Since leaving my former position as Director of Mobile at OMD to take on a new role inside Microsoft’s Mobile Advertising group a little over a week ago, many of my agency colleagues have asked for my advice on how mobile can become a center of both excellence and profitability for their respecitve firms. While I’m always happy to dish out ad hoc learnings to anyone with a friendly ear and a pint of Guinness, I thought it would also be valuable for me to share my formal approach to this specific challenge at OMD.
Bringing OMD into a leadership position in the mobile media landscape would be the most formidable challenge of my career, but before I get to it a little backstory is needed. Immediately prior to taking on the OMD gig I had a few weeks of downtime by way of a two week honeymoon cruise in the Baltics. In between the cocktails, Copenhagen and the unmentionables I was also squeezing in a little dork time in the form of some suggested essay readings, mainly focused around the open source software movement. I was immediately struck with the similarities between a large scale software development process and of my own upcoming mission at OMD… and soon there after the approach and resulting action plan below began to take shape.
“Plans are useless but planning is indispensable.” – Dwight D. Eisenhower
Like any good plan, mine was a living document. But while some tactical details may have become casualties of my shifting priorities, the plan’s core principles, objectives, strategies and overall approach remained remarkably true throughout the process. It was these primary processes that made up the heart of my approach to the challenge at hand, and it is this that I mainly wish to share.
The document below contains most of the components of my plan, in the form of a “Statement of Purpose” to senior agency management. While some called it my “Jerry Maguire” moment, and others had fun needling me with “Cathedral”, “Bazaar” and “Sisyphus” references for the following year, I think most will agree that it led to a highly productive period for both the agency and its clients with respect to mobile media. In the following months I also learned that the approach is also not altogether unique, as at least one other media agency (Razorfish) utilizes a similar distributed approach to emerging media, including mobile. That said, I firmly believe in the approach outlined below, and encourage others to experiment with the strategy if faced with similar challenges.
Enjoy… and of course I welcome your feedback!
Download the PDF – THE GREAT BAZAAR – AN AGENCY GUIDE FOR MONETIZING MOBILITY.pdf
The Mobile Advertising Bazaar
A Media Agency Blueprint for Monetizing Mobility
While there is widespread agreement that rapid prominence of the mobile device around the globe represents a tremendous long term revenue growth opportunity for digital advertising agencies, to date the vast potential of the channel has gone relatively untapped. While excuses and marketplace misperceptions abound, simply put the inability of our industry to aptly monetize the mobile channel can be best traced to a fundamental failure of organizational philosophy.
This is not to say that agency monetization of mobile channel is not fraught with significant barriers to success -far from it. Anyone with even a rudimentary knowledge of the channel can point to any number of seemingly insurmountable challenges in the mobile advertising and marketing sectors: Marketplace fragmentation, lack of standardization, poor infrastructure and limited reach are among the most prominent. Yet it is preciously these challenges that necessitate a vastly different approach to mobile than the flawed models employed by our competitors.
The following pages provide just such an approach, a recommendation set that isolates and circumvents the trappings of previous systems by drawing upon the successes and learnings of industries faced with similar challenges, the sum of which form an agency model for the successful monetization of the mobile channel that scales on a national, regional and global level.
While the barriers for the media agency wishing to successfully monetize the mobile channel are too numerous to quantify in the limited confines of this work, chief among them are the following key challenges – all of which must be overcome if the agency is to activate the channel on behalf of its clients.
Marketplace Fragmentation. The mobile advertising and marketing landscape is besieged by an expanding variety of tactical channels with few dominant players and frequent new entrants. The sheer volume of mobile advertising publishers, networks, infrastructure providers and other entities wishing to capitalize on the ever evolving sphere of mobile opportunities bog down planning cycles and overwhelm the creative process.
Lack of Standardization. An intimidating array of violently competing technical and advertising formats fueled by powerful marketplace gatekeepers and evolving business models confound the strategic planning process and hamper the swift planning and execution of mobile advertising initiatives.
Poor Infrastructure. The mobile channel is further distressed by comparatively limited research sources, rudimentary planning, ad serving, tracking, optimization tools, and an inherent inoperability between mobile publishers, networks, operators and key channels – all of which often necessitate redundant and/or manual operating procedures, ultimately adding incremental labor stresses to the entire system.
Limited Effective Reach / Low Perceived Value. While varying significantly by tactic and geographic region, overall there is a general marketplace consensus that the reach potential and creative options of mobile marketing and advertising channels lag considerably behind most forms of established offline and digital media.
