Five Year Old Case Studies, Babbling Activists, Sales Pitches and a Sneak Peek at What’s Coming Down the Regulatory Pipe.
Washington at its Worst?
By now many of you may have caught the occasional blurb / sound bite from this week’s Federal Trade Commission “Town Hall” on Mobile Marketing entitled “Beyond Voice: Mapping the Mobile Marketplace.” What you probably haven’t been exposed to is the unique combination of lunacy, tedium and righteous indignation that filled much of the event.
Luckily our hyperbureaucratic friends sought fit to publish complete online transcripts of the proceedings for those either unable or (more likely) unwilling to attend the two day event.
What’s this? You say you don’t have the time or the patients to read through the reams upon reams of “thoughts” relating to our industry’s regulatory future? Well fear not! Mobilestance.com has got you covered!
So sit back, relax, and learn of “The Shocking Truth” of what occurred at the FTC “Town Hall” on Mobile Marketing (part one in a special two part series).
May 6th
9:00 - 11:00 (AM EST)
Welcome and Introductory Remarks Commissioner Jon Leibowitz, Federal Trade Commission
Content and Commentary
Jon Leibowitz, Commissioner of the Federal Trade Commission kicks things off with some levity in the form of a video clip featuring the world’s first mobile phone (”unveiled right here in Washington D.C. a few blocks away”, the clip is of Maxwell Smart’s famous “Shoe Phone”). From there he starts with familiar stats on mobile voice and data usage in the US, but then quickly transitions into the actual purpose of the “Town Hall” (we’ve put Town Hall in quotes because lets face it, if you’re going to have a “town hall” in the “township” of Washington, D.C., and its being run by a US Gov’t regulatory body… call it what it really is: A hearing).
Leibowitz runs down a short list of “a host of [mobile marketing] consumer protection challenges” (read: things he aims to regulate), setting the tone of the two day proceedings:
Disclosure issues. Do consumers understand what advertisers are selling and how much it costs? Mobile devices make disclosures even tougher. How can a marketer explain key terms and conditions on a screen the size of a small Post-It?
Mobile advertising itself. Recent surveys have found that most consumers are annoyed by it (What? Advertising is annoying? Alert the media!)
Spam. Unwanted and sometimes offensive content… Text Spam invades your time, your privacy and your wallet. (Agreed)
Location Based Services. The sense of big brother or ex-boyfriend knows where you are at any given moment really raises troubling issues about government access, physical safety and personal privacy.
Location Based Mobile Marketing. Does America really need cell phones with ads flashing like lights in time square, do we want our PDAs turning into turning into digital pocket bill board? Personally I worry about clutter. (Leibowitz is really pushing the envelope here… sure, these are presented as his personal opinions, but when presented in this context it gives the impression that the FTC is angling to regulate what is and isn’t “tasteful.” I appreciate the sentiment, but he should really keep his aesthetic concerns to himself. Does he somehow think FTC stands for “Federal Tastemaker Commission?)
The Kids. A mobile phone that gives them access makes them easy pray for aggressive marketers… and we need to consider whether additional protection for kids and children are warranted.
Then, to make sure everyone in the room doesn’t forget who’s in charge or what’s at stake in this so-called “town hall”, Leibowitz drops the widely-reported word bomb on the room: “We strongly believe, as many of you know, in self-regulation - but we are also going to police the wireless space.” Make no mistake… Leibowitz is on the beat, nightstick a-swingin! “Our agency has a long history of studying new technologies and the consumer protection and competition issues that are embedded within these new technologies,” He continued, “And we have a long history of working with our sister agency the FCC when consumer protection concerns arise in the Telecom context.” At this point you can almost smell the tension in the room. Finally, he takes it up a notch by pointing out what’s at stake: “You can take our example of our work with them on do-not-call on Spam.”
And there it is… he might as well have just said “We are your overlords, you private-sector pawns. Kneel before us and grovel at our regulatory feet. ” And grovel they did… for the next two days, in fact.
Session 1: The Mobile Marketplace — What, How, and Who
“This session will provide an introduction to the role of mobile commerce, beyond traditional voice service, in today’s society. This overview will include a discussion of demographics, consumer habits, and popular and anticipated uses of mobile services within the United States. It will also refer to developments in mobile commerce outside the United States.”
Participants
Evan Neufeld, VP & Senior Analyst, M:Metrics
Steve Smith, Media Critic, Mediapost and Access Intelligence
Moderator
Ruth Yodaiken, Staff Attorney, FTC Division of Marketing Practices
Content and Commentary
A whirlwind of stats, graphs, charts, definitions, et cetera on US habit and usage of mobile data services. Not a bad data set here (note: get your free research data in this section’s transcript, it’s a fairly comprehensive presentation). At the end of this session everyone is supposed to be comfortable with the alphabet soup of mobile terminology that will pervade the remainder of the talks. I suspect anyone not in the industry is trying their best to keep up… but finding these two a little manic in their rapid shifts from topic to topic.
Here’s a taste of the kind of language and topic jumping that was bound to throw the room: “Someone has a 3G phone for example is 1.4X likely to do social networking, 1.5X to browse, et cetera. Smart phones, similar. Though only 6.2% of the total US device market at this point, this is also another where you see tremendous increase in usage, with 4X and 3X for social networking browsing and music and video. Where this all ties in is the iPhone. Everybody talks about the iPhone. [I’m] not necessarily a huckster for apple per se. [In] my mind the iphone is an example of a phone with a good interface for browsing. Some say the secret is the interface, the URL doesn’t suck, there’s kind of what the standard is. So it’s less about the iPhone is the device and interfaces are catching up with consumers. When you do that the usage is tremendous.” No disrespect to Evan (whom I actually agree with on all of these points), but does anybody think that the room is getting all of this? I’d bet dollars to donuts that the good folks at the FTC aren’t among those nodding their heads.
