My opinion on the below article:
I personally do not see a shift back to SMS advertising. Working with one of the largest open mobile networks across Europe we see a huge increase in display and text link based advertising. They work and work well. Currently, SMS advertising can cost far too much. CTR’s on SMS advertising generally are much less than display or text links. SMS can cost an advertiser up to £200 CPM, whereas display and text links will vary from much lower CPM’s or CPC’s. Whilst with SMS you can get reach that a branding campaign will demand, the majority of campaigns in the UK market this year have been DR. Moving forward, I believe Network Operators will need to focus on more integrated campaigns across all mobile properties like: Display, Text Links, Video Pre & Post, Idle Screen, Voice Messages, SMS, MMS, Customer Service Messages and so on.
I believe agencies find mobile advertising a challenge because they are learning it is never just about selling an ad spot. Mobile advertising often forms part of a wider mobile marketing strategy tied in with CRM, Customer Acquisition and Engendering Loyalty. In addition, it often forms part of a campaign that is integrated into traditional media which again presents further hurdles. Therefore, when brands want and need to understand the entire spectrum and not just the advertising element many agencies struggle. We can keep blaming lack of clarity on where the buying points are and lack of ad-serving capabilities and reporting but I think this is a weak argument. All growing industries will have these kind of challenges. The key should be more focused on how we can work better together, understand each others skills and how this can transform into combined positive output to the client.
To summarize, Mobile is so different to traditional media. Historically speaking, it has always been ‘ONE FORMAT’ Print, Radio, TV or online. Mobile is a whole world of different formats from one device to the next few thousand, all with different capabilities and don’t forget the users all come with different mindsets. It requires specialist knowledge to effectively utilize this channel and understand the dynamics. This is not knowledge that can be shared overnight and will take time for all to learn.
Whilst I agree it has been tough year from a recession perspective I would argue that mobile marketing and advertising budgets have grown and not been cut. Well this is certainly what we are experiencing having a record year in the UK. As mobile budgets traditionally have been so small brands cut the bigger budgets in TV, Print, Radio and Online. If anything mobile budgets have grown this year and I certainly would anticipate huge growth in 2009 from 2008.
This is not going to happen over night. Online took a good part of 11 years.
by Global Telecoms Business
Mobile operators have extensive data about their customers, so why aren’t they earning more revenue from advertising? The market seems as far away as ever, according to key participants in the business
Jay Seaton of Airwide: Trying to force-fit ads to
thousands of different handsets is an issue
Mike Short of Telefónica: Mobile advertising is
going to have to have a debate about reach and
responsibility
John Rands of WIN: Sometimes an agency puts
together a campaign and will do mobile as well
Neil Wentworth of mCentric: Brands are in the
dark. They have no idea how to access people by mobile
Why has mobile advertising not had the stunning success that many have been forecasting for so long? For years the mobile industry has looked for ways to earn revenue by targeting its users with advertising — and there has even been a whole operator, Blyk, which wanted to cut call costs to zero if its customers simply checked a few ads every day.
But little has been achieved, even with smartphones that could, in theory, deliver high-quality content to phone users.
Indeed, says Nick Lane, chief analyst at research company MobileSquared, where operators are achieving anything it’s via the 15-year-old technology of SMS. “We spoke to 30-35 operators around the world,” says Lane. “Just over 60% said they used SMS messaging as the foundation for next generation messages. A lot of agencies are going back to SMS. There’s a shift away from what people were saying 12 months ago.”
James Tagg, head of mobile at ad agency Starcom MediaVest, agrees: “It’s been a very tough world for mobile advertising this year,” he says. The recession means advertising budgets have been cut around the world “and mobile was the first to be cut — massively”.
One of the reasons is that mobile advertising still earns small revenues for agencies, which employ few specialists in the medium. “Some have only two people covering mobile, compared with 30 for print advertising. There’s only so much those people can do until the money is there. We’re not losing money but we’re not making huge money.”
And behind that, “most clients don’t really understand mobile”, he adds. Now’s the time to remedy that, he says: begin to adjust now “and you’ll be in a lot better position in two years”.
One of the key problems is a lack of information on which to make decisions, says Stewart Goldberg, executive chairman of Business Logic System. “The operators don’t have the same demographics about their base that the TV companies have.”
Mike Short, vice president of Telefónica Europe disagrees: “Some of the demographics that we have is a lot better — but it’s in a different format.” The mobile industry is working via the GSM Association and mobile marketing analyst ComScore to remedy that. “We can do age, location and subject,” he says.