Certainly many of the aforementioned issues are inherent in any emerging medium, however one could make a compelling argument that (with respect to mobile) the intensity these challenges has escalated to a scale that dwarfs previous “like” emerging media scenarios; Whether driven by the sheer technical complexity of the channel, global ubiquity or simply soaring investor interest, the frenzy surrounding the emergence of mobile as a marketing medium has inflated these barriers by orders of magnitude beyond what has been previously experienced by most other forms of “new” media.
The Cathedral and the Bazaar
In searching for a model that would satisfy these vast hurdles, inspiration has been drawn from a seemingly dissimilar industry that has faced a very similar set of challenges: The software industry.
As with the mobile marketing and advertising system, the software development process has been similarly stymied by a confluence of like phenomena: competing technical standards, dizzying market fragmentation and inadequate toolsets. Like the marketer, the software engineer also struggles with a complex problem-solving process straddling both creativity and analytics, rooted in real time business objectives, aggressive deadlines, and overarching cost constraints – all driven by multiple objectives and taskmasters.
While challenging on any level, these issues become increasingly prominent when attempting to scale the software development process to meet the accelerating complexity of global software needs. This challenge was most notably documented by Fredrick Brooks in his 1975 breakthrough tome “The Mythical Man Month,” where the author famously identifies the core paradox that has become known as “Brooks’s Law.” Put simply, it follows that in software development, like most “tasks with complex interrelationships… adding more men [to a project]… lengthens, not shortens, the schedule.”
This apparent contradiction is due to escalating internal communication needs and the inability to fully partition the labor demands, as related to the many complex and interrelated tasks that form the process of developing software. Brooks becomes a fierce advocate for what he calls “conceptual identity,” a necessary precondition for successful software development that can only come about by the work of a single mind or a small team of likeminded individuals. Railing against systems designed and developed by large teams or committees, he likens poorly managed software projects resulting “from the separation of design into many tasks done by many men” to “tragically” disjointed European Cathedral designs spawned from construction schedules spanning several generations, where “later builders attempted to ‘improve’ upon the designs of earlier ones.”
Brooks’ approach – that the best way to manage the software development process is to severely restrict the number of persons involved in its design – became the industry’s standard, and was more or less left unchallenged in the software community until the emergence of the open source model in the early 1990’s. In a 1997 landmark essay exploring the open source movement, “The Cathedral and the Bazaar,” Eric Raymond challenged the notion that complex software systems “needed to be built like Cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation,” and instead promotes a model “resemble[ing] a great bazaar of differing agendas and approaches.”
However, it should be noted that Raymond’s concept of the “great bazaar” should not to be confused with the contemporary notion of “crowd sourcing” or other simplistic “free-for-all” distributed labor models. In his analysis Raymond identifies several specific preconditions necessary for successful implementation of the open source model:
A leader that recognizes good design ideas from others, and possesses the charisma to attract people and keep them interested and engaged with the project’s success.
The presence of a “plausible promise;” that the project will eventually “evolve into something really neat in the foreseeable future.”
Access to a (cheap and easy) medium to exchange and archive knowledge.
“Openness to the point of promiscuity.”
Additionally, Raymond identifies several specific “truths” or “lessons” that further inform the success of the open source model:
Contributors for any given project are self-selected.
Every good work of software starts by scratching a developer’s personal itch.
Good programmers know what to write. Great ones know what to rewrite (and reuse).
Given a large enough co-developer base, almost every problem will be characterized quickly and the fix obvious to someone (or put another way, “Given enough eyeballs, all bugs are shallow”).
While one can test, debug and improve [a project] in bazaar style, one should not attempt to originate a project in Bazaar mode.
If you treat your beta-testers as if they’re your most valuable resource, they will respond by becoming your most valuable resource.
Any tool should be useful in the expected way, but a truly great tool lends itself to uses you never expected.
As demonstrated in the following pages, Raymond’s “necessary preconditions” and “truths” to the successful open source model can be similarly leveraged to great affect by the agency attempting to activate the mobile channel on behalf of its clients.
Pros and Cons of the Agency “Cathedral Building”
Before delving into the proposed “Agency Mobile Bazaar” model for the monetization of the channel, one must first examine the current system utilized by media agencies to activate the channel in order to identify why the model is failing to meet industry-wide expectations.