Session 2: Mobile Messaging — Unsolicited, Premium, and Interactive Messaging
“This session will provide an overview of text/SMS (Short Message Service) and MMS (Multimedia Messaging Service) messaging, introduce innovations, and highlight billing concerns.”[Transcript]
Participants
Alykhan Govani, Head of BD, MX Telecom
William Haselden, Assistant Attorney General, State of Florida
Lisa Hone, Assistant Director, FTC Division of Marketing Practices
Content and Commentary
A lot more talk educating the room on the consumer benefits of mobile marketing balanced with the need for responsible practices (opt-in only, full disclosure, yadda yadda). A lot of the recursive, meandering language that is familiar to anyone who has attended a panel session at CTIA in the last five years… a tactical example here (say, MMS blogging), a brand reference there (say, Papa John’s), a consumer confusion point tossed in (fear of spam, cost, or just not knowing what a short code is), a statistical reference followed by a rapid-fire strategy statement (e.g. “it’s all about the mobile context”) - and then just repeat with different phrases. Sorry if that comes across as a little cynical, but there’s only so much of this one person can be exposed to before the sarcasm kicks in. Mozes then goes into a txt2screen demo, and walks us through what could well be their sales presentation (wait, this is CTIA!).
Next up is William Haselden, the Florida Assistant Attorney General, who walks the room through some of the very worst examples of bait-and-switch, “free ringtone” (I mean, $9.99 per month) marketing. Make no mistake, the Florida Attorney General’s office has a well earned reputation for their willingness to prosecute consumer trade practice offenders - and he’s got the room’s attention. His examples of Florida’s idea of regulating the space are highly detailed, and many are quite reasonable… so (for example) that when people click on a box that says “nine ninety nine” that they know that they are paying “$9.99 per month,” etc. Some are extremely granular regulatory suggestions, right down to color contrast restrictions so that prices can’t be hidden in (nearly) the same color as the page background (but who is going to enforce all of this? Ah… a bigger budget for the Florida Attorney General’s office, perhaps?).
Leigh Schachter, Senior Litigation Counsel for Verizon Wireless, finishes off the session with a talk on unsolicited SMS messages. She opens with what was basically a fairly comprehensive 101 on “how to execute a spam SMS campaign,” including instructions on how one would send unsolicited sequential text messages to handsets via email gateways on a carrier by carrier basis. Kind of reminds me of the Tyrone Biggums Drug Awareness bit on Chappell. Everything a young spammer might need to get started… Kids, get out your pencils! Her comments on the lengths Verizon goes through to thwart these efforts are impressive (from filters to prosecution), but ultimately the audience is left with the sobering reality that this is an issue (like email spam) that just isn’t going away anytime soon. It’s a real credit to the carriers that most mobile users aren’t even aware that SMS spam is even an issue at all. Go get ‘em, VZW!
May 6th
11:15 - 12:30 (PM EST)
Session 3: Mobile Applications — Games, Widgets, and More
“This session will offer a series of demonstrations about the many possibilities offered by modern mobile devices, which are barely recognizable from the cell phones of yesterday. Industry panelists will discuss how different mobile ecosystems open up the world of applications, from games to social networking.” [Transcript]
Participants
Steve Boom, SVP of Connected Life, Yahoo! Inc
Andrew Elliott, Director of Services and Software, North America Go-to-Market, Nokia
Thomas C. Ford, Global Market Strategist, Consumer Products, Opera Software
Rich Miner, General Manager of Mobile Platforms, Google Inc.
Moderator
Ruth Todaiken, Staff Attorney, FTC Division of Marketing Practices.
Content and Commentary
Review of the development and distribution challenges facing downloadable and web-based mobile applications. Differing device, OS standards, and of the carrier walled gardens. Standard Yahoo GO demos and the like, and Google’s preference for openness as the solution for many of these market barriers (including, appropriately, security - using the old “false sense of security that comes with high walls” argument that Microsoft has basically proved to the world with their closed - and thus highly insecure - Windows and Internet Explorer products). Well played, Google.
May 6th
1:45 - 3:00 (PM EST)
Session 4: Location-Based Services
“This session will offer a roundtable discussion of the emerging world of location-based services, through carrier-controlled environments or other mechanisms. This discussion will include reference to broadcasting commercial appeals and coupons to phones. There will be a discussion of disclosures about tracking and consumer control of information.”[Transcript]
Participants
Michael F. Altschul, SVP and General Counsel, CTIA
Tony Bernard, VP of Operations, Useful Networks
Alissa Cooper, Chief Computer Scientist, Center for Democracy and Technology
Tim Lordan, Executive Director, Internet Education Foundation
Fran Maier, Executive Director and President, TRUSTe
Moderators
Rick Quaresima, Assistant Director, FTC Division of Advertising Practices
Peder Magee, Senior Attorney, FTC Division of Privacy and Identity Protection
Content and Commentary
Overview of the state of the LBS market, GPS and WiFi triangulation techniques, and various approaches to E-911 compliance. The CTIA has provided a very comprehensive breakdown of each of the US carrier’s LBS service offerings followed by their recommendations for industry Best Practices (all in all quite a good read). You can download here (warning: .pdf link). Many of their best practices hinge on the fact that current statutes governing this area deem the account holder, rather than the actual user, the party with right to set LBS data sharing privileges (child safety comes up often). Other areas of concern touch on disclosure (they recommend a lot), the need for securing the consumer’s explicit permission (opt-in) prior to engaging in location based marketing (nothing shocking here) and length (if any) of data retention (what he cleverly refers to as the “first cousin of security”).
Next up is the Center for Democracy and Technology, “a 501C 3 non-profit public policy organization dedicated to promoting democratic values and protecting constitutional liberties on the open Internet, that includes the mobile Internet and other mobile media.” As a watchdog group for consumer privacy in the digital age (these guys are the behavioral targeting industry’s worst nightmare), the CDT has plenty to say about LBS, including proposing their own set of standards they’ve published under the rather alarmist moniker, “Who’s Watching You Now?” (warning: .pdf link). It seems that many of their arguments stretch the concept of the individual’s expectation of privacy to the limits of rational thought… that because people “walking down the street and by the coffee shop don’t necessarily expect an ad for a latte to pop up on their phone” somehow means location based ads are 100% inappropriate (sidebar: when will folks tire of the “walking by Starbucks and get an ad on your phone” example? Don’t these people understand that having your business on every other street corner pretty much negates the need for location based marketing in the first place!) . CDT then veers way off topic in a lengthy diatribe exploring the dangers of government access issues to location data. I say “off topic” because this is a “mobile marketplace” discussion, after all - not an open discussion of all things related to privacy. Does the CDT think that somehow the Government is going to purchase this data? Seriously, this kind of agenda mongering wastes everyone’s time, and does little to advance their cause.
