Friday, June 13, 2008
The Killer Opp(ortunity): How To Provide The Missing Link In Contextual Mobile Advertising
Mobile advertising is indisputably a potent way to generate value. Consumers are exposed to offers they may find useful; marketers build brand recognition, recall, and revenues; and mobile operators and service providers capture more revenue from increased mobile data traffic and, in some cases, purchases.
Indeed, a recent report by Juniper Research is convinced this ecosystem will deliver benefits. It predicts mobile advertising spending will reach $1 billion this year and rise to $8 billion by 2013. The growth levels we know from Internet advertising have arrived full-force in mobile.
While mobile advertising is viewed as new, the checklist to deliver brand messages to the consumer is a repeat of the checklist we know from other forms of advertising such as TV and press. Put simply, the end-game is about delivering a genuinely useful message. If the advertisement that accompanies the content or service is relevant, the customer listens… If the advertising is off the mark, it’s bothersome noise or, worse, dismissed as spam.
The more relevant the ad, the higher its value. And there is another key benefit to consumers: Advertising subsidizes the cost of the content or service. At the other end of the equation, the ad agency generates revenue for each advert impression or click (in the Internet and on mobile) , and the media provider (mobile operator, broadcast network, Internet Service Provider etc…) makes its money in the middle, supplying both the service and the ads.
But mobile has a huge ace playing in its favor: It is location-aware. This capability, whether supplied by GPS or any number of other technologies, enables companies to target ads to location. This paves the way for ads to be well targeted, and delivered to the right person at the right time and place.
This form of context-aware advertising is powerful and the use cases are compelling. Take the example of a restaurant that has some empty tables in the early evening. It might be a good idea to advertise to people whose profile indicates they would appreciate the restaurant cuisine. It’s an even better offer if the restaurant could deliver their message to people nearby and likely to pop in on-the-fly. In addition, the mobile advertisement could include a call-to-action, such as the opportunity to reserve a table via a WAP site, respond to receive a discount, or pass the offer around to friends who might join the meal. As I said, context-aware advertising is about getting the right advert to the right person at the right place and at the right time. It’s quite literally an offer consumers can’t easily refuse.
Are we there yet? I would suggest that many of the factors are already in place to make context-aware advertising on mobile devices a success.
First, consumers are already familiar with personalized advertising based on data gathered about their habits and preferences. Retail loyalty cards, such as Sainsbury’s Nectar and Tesco’s Club Card, are classic examples. It’s a mindset that translates easily to mobile.
Second, the consumption of media content on mobile devices (music, video clips, games, ringtones, mobile TV, etc...) is on the rise. In fact, Juniper Research estimates that mobile advertising linked to mobile TV content and consumption will soar by 2010. We happily accept advertising on TV in our living rooms. Surely we won’t mind it on mobile.
Finally, some mobile operators and companies are already building successful businesses on the premise that consumers will accept advertising in return for free mobile services such as mobile email and calls/texts. Blyk - the MVNO on the network belonging to Orange UK - and Virgin Mobile USA are two recent examples.
With all the pieces falling into place we can ask ourselves two questions:
1) Is the consumer ready for context-aware mobile advertising?
2) Is there technology ready to deliver advertising seamlessly integrated with content and services?
We believe the answers are:
1) Yes
2) No, but it is getting closer.