As defined by the previous section, it is apparent that “Cathedral Building” remains the near universal agency model for the monetization of the mobile channel. The process basically works as follows: A “mobile expert” (or in very rare cases, a small group of two or three members) is responsible for keeping up to date with the latest movements of the mobile landscape; distributing a highly condensed version of such information (usually in the form of periodic emails and/or a series of “mobile 101” presentations); and consulting with brand teams for the purposes of creating, selling in, and executing mobile advertising/marketing campaigns.
The model has gained widespread acceptance due to the fact that (at least on the surface) it appears to be an efficient use of agency resources. Information related to mobility and mobile advertising/marketing is highly specialized, lending credibility to the application of an “information silo” in the form of the “mobile expert.” Additionally, to date agency revenues related to mobile advertising planning and buying have been nominal at best, significantly restricting the resources available to the agency to put against mobility. Primarily, it is these key concerns that have given rise to the current system: The emergence of the agency “mobile expert” and the resultant “cathedral building” model.
Unfortunately this model clearly fails to meet the core objective of leveraging an expertise in the mobile channel for the benefit agency clients. To begin with, the sheer volume of knowledge needed to consistently and competently “stay abreast” of the mobile space, inclusive of the latest research, leading players, usage cases and toolsets is beyond the capabilities of a single individual to follow, much less communicate to a larger group.
To this add the Sisyphean process of providing “spot” mobile consulting services to a large group of brand teams – all representing a wide range of clients from dissimilar business categories. The term “spot consulting” is used as (unlike the formal consulting process) the consultant must settle for an intermittent, irregular and at best tangential connection to the core goals, brand objectives and strategies as crafted by the client and agency brand team, with little prospects for a more meaningful bond.
The Spot Consulting process typically begins with a brief period whereby the brand team briefs the mobile expert on the particular goals of the campaign or plan, followed by a condensed working period where the Mobile Expert crafts a set of mobile recommendations. It should come as no surprise then that the “spot consultancy” model ultimately yields a consistently low quality of work, as the consultant is operating with severely limited knowledge of the account while operating under appreciable time constraints.
Beyond this, the process is an overwhelmingly inefficient use of agency resources: Brand teams are forced into woefully incomplete yet wastefully redundant internal briefing cycles with the Mobile Expert, while the Mobile Expert spends an inordinate time attempting to “flash learn” account histories, permanently distracted from his or her of core goal of information-gathering and sharing. This affect is of course compounded when attempting to scale the model, which ultimately results in even lower quality work, lost revenue opportunities, staff burnout and turnover.
The Mobile Bazaar Model for Media Agencies
Clearly then a need arises for a scalable agency model for organizational expertise in mobility. The following “Agency Mobile Bazaar” Model draws upon the lessons learned from the open source software development movement by tapping into the primary resource common to all digital media agencies: A large pool of ambitious, digitally-savvy, young marketing professionals.
At its core, the Agency Mobile Bazaar model uses open source software techniques to “de-silo” mobile expertise and executional competency to arrive at the following desired state:
Like other forms of digital media, mobile media planning, buying and execution occurs at the account team level, by individuals with an intimate understanding of the account; its needs, goals and personality.
The mobile media planning and execution process achieves efficiency and effectiveness through a shared organizational intelligence, populated by an accessible, relevant knowledge base and a talented pool of (internal) mobile media enthusiasts.
High-level mobile strategies, alliances and other corporate-level directives will be driven by an individual or core group of mobile specialists focused on the channel.
To summarize from previous sections, the successful agency model for the monetization of mobility must effectively meet the following core product-specific challenges: marketplace fragmentation, lack of standardization, poor infrastructure and limited channel reach / low perceived value, and labor-specific challenges: maintaining a level of high quality work/output; preserving a market-leading expertise within the mobile channel; limited resource availability; and scalability across multiple geographic regions, brand teams and client business categories.
Recommendations for the implementation of the Mobile Bazaar Model are summarized in the following table:
1 – 3 months
Educate brand teams
Recruit initial participants
Share learnings (one-to-many)Spot consulting
Shared network access
3 – 9 months
Establish shared workspace
Spot consulting / collaboration
Build expertise among base
Recruit additional participants
Expand participant base
Nurture community identity
Share learnings (few-to-many)
9 – 18 + months
Establish expertise among base
Eliminate most spot consulting
Recruit additional participants
Cement community identity
Problem solve (many-to-many)
Share learnings (many-to-many)
Planting Stage. The first stage of implementation may appear to the casual observer as “Cathedral Building” in that the mobile expert is occupied many of the same tasks, such as meeting with account teams to educate them on mobile advertising, and making ad hoc recommendations to their account teams as requested. The key difference is that while certainly all of these activities are important, the primary objective of the planting stage is to build interest in / recruit participants for the “Agency Mobile Bazaar.”