Overall, issues of consent, recurring notification, “approved LBS services” (complete with a “seal of approval”), child safety, and “where to draw the line?” (zip code? 300 meters? 2 meters) dominate the discussion. If it wasn’t obvious before today, it’s clear by the length and number of questions from the audience that LBS lies at the heart of consumer privacy concerns as it relates to mobile. Nothing else comes remotely close.
May 6th
3:15 - 5:00 (PM EST)
Session 5: Mobile Advertising and Marketing - The Transition and Adaptation to Mobile Devices and the Small Screen
“This session will examine the general transition of advertising and marketing to mobile devices, discuss mobile-specific advertising campaigns, and address issues such as the targeting of advertising in the mobile space and strategies that advertisers use to adjust to small mobile screens.”[Transcript]
Participants
Jean Berberich, Digital Marketing Innovation Manager - Mobile, P&G
Jeff Chester, Executive Director, Center for Digital Democracy
Susan Duarte, Counsel for Marketing Practices, Sprint Nextel Corp
Jim Durrell, Director of Product Management, Greystripe
Gene Keenan, VP of Mobile Services, Isobar Global
Hairong Li, Associate Professor of Advertising, Michigan State University
Marci Troutman, Founder, Siteminis, Inc.
Moderators
Mary K. Engle, Associate Director, FTC Division of Advertising Practices
Jamie Trilling, Staff Attorney, FTC Division of Advertising Practices
Content and Commentary
The grand finale for day one sported an all-star panel that didn’t fail to disappoint. The session started with an examination of Asian markets as (presumably) a precursor for what we can expect here in the US in the next few years (yes, yes - we all know the flaws that model presents, but at least it presents a refreshingly optimistic future of the US mobile marketing space!). This followed by more research (winner of the “most bullish” award was an M:Metrics stat claiming that 98% of US 18 to 24-year-olds own a mobile phone, with 92% using SMS. While we all agree that 18-24 is the “sweet spot” in mobile here in the US, 98% and 92% are pretty big numbers. I believe that’s even higher than Cable TV’s reach in the same demo). Ogilvy is talking about their interactive Time’s Square billboard for Dove. That one never gets old. P&G is talking about their Cover Girl WAP site. Ditto.
Luckily the FTC thought ahead and brought in Jeff Chester from the Center for Digital Democracy to stir the pot a bit. He was certainly in his element up there, mixing it up with all those agency, network and advertiser-types (How dare they try to measure the millions and millions of dollars they spend on advertising every year?! For shame!). He starts off on relatively safe ground in raising non controversial issues of childhood obesity and advertising, but then quickly lapses into his war against all forms of data-driven marketing (hey Jeff, how would you like to pay $18 for a tube of toothpaste? Keep it up and you just might find out!). On a personal note, Bob Walczak has to be pleased that his “MoPhap” was listed among his usual suspects of “rogue marketers” (read: behavioral targeted ad networks). Too bad Jeff didn’t get the memo that as of several months ago MoPhap underwent a much needed rebranding effort and is now known as Ringleader Digital.
Like many of the day’s earlier activists, Jeff did himself a disservice by bringing unrelated matters into the conversation. Take this example: “We are at a point of — I think almost unprecedented anxiety in the American confidence we have problems related to the current mortgage crisis, certainly, and gas and oil prices have gone up, we don’t want to have a system, particularly tied to youth, that is running amuck because it’s tracking everything we’re doing encouraging this kind of impulse buying.” Somehow data-driven marketing tactics are related to the current crisis in the credit markets? I mean, I realize that everything is connected, you know, in the Daoist, George Harrison-type sense… but can we all agree that we don’t want our industry regs influenced by such obvious windmill-tilters?
Stay tune’d for the second half of this disturbing, yet deeply entertaining odyssey!
New Format Lowers Barriers to Entry for Risk Averse Mobile Advertisers.
Last week Google quietly introduced mobile image ads last week by way of a nondescript post on the official Google Mobile blog.
The announcement is significant as this is the first time that a major publisher has committed to selling mobile display ads on a Cost-per-Click basis. The ads are purchased from the familiar AdWords dashboard, utilizing the search giant’s tried and true keyword bid for placement engine. Curiously, pixel dimensions on the new units do not follow current MMA-recommended standards for mobile ad banner sizes and aspect ratios, but instead follow a previous iteration of the guidelines.
Our regular readers will recognize that Mobilestance has been a vocal supporter of performance-based mobile display ads, as their availability opens up an entirely new base of mobile advertisers - from the more conservative major brands (”I’ll buy it when you show me it works”), to the smaller, more budget conscious advertisers (”I’ve got 10k a month to spend, and you want me to spend it on your untested format?”). Additionally, the display ads should help smaller publishers start to make a business out of their nascent mobile websites.
Still, several challenges and unanswered questions remain. Like Google’s existing (text-based) mobile ad offerings, conversion tracking continues to be problematic for mobile handsets unable to accept cookies (anywhere from 50 - 80% of total us handsets, or 20 - 40% of mobile traffic - depending on who you choose to believe).
Additional questions that come to mind include: Approximate # of monthly avail impressions (US, GLOBAL)? Approximate monthly reach / # of uniques (US, GLOBAL)? Approximate # of publishers in the Google “Mobile Image Ads” (display) network? (US, GLOBAL) Any publishers that I might have heard of? (any premiere pubs, or all “long tail”)? Any premiere advertisers signed up yet? Examples of “going CPC’s” for various keywords.
I plan on testing the ads soon, so eventually I’ll share whatever I can here w/o disturbing the peace…. Until then, enjoy Google’s self-produced home movie on their new offering - a serious “tell” that the Googliers are pretty excited about their new product.
Separate Moves By Nielsen, DoubleClick and AdMob Significantly Enhance the Mobile Web’s Viability as an Advertising Medium.
It’s as if three of the biggest leaders in digital marketing huddled up last week and decided to tackle some of the thorniest issues facing the ad-supported mobile web. “Nielsen you go left and take unduplicated audience tracking… DoubleClick, you go long and take third party ad network integration… and AdMob, take the right post and hit mobile site analytics.”
Nielsen, wasting precious little time integrating Telephia’s mobile web tracking suite into their existing wireline web tracking tools, released their “TotalWeb” analytics product last week. The new Nielsen product boasts the ability to track unduplicated audience across over 200 major PC and mobile web sites, a first-of-its-kind achievement and a highly significant milestone in the evolution of the mobile web as a marketing channel. Could this put Nielsen out in front of comScore in digital?
