Mobile operators need to adopt an approach that allows them to target specific users with relevant advertisements, while, at the same time, managing the overall ad-related user experience, including user privacy and charging aspects, explains
For many years, advertising has been the driving financial force behind all successful media such as TV, Internet and newspapers. Nowadays, with falling subscriber voice revenues and fierce competition, there is a growing interest in mobile advertising among mobile operators as a potential new revenue source that does not originate from their subscriber base.
The mobile device is potentially the most effective advertising media ever developed. It is personal, always-on and enables precise targeting of advertising based on contextual information such as location, user profile and usage history. A recent report from Strategy Analytics predicts an incredible potential for this market and suggests mobile advertising could account for up to 25 per cent of worldwide Internet advertising expenditure by 2011. Mobile advertising as a revenue stream is rapidly increasing, with the same report predicting that mobile Internet advertising will grow from $1.4 billion this year to $14.4 billion by 2011.
Will mobile advertising be another over-hyped industry segment or can it actually deliver genuine value to the consumers?
Mobile advertising is one of the few effective, user-centric advertising media where user experience is a key success factor that should be maintained across all delivery channels. Operators need to ensure they develop a viable and sustainable business model that does not alienate consumers and damage both their own reputation and that of the brands using the service.
When TV viewers are faced with a poorly targeted advertisement during their favourite programme it is unlikely that it will damage their perception of the TV service provider. However, if mobile users continually receive annoying advertisements on their device, they are likely to place the blame on the operator.
Deciding when and which subscribers should be exposed to advertising is complex. It depends on many factors, such as the subscriber’s price plan, usage context, opt-in procedures and regulations. An agreement needs to be reached between customers and their service provider to reflect the operator’s obligation to protect users’ privacy in exchange for the subscribers’ consent to being exposed to targeted advertisements. Ensuring customer satisfaction can be a complex process; a negative experience may reflect badly on the service provider and possibly cause the consumer to refuse advertising services.
In addition to guaranteeing best user experience, mobile operators need to make sure advertising becomes a win-win situation. This can be achieved by selectively choosing which subscribers will receive advertising and serving them with advertisements that genuinely brings them value. Operators should offer subscribers full opt-in and opt-out options, and grant them various financial benefits in exchange for their acceptance of receiving advertisements. After all, the willingness of subscribers to receive ads on their devices is essential.
Targeting the advertisements to each and every individual user is important in maintaining a satisfying experience, but there’s more to it than just receiving a suitable advertisement. The advertisements also need to be adapted to the mobile device and access channel so it will be clearly presented without damaging the user’s experience and interests. Providing intuitive advertising services with interactive actions, such as context-aware ‘click to call’ or ‘click for info’ options, will further support a positive experience.
If an advertisement is non-intrusive, delivers value, protects the subscribers’ privacy, stimulates interest and is relevant to the consumer, there will be a higher propensity for service adoption.
To achieve this, mobile operators need to be 100 per cent clear how many ‘real’ customers they have and ensure the quality of the information held on each user. Names and addresses alone simply aren’t adequate. Operators need to be well acquainted with user interests and preferences to ensure they understand the user in every way possible and can therefore customise every single interaction. Subscriber profile information should be collected from all existing sources (e.g. billing, CRM, etc). Building a dynamic user profile, which is based on the user’s behavioural information, including content consumption and reaction to past campaigns, will further ensure that subscribers will be exposed only to relevant advertisements that offer them real value.
The current mobile content shopping experience is challenging for teens and young adults, but it is frequently inadequate when compared to similar services on the PC. However, there is huge potential for advertisers to exploit young mobile customers who are used to being targeted with advertising messages. This segment is more likely to embrace personalised advertisements and awareness campaigns, as long as the content is relevant, and they are offered targeted service benefits for viewing these adverts on their mobile devices. If this is done successfully, there are some inherent benefits for the operator as it is an excellent way to build loyalty and “stickiness”. Service benefits are also an effective way to take the usage of mobile services to the next level by subsidising premium content and lowering the service consumption cost barrier.
For example, the number of users willing to pay for mobile TV services is a small fraction of the total number of users who want to use the service for free. Subscribers should also be offered benefits for accepting advertisements in the form of discounts or free services. Using this approach, operators may increase their users’ satisfaction and eventually turn mobile advertising into a win-win situation.
In addition to creating a positive user experience and targeted campaigns, operators need to take a mobile-centric, holistic approach. Whether using a partner, who would be responsible for media selling and campaign management or centralising the core service system and integration efforts internally, operators would still need to use a centralised advertising system that would allow them to protect their valuable assets and maximise the mobile advertising potential. Only a centralised system that would handle the operator-side business logic, communicate with the operator’s IT systems (subscriber data, context information and access channels), and at the same time manage the rich context, user experience and targeting of the advertisements, would be able to achieve this goal.
Mobile advertising presents a huge opportunity for mobile service providers. By leveraging their current assets and positioning themselves as a key player in the advertising value chain, the mobile advertising business opportunity can be maximised while substantially reducing failure risks. To fully exploit its potential for revenue growth, operators need to realise that user experience and flexibility are the key success factors. With a high level of personalisation, targeting capabilities and openness, operators will realise the rich potential of mobile advertising and ensure its success.
Danny Kalish is CTO, Unipier