Recruitment can be accomplished in a variety of ways, but in general will leverage the following benefits to the target, who will likely be a junior to mid level member of the digital account team:
Ambition. Mobile is the future of interactive media; Become an early leader in the medium and your career will rise with the prominence of the channel.
Exhilaration. Simply put, Mobile is cool. iPhones are cool. GPS targeting is cool. QR codes are cool. Pattern recognition is cool. Mixed reality gaming is cool. IVR, SMS and even Bluetooth can be cool. This is the reason you’re in digital media in the first place, and not outdoor or print, right?
The recruitment process will begin in person (with the individual digital client teams) at the “Mobile 101 / State of Mobile” presentation, where the mobile advertising space will be positioned in the most hopeful and exciting of lenses. This is not to say that client teams will be fed “marketplace hype” -quite to the contrary. Client teams will be presented with a realistic outlook of the channel, the potential which will nearly speak for itself (a knowledgeable and charismatic presenter is also a requirement).
Near the end of the “Mobile 101 / State of Mobile” presentation the Mobile Expert will solicit members for this new group of “Agency Mobilists” (working title), the sole “membership” requirement of which will be a genuine interest in mobile marketing –and nothing more. Group Directors may be consulted in advance of the meeting for recommendations on possible “best fits” within their team, as well as for any additional help in recruitment process. The primary goal for the Planting Stage is to recruit one Agency Mobilist per digital account team.
During this phase the Mobile Bazaar community will begin to take shape by a variety of tactics, all of which will rely on decidedly low tech and/or Web 1.0 tactics: Bi-weekly emails of “cool” mobile marketing news, interesting case studies (nothing boring!); and access to key resources such as mobile network reach, targeting and contact information and presentations (shared via access to a shared network partition). Community feedback for this early phase will be passively solicited in the form of manual techniques, such as email. From its earliest possible point, any “official” community correspondence and/or language will be inclusive, supportive and decidedly casual.
Additionally, “spot mobile consultancy sessions” will be still be utilized during this phase to support the client teams, but executed quite differently than previous models, and with two added goals: The passing of mobile expertise, and the forming of community bonds. Whereas in the past the mobile expert would, in perfect “Cathedral Building” style, work up a set of recommendations more or less in isolation from the client team, in the Bazaar model the mobile expert would work directly with the client team’s resident Mobilist, providing insight, support, resources and recommendations, but will refrain from actually building the proposal proper.
By encouraging, reviewing, supervising and supporting (but not actually authoring) the mobile recommendation set, the mobile expert will in affect transfer ownership of the work to the Mobilist, instilling all the pride and satisfaction that comes with possession. If no Mobilist is yet present in the client team in question the consultancy session itself becomes another recruitment opportunity. Ultimately this process – that of planning, selling-in and executing of mobile strategies and campaigns – will be shared with the group via the aforementioned communication channels. Community feedback will be encouraged but never expected, observing Raymond’s rule of self-selected participation.
Cultivation Stage. The intermediate phase of the implementation plan is most prominently marked by a marked upgrade in collaboration tools. Shared network drives and other manual communications channels such as PowerPoint and Excel will be de-emphasized in favor of more effective tools. While the email list will continue to be important, more often than not it will be utilized to point traffic to a relevant internal blog posting or internal wiki article. Information from the legacy formats (such as an Excel database housing data on mobile ad networks, for example) will be transferred to the new, more accessible (and malleable) mediums.
The internal blog, published primarily by the Mobile Expert, will assume the ideological center of the Mobilist community, providing an essential axis for the group and the expression of its personality. Postings will reference / drive traffic to relevant internal wiki articles; highlight any prominent forum chains, internal case studies or ongoing projects; praise good works and humbly revel in the satisfaction and exclusivity of expertise.