To show off their new product, Nielsen announced some fairly interesting “% [reach] lift” stats produced by mobile web sites complementing PC sites - in various content categories. While on the average, PC sites increased their reach by an impressive 13% via the mobile web, results differed widely by content category. Weather and Entertainment (both seeing 22% lift) led the field, followed by Games and Music (15% lift each), Email (11%), Sports (10%), Business Finance (4%), Social Networking (3%), Search (2%), and Shopping / Auctions (1%).
A few things about these findings immediately jump out to me:
Some of the categories assumed to be the most significant either to the mobile context (shopping) or the early-adopting demo graphic (sports, business), appear to be less about reach (when used in tandem with online) - and more about frequency and/or sales channel development.
Surprisingly, the Weather category (a mainstay of the mobile web and tops among individual site traffic stats) is tied with Entertainment (historically a relatively weak performer in mobile web stats) in terms of “% lift” (when combined with online). I’ve no decent explanation for this apparent outlier, but unsubstantiated several theories come to mind.
Next up is DoubleClick, who announced their mobile publisher-side solution “is integrating with mobile ad networks including AdMob, Google’s AdSenseTM for mobile content, and Millennial Media’s premium MBrand network as well as its DecktradeTM performance network.” Similar to how DoubleClick enables online publishers to segment and doll out their available advertising inventory to a variety of ad networks and third party resellers, the move aims to improve inventory fill rates, a key concern among mobile publishers, by way of a rules-based dashboard. The idea is that mobile publishers will be able to garner the highest CPMs and fill rates possible by optimizing their inventory across a variety of independent sales channels.
No doubt the move is a welcome one and is absolutely needed for the long term viability of the mobile publishing industry, it will be interesting to see if the move actually helps mobile publishers in the short term in light of the existing glut of mobile ad inventory. That said, apparently DoubleClick is not (seemingly) short on publishers interested in their new solution, as (while none have yet signed on to use the platform), they have informed us that no less than five major mobile publishers had inquired about the system before the announcement was 24 hours old.
Finally, we have AdMob, who announced their new mobile website analytics tool set, aptly named “AdMob Analytics.” The move is highly reflective of their (admirable) determination to be “The Google of Mobile,” in that AdMob appears to be using Google Analytics as its model. By design, the tool is aiming to be easy to use, accurate and dependable, and above all else… FREE! Any of you mobile publishers out there who got a notice from Hitbox in the last few weeks can attest to the value of that last one (what is it about Omniture that just rubs people the wrong way? Oh yeah… something about contracts renegotiation by decree).
While only in beta, AdMob Analyitcs is set to provide the mobile web community with something it desperately needs: decent and affordable site stats. Clearly AdMob will benefit from a system where mobile publishers can easily understand how their campaigns are performing (where their traffic is coming from and what its doing once it gets to their site), but so will the rest of the ecosystem.
All in all, a pretty good week for the mobile web.
Agencies are often confronted with a common challenge when drafting a mobile advertising plan: Should they go to the mobile ad networks, or should they attempt negotiate directly with the individual mobile publishers? Both have significant advantages and limitations that Agencies would be wise to keep in mind when planning and executing their mobile marketing plans.
Mobile Ad Networks. As mobile often commands a relatively small percentage of an advertising budget, most agencies do not usually have the internal resources to plan and negotiate sophisticated mobile advertising plans on a publisher by publisher basis. This challenge is compounded by the relative inefficiency of the mobile advertising marketplace. Overwhelming manual, most mobile RFP processes are just beginning to become formalized - and even when established, usually require the agency to juggle multiple phone calls and emails to each individual publisher in a plan.
That said agencies look to mobile ad networks, such as AOL’s Third Screen Media, Ringleader Digital, AdMob or Millennial Media to streamline this process. By aggregating and bringing to market large tracts of mobile ad inventory, Mobile ad networks play a highly important role in the mobile advertising ecosystem. However, while these networks greatly simplify the process of mobile advertising planning and buying for the agency, Media Buyers cannot rely on the networks alone to provide objective media planning services, as the two often have conflicting interests.
This is because while both ad networks and individual publishers share the goal of extracting the highest price for their advertising inventory that the market will bear, ad networks are also faced with the daunting task of satisfying a large network of highly dissimilar mobile publishers. The networks risk losing publishers to rival networks should they fail to sell a certain percentage of each publisher’s inventory. This creates a potential conflict of interest between the network recommending the most targeted and effective inventory, versus recommending inventory solely on the basis of appeasing their publisher base.
Buying Direct. While more time consuming, Agencies negotiating media plans directly with individual mobile publishers can also reap tremendous dividends for their clients. As is the case with online media planning, individual mobile publishers such as The Weather Channel, ESPN and The New York Times often provide a much higher level of integration than that offered the ad networks, including access to exclusive editorial content, custom promotional programs, as well as highly integrated, cross media campaigns.
It should be noted that a common misperception is that “buying direct” from individual publishers automatically results in huge price advantages (versus purchasing mobile ad inventory through an intermediary such as a mobile ad network). In fact there is should be no price advantage in either model, as publishers must “sell” their advertising inventory to ad networks (for resale) at significantly discounted rates versus those found on the open market. Furthermore, considerable market pressures encourage mobile publishers to establish identical price floors for both their internal sales forces as well as any external sales channels, such as mobile ad networks and other resellers.
Recommendations. Obviously both the Mobile Ad Networks and the Individual Mobile Publishers play important yet highly differentiated roles in the mobile advertising value chain - with the networks providing the broadest reach, while the individual publishers providing increased promotional and mobile content integration.
Clearly then, best practices dictate that agencies should utilize both Mobile Ad Networks and individual mobile publishers in the planning and execution of mobile advertising plans. Agencies must cultivate relationships with key mobile portals if they are to bring innovative integrated mobile advertising opportunities to their clients. Additionally, Agencies should also look to Mobile Ad Networks in order for their mobile campaigns to achieve desired levels of scale and reach.
That said, Agencies need to take the time to scrutinize each site recommended by the networks by respectfully requesting a rationale its inclusion. At a minimum, mobile ad networks sites should be able to provide agencies with an aggregated site demographic or content target data as justification for inclusion in a plan.