Lane is not convinced: “Traditional advertising is very visible,” he says. And potential advertisers can easily get information about how much it costs to advertise. “If you want a rate card [for mobile advertising] you have to go down a long dark tunnel and sign a non-disclosure agreement.”
There is widespread ignorance among potential advertisers, says Neil Wentworth, director of sales at mCentric, which runs a service delivery platform for the industry. “Brands are in the dark. They have no idea how to access people by mobile,” he says.
It is starting to shift in agencies, says Alistair Hill, a senior analyst ComScore. Its work with the GSMA is aimed at “simplifying the process of buying”, so that agencies can see metrics that allow them to compare different types of advertising — including mobile with conventional, if that is the term, online.
Mobile is too often an addition to an existing ad budget, complains John Rands, managing director of WIN, which describes itself as “a dynamic enabler of entertainment, information and interaction services”. Sometimes a brand or an agency puts together a campaign “and will do mobile as well”, he says: “It’s the ‘as well’, and that might mean just putting a text number in the corner.”
It’s better in some countries, says Goldberg. “In south-east Asia and Australia there are millions of transactions executed using two-way text.”
Simeon Coney, vice president of business development at Adaptive Mobile, adds that in South Africa mobile advertising is starting to dominate, because of an underdeveloped traditional media business.
Many customers see mobile advertising messages as spam. “What’s considered as spam is personal,” says Jay Seaton, chief marketing officer of Airwide.
Coney believes the industry has to be careful, as governments might impose rules about what can and can’t be sent. “Governments will be putting the onus on operators,” he warns. “It will be a real challenge to the industry.”
Short says: “We’d rather have a simple set of rules. Mobile advertising is going to have to have a debate about reach and responsibility.” Child protection and parental controls will have to feature in that debate, he adds. “It’s now getting to ministerial level.”
According to Hill of ComScore, mobile advertising is still some way behind online advertising. “Everything on the internet has become contextual,” he says.
Lane also believes that the parallels with PC-based advertising should not be ignored: “All we’re doing on the mobile is browsing: email and social networking, and news, sport and weather.”
Goldberg, who has just had to extend his daughter’s mobile package to 1,000 texts a month, says: “We should have 11-year-olds on the boards of our companies.” Though Hill retorts that “the average age of the mobile media user is 35”.
Gather any group of enthusiasts for mobile advertising together — and this group was at an event hosted by Airwide — and you’ll soon hear stories about mobile advertising successes.
Unfortunately, most of these stories date from those optimistic times before the recession: such as BMW sending its car customers in Germany localised weather warnings by MMS, complete with a picture of each customer’s car in the right colour.
In theory, the industry has the data that could be enormously useful to advertisers — but Short points out that one of the problems is the sheer volume of it.
Goldberg sympathises: “The amount of data on the network is huge — 120 million transactions a day.” That’s the figure for the UK. “You’d need data warehousing the size of small countries. Operators have the data, but extracting the data is a non-trivial exercise. It just can’t be done in real time.”
Short emphasises the scale of the challenge: “We know the location of 50 billion text messages a year,” he says.
But operators haven’t explored new opportunities, suggests Goldberg. They would know the identity of 150,000 people attending a grand prix or other sports event, he notes. There’s potential there to use information to send them messages.
Mobile advertising, in theory, is a lot more economical than television advertising — which reaches many more people than could possibly be interested in a deal. With mobile, “you offer a deal only to people to want to offer the deal to”, he says.
One of the problems is that there is an advanced market for advertising in developed countries, says Seaton. “In developed markets there’s not such a need to innovate.”
Smartphones, if anything, make life for mobile advertisers complicated — simply because there are so many, built with different standards. “The market’s evolving quickly, with lots of new handsets,” says Tagg.
Seaton notes that this is why in some markets advertisers have relied on the simple technology of text messaging. “Trying to force-fit ads to thousands of different handsets is an issue. That’s why we’ll be having the same advertising discussions in two years.”
Goldberg returns to the theme that the industry is ill-informed about mobile advertising: “Operators and suppliers need to educate agencies and brands,” he says. “Many just don’t know what you can do.” That, he adds, is “why text is so good” — advertisers do understand that.
So how should the market move? “It’s up to the operators to expose their assets,” says Seaton. “There will be thousands of opportunities. Application developers can leverage all the assets, not just the 15% of smartphones.”
But Lane concludes with a sceptical note: “There’s hardly any money in mobile advertising and it dominates all our conversations,” he concludes. GTB
URL Link to Global Telecoms Business:
http://www.globaltelecomsbusiness.com/Article/2346535/Operators-still-waiting-for-ad-revenue.html
