooding mobile phones with unwanted and irrelevant advertising that would destroy consumer confidence and with it the potential value of the mobile advertising market.
I agree. I am convinced that the manner in which mobile operators, and to be fair, the advertising industry, respond at this make-or-break point in the development of this potentially lucrative sector will dictate the future of mobile advertising.
Why go mobile?
Or, to put it another way, what do advertisers want from mobile operators? Far more than a basic route to mobile phone users, thats for sure.
It is clear that brands, and the agencies that represent them, see mobile advertising playing a specific role within a broader strategy. They see the mobile phone as offering a degree of direct, immediate contact with customers, that goes beyond anything they can achieve with any other medium. Given the almost emotional attachment many people have to their mobiles, advertisers realise that the mobile phone can bring them as close as theyll ever get to having a real relationship with customers.
A relationship with mobile phone users thats what advertisers want for their money. And who better to help them build that relationship than mobile operators, who are the people with a direct insight into mobile phone users behaviours, likes and dislikes. Mobile operators unquestionably have a unique perspective on the online lives of mobile phone users, so who better to ask for guidance?
The reality is, of course, that many operators dont have the adequate technology, nor do they have the processes in place, to provide advertisers with anything like the insights that are expected and, in fact, essential. Operators need a strategy that enables them to understand how consumers adopt and use new services.
Service Adoption Management (SAM) gives mobile operators an almost forensic insight into the mobile phone users experience, pinpointing precisely how and when they access the web and other value added services (VAS). It is also invaluable in aggregating groups of mobile phone users according to criteria, based on actual behaviours and buying patterns.
Lets take a step back: advertisers define the success of mobile advertising on the quality of the interaction between the advertiser and the mobile phone user. To put it more simply, mobile advertising is deemed to work when the customer enjoys and, better still, acts upon, the content and messages delivered via their mobile phone. It has to be relevant; it has to reflect the mobile phone users lifestyle, interests, and buying habits. With mobile advertising delivered personally to individuals, the need for accuracy is even more important.
With more traditional forms of advertising, advertisers are convinced to invest in space or time within a specific medium, partly by the evidence of relatively sophisticated demographic breakdowns and other insights into their audience provided by publishers, TV and radio companies. Campaigns are monitored and the resulting statistics fed back to advertisers and, where possible, built into sales support resources that will be used with clients in the future.
The appeal of mobile advertising for advertisers is that it enables market segmentation to an unprecedented degree of specificity, allowing for more precisely targeted advertising campaigns than previously possible. For operators, it means drilling down even further into user behaviour, attitudes and experience all of which are easily achieved with SAM.
Advertisers are looking for a level of personalisation that is akin to an individual user profile. Here too, SAM can help. A SAM system provides the multi-layered, highly nuanced information that is key to building accurate user profiles. Plus, advertisers want information on what works and what doesnt, the best and worst times to start a campaign and the technical features that users like or dislike; all of which will be factored into campaigns they hope will resonate with the individual mobile phone user.
With SAM, operators have an incisive insight into virtually any aspect of usage, and the ability to identify and remedy usage barriers, even those which have never before arisen. Using SAM will achieve more informed decisions and better, more targeted campaigns and content.
Lets not forget the technology; getting the basics right is crucial, because if the technology doesnt work, then neither does the advertising campaign. With SAM, operators can ensure that all the technical aspects work and problems are resolved immediately, so there are no broken links and no dissatisfied mobile phone users, and no negative impact on the perception of the advertiser.
But Does It Work?
Concern has been voiced by commentators in the advertising industry about the lack of hard evidence to show whether or not mobile advertising works. Theres understandable apprehension about investing in what many see as an untried and perhaps over-sold technology. Currently, push SMS/MMS is the most common form of mobile advertising in Europe, while in the US, its WAP browsing. With new entrants and an array of wireless and content providers trying to gain market share, mobile advertising will evolve we will see product placements in instant messaging and games as well as pre/post adverts in Mobile TV. With SAM, operators can prove that a campaign has worked. SAM allows clickthrough to be tracked, thereby providing the data the people paying for the campaign need to decide whether their investment in mobile advertising has been money well spent. In conjunction with the user profile and behavioural tracking information, information and statistics on clickthrough is vitally important in helping advertisers make informed decisions about future campaigns.
A new form of partnership
Whether or not mobile advertising does deliver on its current promise is a shared responsibility. Advertising agencies, and indeed brands, have their part to play. As far as operators are concerned, the challenge is in redefining their understanding of the mobile communications business. Of course, the technology is of vital importance and, ultimately, operators carry the responsibility for delivering services to the users mobile phone.
Where mobile advertising is concerned, operators must adapt to a new set of roles that of consultant, advisor and partner. To be effective, and work for both advertisers and users, advertising has to be tailored, relevant and effective. Even with the right segmentation and messages, mobile advertising is just like any other VAS it must work well in order to be adopted.
Furthermore, the nascent service will be driven by permission-based marketing, where users are willing to be exposed to commercials in exchange for free or subsidised services and content. In order for mobile advertising to take off, operators must deliver services that work perfectly. Only operators equipped with SAM can provide the expertise and insights needed to ensure that mobile advertising builds on the current interest and becomes a regular rather than peripheral element that agencies feel confident advocating to any and all relevant clients.