Report Identifies US Market, Messaging and “Mobile Subsidized by Advertising” as Hottest Areas.
As inevitable as the changing of the seasons comes another mobile advertising report from eMarketer. The report carries the subtitle “After the Growing Pains,” although “A Prelude to Growing Pains” might have been a more apt tagline.
As with earlier eMarketer reports, the work contains an analysis of primary and (mostly) secondary research relating to the global mobile advertising market, along with a smattering of quotes from industry heavyweights and all-stars. While most of the research cited in the piece comes from reputable, independent third party sources, the quality of the data varies from section to section, and becomes somewhat corrupted by several sources containing obvious lack of independence (such as data from Third Screen Media on the “Average Price for a Mobile Marketing Campaign,” or AdMob’s report on “Worldwide Mobile Advertising Impressions”). While interesting and no doubt impressive on an anecdotal level, such data unfortunately cannot be viewed as objective research.
Market size. Fascinatingly, eMarketer deems the US as the most dynamic region for mobile web advertising due to “its position as the largest interactive economy.” While we have no data that directly contradicts this conclusion, it would seem likely that other global regions where mobile data services are far more utilized (Asia-Pac, Europe and Latin America), would be more attractive from an mobile advertising standpoint.
The report identifies 2012 as the year that Asia-Pac will usurp the US in total mobile marketing spending “largely due to the huge middle classes in China and India who use mobile as their primary interactive screen.” Indeed, the middle class in BRIC nations is “expected to double between 2006 and 2009, and [is projected to] reach a total of one billion people in 2015. That will match or even exceed the total combined population of the US, Western Europe and Japan.”
The report breaks down mobile advertising budgets into three areas: messaging, mobile display and search (other areas of mobile advertising, such as in-game or video, are deemed to small to be measurable). The search category also counts dollars spent on sponsored directory assistance, which explains why search budgets eclipsed mobile display dollars in 2007 $83 MM to $52 MM, respectively. Overall, global mobile advertising spending is projected to rise to $19,149 MM in 2012, from $2,695 MM in 2007. eMarketer has Messaging-related campaigns dominating mobile budgets through 2012, although declining from 95% of all mobile ad spending in 2007 to a projected 74% of budgets in 2012.
Mobile Advertising by Region. While lagging behind most of the word in terms of mobile penetration, eMarketer purports that the US is currently the largest mobile advertising market, with total 2007 spending estimated at $878 MM (projected to $6,525 MM by 2012). Mobile ad buying is said to be driven by digital ad buying shops here in the US.
The report cites Western Europe as (currently) the second largest mobile advertising market ($1,074 MM in 2007 to $5,550 in 2012). Asia-pac, currently at $700 MM, is projected to move into second place in 2012 (with mobile adverting spends in the region expected to rise to $6,877 MM by the time the next year of the dragon rolls around).
While growth in the Asian markets is primarily viewed as a function the overall economic growth on the region (this, coupled with the fact that the mobile handset is seen as the primary internet device in Asia), the story in Western Europe is muddied a bit by the largely unknown effects of flat-rate / “unlimited” data plans (currently being rolled out by Vodafone, T-Mobile, Orange and 3UK), as well as the over-sized pre-paid mobile population in Europe as compared to other regions (it is believed by some that pre-paid users are more accepting of mobile advertising). Lack of 3G network capacity is identified as the main reason that messaging is (and will continue to) dominate mobile ad budgets. That said, the US mobile web population is expected to grow from 37.9 MM in 2007 to 91.7 MM in 2012 (unfortunately research in the the measuring mobile web penetration in markets such as Japan, China Australia and the UK is relatively out-of-date, with some sources going as far back as 4Q 2005!).
Consumer Attitude. The report cites a September 2007 Neilsen Mobile report examining global exposure and response to SMS-based advertising. Overall, the now well-known study cites relatively high SMS advertising exposure and response numbers, although (predictably) response rates decline in nearly a linear fashion as exposure to SMS advertising increases (on a market-by-market basis). Specifically, the study found that “58 Million US mobile subscribers has been exposed to a mobile ad during a 30-day period. This equates to about 23% of the total US mobile population. Moreover, nearly half (or 28 million) reported that they had responded at least once to a mobile ad. Nielsen Mobile also reported that 32% of those surveyed said they would accept mobile advertising if it somehow lowered their overall mobile bill, while 13% would accept advertising if it improved the selection of mobile content and services.”
Mobext To Lead US Mobile Charge for Paris-Based Holding Company.
Havas, the world’s sixth largest media agency holding company, is opening up a Boston office for Mobext, it’s mobile advertising and services agency. Mobext currently has offices in Brazil, France, Mexico and Spain. Phuc Truong, formerly of “mobile shopper” firm MobileLime (now Modiv), was named as Managing Director of Mobext’s Boston office.
The move will complement Havas’ existing North American digital media agencies, such as Media Contacts, MPG, and Euro RSCG. “Edward Montes, who has been serving as regional manager of Havas’ Media Contacts North America unit, has been tapped as regional manager of Havas Digital North America, and will oversee both Media Contacts, as well as.. Mobext,” this according to MediaPost.
Mobext presents itself as a full service mobile marketing agency, with services ranging from “Strategy, Mobile Internet Consulting & Development, Mobile Video, WAP Advertising, MCommerce Strategic Approach, Advanced Messaging Services (SMS & MMS), Content, Services & Applications, 3G Marketing [and] Bluetooth (Proximity Marketing).” While its not clear which (if any) of these services Mobext outsources outright, it is likely well-positioned inside Havas’ North American operations to capture mobile marketing business from its sister agencies, including attractive US clients such as Dos Equis (Euro RSCG).
Mobext lists Volkswagen, Barclays and Caja Madrid among its clients.
Verizon, FOX Take on Additional Sales Partners as US Mobile Ad Inventory Glut Continues.
Millennial Media recently announced an agreement with Verizon Wireless which allows the ad network to begin selling a portion of the carrier’s on deck mobile ad inventory. Prior to this move, AOL’s Third Screen Media was the only third party repping Verizon Wireless inventory. It is believed that Third Screen will continue to sell a portion of Verizon’s on deck ad inventory as well as act as the carrier’s primary ad server.
In a similar move, Cambridge, Massachusetts-based mobile ad network (and white-label search provider) JumpTap announced that had signed deals to sell the mobile ad inventory of both NBC Universal and FOX’s Mobile Entertainment Network (which includes Jamba, as well as mobile extensions of FOX programs such as Family Guy and 24). Millennial Media currently is FOX’s exclusive third party sales partner for all FIM mobile sites, such as mySpace mobile, FOX Sports and rottentomatoes.com.
All these moves would be enough to drive media planners crazy, if only they were paying attention - and therein lies the heart of problem. With well more than half of mobile ad inventory going unsold over any given period, its no wonder publishers are feeling a little antsy about the ability of their sales partners to close the deal. And why aren’t buyers buying? That’s really the question, and we’ve a hunch the publishers wont find relief simply be adding additional sales partners.
For our friends on the supply side of the mobile advertising market, we offer the following advice:
First, you must accept that you are selling a niche media product - a situation that probably will continue for the next three years at a minimum. This means stop with the “reach story.” Stop telling buyers that “over 250 million US consumers own mobile phones” and start with a more sophisticated segmentation strategy that tells buyers that you can efficiently deliver a specific audience against their specific needs. You’ve already got a solid out-of-home story, but why not do what the niche cable nets and magazines do - start by investing in some real research that shows how your audience indexes against specific product categories (MRI would be a good start).
Second, try really experimenting with pricing models other than CPM. Sure, AdMob and a few others have brought text-based CPC inventory to market, but what about getting bold and offering up display-based CPC inventory as well? This will do much to alleviate the inherent risk that buyers must accept in your untested and unproven form of media, and with most of your impressions going unsold month after month you have very little to lose. What’s more, if we’re to believe that mobile click-thrus are really averaging over 2%, then surely you wouldn’t mind putting your numbers on the line with a model that pays out based on campaign performance?
Finally, get togther with each other and figure out a way to track uniques across all publishers, ad networks and carriers. Without this, there is no way your media fits into an (even soft) reach/frequency model - the backbone of modern media planning. Saddle up and get it together. You can’t blame media buyers for this one…
Of course, blame cannot be lopped only on the supply side of the equation. Our friends on the buying side have their work cut out for them as well:
Stop complaining about the “unattractiveness” of existing mobile ad units. Sure, mobile banners are small - but that’s not the point. When viewed as a percentage of the screen they actually are quite reasonably-sized. Hold your phone up to your face (as one does when one browses the mobile web) and it will take on the prominence of a 65″ plasma. Unfortunately mobile is just too new a medium to start messing about with seriously interruptive forms of advertising. Waiting for Verizon to approve that full screen “roadblock” ad unit? Don’t hold your breath.
Take the time to understand what’s really out there. Shaken by rumors of $50 mobile CPMs? You might be surprised to learn that quality mobile display inventory can be had for under $5. Still not happy with mobile ad banners? Well, folks like Greystripe have full screen units for sale, and there are plenty of content integration options with the likes of Buzzd, UpSnap and Free-411. These guys are simply dying to meet you and tell you about what they’re got for sale, so do everyone a favor and put aside 30 minutes a week to meet with them. Get smart on the mobile publishing side and your clients may just reward you.
Finally, challenge the publishers and ad networks to craft real solutions to your clients business objectives. This means sharing (some) information on what you’re trying to accomplish on the media side in terms of strategy, reach and intended action. Too often media salespersons are simply left guessing as to what value their product can add a larger media plan. Is it any wonder they often fall short? I know from experience that these media sales people are a very creative, sharp and hardworking sort. Give them the information they need to succeed and they just might surprise you with a program that makes you both look like rock stars.
We don’t pretend to have all the answers, but we’re more than comfortable with the concept that the more things stay the same, the more mobile advertising will stagnate.
Agree? Disagree? Leave a comment and continue the conversation.
Amobee, Winstar and Quattro Aim to Boost Position, Profitability.
Boost Mobile, the self-proclaimed “lifestyle-based telecommunications brand” focused on the prepaid (pay-as-you-go) US market, announced that they are partnering with Mobile Ad Serving Firm Amobee to bring their on deck mobile web advertising inventory to market - effective immediately - with Acura and Fox Searchlight Pictures already on board as advertisers.
Initially the Boost Mobile advertising inventory will consist of mobile web banner units, although it is well-known that Amobee’s “carrier grade” mobile ad server is fully-capable of serving far more interesting ad units, such as SMS sponsorship, mobile video ads and other enhanced units. Whether Boost ultimately decides to bring additional mobile ad formats remains to be seen.
In addition to the usual mobile web targeting parameters, such as content category and handset targeting, Amobee will leverage its direct carrier-relationship to provide more sophisticated mobile advertising services, including the highly sought-after “session-independent frequency cap.” No plans have been announced regarding more controversial approaches to mobile ad targeting, such location-based or behavioral targeting.
In a noteworthy move, Amobee has chosen to augment its current mobile ad sales partner Winstar Interactive with US-based Quattro Wireless. Our regular readers will recall that back in December of last year mobilestance predicted that Winstar alone would be unable to sell enough ads to satisfy Amobee’s business objectives, and that additional sales partners would ultimately be needed.
It is unclear how ad accounts will be divided between these Winstar and Quattro, but clearly Amobee will need to actively manage this process to avoid any awkward channel conflicts that might arise with multiple (and independent) sales organizations selling the same product to an overlapping customer base.
Analysis. As Boost Mobile is a wholly owned division of Sprint Wireless, Amobee is well positioned to unseat current US legacy “on deck” mobile ad serving companies - specifically Enpocket (now Nokia), who currently manages all the on deck WAP inventory on Sprint - as well as Third Screen Media / AOL, who manages (and sometimes sells) the Verizon Wireless on deck inventory.
Quattro Wireless, who will be celebrating its first birthday in May of this year, has already impressed many with a series of strong moves - including their launch with P&G and Univision Movil, their long term / tail GetMobile platform, and the securing of key talent. Together with Amobee’s well-distributed technology and Boost’s highly attractive audience, these players just might have what it takes to achieve the ultimate (and so far elusive) goal in the mobile advertising marketplace: serious profitability.
UK Operators Try a Radical Approach to Tackling Thorny Issues Like Commerce and Advertising: Cooperation.
It’s obvious that the mobile marketing industry must resolve several key issues if mobile is ever to emerge as a legitimate marketing channel. These overreaching issues, mostly relating to a lack of standardization and of market access, are simply far to broad to be solved by any single entity within the space, regardless of their size, technological prowess, or market share. These big issues must be addressed by the industry as a whole, and unfortunately too few global markets possess the maturity to put aside their competitive instincts and collaborate on market solutions that benefit all members of the mobile value chain.
Thankfully, operators in the UK seem determined to buck this trend.
Looking back, clearly one of the first truly significant examples of (mobile marketing-related) industry-wide cooperation was the achievement of “intercarrier SMS” functionality, or the ability for consumers to send text messages to anyone, without regard as to whether the sender or the recipient are on the same wireless network or not. Obviously this challenge could have only been met on an industry-wide basis, with all the carriers in a particular territory coming to agreement on the base technologies and economics of the system. The results speak for themselves: Text message volume increased 350 percent in the first seven months after interoperability was introduced in the UK in April of 1999, and a similar effect was seen after interoperability was introduced in the US in 2001. In hindsight, most in the industry agree that text messaging would have remained a niche service with fairly limited appeal had this key milestone not been reached.
In further gestures of industry cooperation, the British operators appear keen on tackling sticky issues like mobile commerce and accountability in mobile advertising with a similar unified approach. Both areas, commerce and advertising, face key hurdles that can only be addressed by the industry at large… and leave it to the British to continue to set an example to the globe on how cooperation and civility has the potential to “elevate all peoples” –or in this case, all peoples looking to monetize mobility.
Easy Billing on the Mobile Web. Starting back in May 2006, the five largest UK operators (Vodafone, Orange, 3, O2 and T-Mobile) created the Payforit organization - with the goal of standardizing and launching the necessary systems to enable “seamless and secure” (off-deck) WAP commerce of digital content. From an organizational perspective, Payforit builds upon the successful “Aggregator” premium SMS model in that the m-commerce standard establishes a group of “Accredited Payment Intermediaries” who utilize a common set of API’s to connect directly to all five carriers… in this case for the purposes of authentication, and (ultimately) carrier managed billing. The system officially launched in September of 2007, and early results indicate the standard represents a marked improvement over existing premium SMS billing systems. In the two months following the launch, Bango reported that “92 percent [of Payforit transactions] were completed successfully with an error rate of less than 1 percent… with refund levels at below 0.01 percent,” representing a “significant reduction in the need for costly customer care” Furthermore, Bango found that the average transaction speed “across all five networks [was] five seconds” - another significant improvement over premium SMS. Additionally, mobile game developer I-Play reported a near “15 percent conversion rate” on its mobile web site following their implementation of Payforit
It should be pointed out that although these results are highly encouraging, Payforit is not (as of yet) the “m-commerce” silver bullet we all desire. Unfortunately Payforit is limited to small transactions of less than 10£, and only for soft (digital) products. The organization has made no public statements indicating that the carriers intend on expanding the program to include larger transactions and/or to accommodate non-digital (physical) products, unsubstantiated rumors and overzealous public comments notwithstanding. The reasons behind these limitations was likely driven by carrier unwillingness to accept the risks associated with essentially “vouching” for larger-sized, physical purchases. Additionally, a complex regulatory system in the UK’s financial sector presents significant hurdles for carriers wishing to (directly) facilitate large transactions. Currently the carriers do not fall under the UK’s (banking) regulatory system due to the low Payforit purchase price ceiling of 10£, but any increase would likely land the operators into this undesirable (read: the reddest of tape) direction.
Still, Payforit represents a tremendous leap forward in the evolution of mobile commerce. With this platform the critical obstacle of authentication via the mobile web has been overcome, and with it the comes the very real potential for secure, unrestricted mobile web-based transactions of any type of good - at any price point. In order to reach this ultimate goal we would need to see a supreme display of cross-industry cooperation, where the carriers agree to share their authentication data with the banks and credit card companies (either directly or via an intermediary). One can only imagine the tedious negotiations that this type of complex (and lucrative) arrangement would entail.
Eying Real Accountability in Mobile Advertising. As with commerce, the UK wireless operators are displaying a similar willingness to band together to take on the most significant challenge impeding the long term success of the mobile advertising market: accountability. In a joint release issued at this year’s 3GSM in Barcelona the very same five leading UK carriers announced that they had “formed a working group to define common metrics and measurement processes for mobile advertising.” The working group will be focused on drafting a feasibility study examining “the deliver[ry] of cross-operator metrics to the media and advertising communities” in the UK. No timetables were revealed other than that the group planned on releasing “recommendations” before the end of 2008.
It is no secret that there is a profound need for drastically improved mobile advertising metrics (cross-carrier or otherwise). Many industry leaders and publications have become increasingly vocal on the lack of real accountability in the mobile ad space and how this will ultimately hold back the industry if it is not seriously addressed. As cookies and page scripting aren’t viable options on the mobile web, our only real hope for true accountability in the immediate future lies with the carriers.
Ultimately, it will be interesting to see what approach the working group recommends. If history is any guide they will probably suggest a scenario similar to the aforementioned SMS and Payforit model, whereby a select few companies will be “given” (the right to purchase) preferential access to (in this case) key mobile web tracking data. This data is necessary to calculate crucial (and rudimentary) campaign stats such as unduplicated audience/reach and frequency, over multiple and overlapping wireless networks. These companies will then either act as data brokers and/or serve directly as providers of campaign and publisher-side metrics. This scenario begs some follow-up speculation, should the working group indeed decides to go down this well-worn path…
Which companies will get the nod? Traditional fixed-line internet ad serving companies and networks (Atlas, Doubleclick, etc) and their mobile cousins (Amobee, AdMob, et al) will likely be competing with the site metrics specialists (Overture) and data brokers (Telephia, M:Metrics), as well as some of the more ambitious SMS aggregators and Payforit Accredited Payment Intermediaries looking to make a more aggressive push into advertising services. Serious spoils to the victors no doubt.
What Data Points will be Passed by the Carriers? It would fair to say that at a minimum the carriers would need to pass an anonymous Unique Identifier to the ad server or other 3rd party. Other highly coveted data points of interest include subscriber IDs (mobile phone numbers), location and subscriber data. The former stands a good chance of inclusion in specialized cases should a real need be identified (such as a m-commerce extension), while the latter two seem too controversial for immediate consideration.
The Opacity of Hope? Undoubtedly the mobile marketing industry faces tremendous challenges if it is to realize its great potential as a promotional channel. While it’s commonly known that these challenges will only be met if the companies making up the mobile industry can put aside their differences and agree on common goals and approaches, it is encouraging that markets like the UK are taking a leadership position in this area. We can only hope that other markets will soon follow suit.
If this year’s SXSW is any guide, we all may have to wait a little while longer before the arrival of Springtime for mobile marketing.
SXSW. Four letters that have come to stand for authenticity, innovation, and unrequited cool.
Yet unlike last year’s festival, mobility and mobile marketing at this year’s show seemed content with recycled tactics pioneered at other festivals, some of which are now more than three years old.
On the consumer facing-side of the festival, ringtones, SMS mobs, giveaways, mobile blogging and the ubiquitous “mobile festival guides” ruled the day, while the mobile-related panels at the industry-focused SBSX Interactive Festival seemed equally content with sales-heavy “forums” and other the conference mainstays.
Mobile marketing-related festival highlights are as follows:
Festival Guides. Several SMS and mobile web-based apps provided attendees with a “mobile guide” to the countless panels, parties, performances and film premieres punctuating the hipster-friendly event. eZee, creator of WebClip2Go, created the most robust of the mobile show guides in their “SXSW Interactive Companion” mobile-web service, aggregating numerous show-related feeds into an easy-to-navigate festival portal. Other notable mobile show guides included SXSW’s official mobile site, sxsw.mobi (including a version formatted for iPhone), and an impressive offering of SMS alerts, indexed by close to thirty keywords correlating to specific festival topics such as “musicparties”, “pizza” and “wifi.”
Mobile Marketing. As if the above mobile festival guides weren’t enough, Toyota and Urban Outfitters also offered SMS show alerts as a compliment to their sponsorship of “Free Yr Radio”, which touted itself as “an online resource to make your SXSW 2008 better than ever.” An online promotion also featured a “Win YR Way to SXSW 2008″ sweepstakes, as well as an online form to sign up for mobile alerts from Toyota and Urban Outfitters. An “Airport Pickups” service rounded out the Toyota sponsorship (a glamorous ride in a Toyota Yaris, no doubt).
Panel Sessions. There was no shortage of mobility-related talk at the SXSW Interactive Festival. Hats off to anyone willing to brave the hours of laborious sales pitches masquerading as info sessions in order to glean the occasional “key learning.” Mobile marketing-related panel topics included “Video Production for Mobile Devices” (Jason Meil, Sr VP, Current; David Todd, VP Content & Strateg, Eyespot; and Hank Blumenthal, Program Mgr of Emerg, Schematic), “Increase Revenue by Mobile-Enabling Your Services” (Shawn Bose, Director of Prod Strategy, uShip; C. Eric Smith, Pres, UnWired Nation Inc; and Bill Flitter, CEO, Pheedo Inc), “Mobile Media You Can Move To” (Michael Epstein (Founder, Untravel Media Inc; Silvia Vergani, Untravel Media), “Mobile Phones: International Devices of Mystery” (Nathan Eagle, Research Scientist, MIT; Jonathan Donner; Neil Churcher, Head of Design, Orange) and “Using Entertainment to Create Effective Mobile Advertising” (Adam Zbar, CEO, Zannel Inc, Lathan Hodge, Co-Founder, Rapstation; and Eric Eller, SVP Prod/Mktg, Millennial Media).
Awards. In the “11th Annual SXSW Web Awards” Mosio took the top prize in the “Sites optimized for handheld and portable devices” category, which is odd in that Mosio is a text message (rather than web)-based application. Similar to ChaCha, Misio features a human-powered search engine whereby helpful Netizens happily answer your mobile queries (this, unlike ChaCha, which utilizes paid human “search responders”).
Miscellaneous. Location-based mobile social network Loopt teamed up with Filter Creative Group to provide original, geo-specific editorial content to Loopt subscribers, this according to Fierce Wireless. The service “deliver[ed] real-time, location-based broadcasting from [SXSW]… Eight correspondents from Filter magazine provid[ed] location-specific mobile commentary to alert attendees to the most promising bands, events and parties.” Finally, Opera debuted version 9.5 of its mobile browser, releasing it at their “Rock Opera” party, an event which seemed to be noted more for its swag than for the software it was promoting. While cherished by some, it seems that at this pace Opera will finally be ready for mass use around the same time as full HTML-capable, cookie-supporting mobile browsers become commonplace (thus making Opera altogether obsolete)
Analysis: While unfortunately none of the aforementioned mobile applications (other than the Loopt piece) seemed to break any meaningful new ground in terms of functionality and consumer application, what is truly disappointing is the lack of innovation displayed by the festival’s sponsors with regard to their application of “mobile marketing.”
While giveaways and alerts have their place, how many “show guides” does a consumer really need? None of the mobile web applications referenced had any real mobile advertising component to speak of, other than “The Interactive Show Guide”, which gave a half-hearted mobile adverting effort in that it was running Google Mobile AdWords ads. Perhaps it was a simple lack of sales effort (or desire) on the part of the application developers to integrate marketing offerings from the festival’s sponsors (or competitive brands looking to ambush the show), but either way this was a real missed opportunity to extend actionable, relevant, branded messaging to festival attendees and fanboys alike.
Five Year Old Case Studies, Babbling Activists, Sales Pitches and a Sneak Peek at What’s Coming Down the Regulatory Pipe. 
New Format Lowers Barriers to Entry for Risk Averse Mobile Advertisers.
Separate Moves By Nielsen, DoubleClick and AdMob Significantly Enhance the Mobile Web’s Viability as an Advertising Medium.
A New Twist on a Familiar Tale. 
Report Identifies US Market, Messaging and “Mobile Subsidized by Advertising” as Hottest Areas.
Mobext To Lead US Mobile Charge for Paris-Based Holding Company.
Verizon, FOX Take on Additional Sales Partners as US Mobile Ad Inventory Glut Continues.
Amobee, Winstar and Quattro Aim to Boost Position, Profitability.
In a noteworthy move, Amobee has chosen to augment its current mobile ad sales partner 
UK Operators Try a Radical Approach to Tackling Thorny Issues Like Commerce and Advertising: Cooperation.
If this year’s SXSW is any guide, we all may have to wait a little while longer before the arrival of Springtime for mobile marketing.