That said, the blog is by definition a “one (or few)-to-many” medium, and (even with the ability for users to post comments on existing posts) as such is not a true “community channel,” hence the need for the more robust communication channels such as the wiki, list serve and forum. While early participation in these channels will likely be limited to the Mobile Expert and a small group of like-minded emerging media specialists inside the agency, it is eventually through these channels that greater Mobilist community will begin to share information about working projects, learnings, vendors and other points of interest– soliciting others for help on a particular challenge or simply bragging about the results from a recent campaign.
The legacy Spot Consulting process will gradually give more ground to the “Spot Collaboration” method, where the Mobile Expert’s advice is supplemented by that of the community. As with the previous stage, the Mobilist – not the Community and certainly not the Mobile Expert – will assume an ownership position of any and all mobile campaigns, as the client teams become the driver of mobile activity within the agency. It is expected that the Mobile Expert will be consulting on key clients, but the actual need for his or her services will vary considerably from account to account.
The Mobile Expert can now begin to focus more effort on identifying corporate partnerships and alliances advantageous to the agency, and researching new mobile planning and execution tools as they emerge in the marketplace. To this the leader’s role is to keep the base engaged by continuing to introduce exciting and entertaining innovations from both the corporate level and from the field, promoting any local “mixers” or industry events of interest, and maintaining an inclusive environment where ideas and new thinking are valued. Recruitment efforts will continue but will not be given the same emphasis as in the Planting Stage, as it is expected that organic growth will offset any natural turnover in the system.
Harvest Stage. It is the final stage of the implementation plan where the agency will be able to fully reap the benefits of the Bazaar. At this point the Mobile Expert’s relative contribution to the community will appreciably diminish, as the cooperative spirit of the group increasingly asserts its dominance. The leader will continue to participate in community-building efforts via blogging and other means, but will by no means overshadow the conversation. Mobilist Bazaar itself, via shared knowledge and experience, the will eventually become “the mobile expert” in and of itself, collectively superseding the limited resources that the Mobile Expert can bring to bear on any single project or campaign.
As Mobilists begin to plan and execute mobile advertising campaigns independent of the Mobile Expert, the latter can focus more fully on high-level corporate initiatives. Spot Collaboration activities by the Mobile Expert will no doubt continue on key accounts, but in a greatly reduced volume and at a much higher level – significantly increasing the quality and effectiveness of such recommendations.With this process, Mobile expertise is continually distributed to the client teams, as the model reaches its desired state.
If effectively applied, the open source model can provide a solution to the vexing “chicken and egg” scenario agencies face when attempting monetization of the mobile channel.
In the software industry the model has already produced brilliant and wildly successful software applications such as Apache Web Server, mySQL, Firefox and WordPress – applications built by a community of volunteers that have come to dominate, outperform and/or out-innovate competing products produced by many teams of full time programmers from the likes of Oracle, Sun, and a host of other industry giants.
Likewise, industries such as Medicine, Law and Finance which face a similar set of challenges (high-complexity of tasks, communication failure, poor distribution of labor, and severe time and cost constraints) are also translating the open source model as a scalable solution to meet their seemingly unique needs.As with most successes, the key to ours will ultimately lie in its execution. Beyond the few rudimentary software needs detailed above (the best of which are, ironically, all open-source / free products), the most crucial component that ultimately drives the success of any open source project is the Leader’s ability to fully embody and express the ideals of successful open source community: An egoless enthusiasm for the space, a full-throated transparency of thought and of action, and willingness to value and reward the thinking of others.
It is through the positive expression of these ideals that the community takes shape, grows, and in the end, achieves far more than any individual or formally organized group in terms of the quality and quantity of thought, insight, knowledge and productive work.
Download the PDF– THE GREAT BAZAAR – AN AGENCY GUIDE FOR MONETIZING MOBILITY.pdf
Peer into Mobilestance’s Proprietary Crystal Ball!
Well it’s that time of year again… when pundits and publishers large and small exploit the slow end-of-year news cycle to recap the old and forecast the new. Here at mobilestance it’s a extra-special time of year… as it was nearly one year ago when we formally “came out” of beta with our 2007 Recap piece and spammed it out to our publisher’s 3,000 + email address book. Ahh… memories!
This year, rather than spend the next thousand words rehashing what was undoubtedly the most exciting year in mobile since the advent of the crazy frog ringtone, we decided instead to take the easy way out and peer ahead to future… casting our lot into a sea of like-minded posts from across the blogosphere.
So what will occur in 2009 at the intersection of Mobile and Marketing? Will location become (as Dan @ Organic so eloquently put it in a recent Facebook status) “just another input”? Will MMS finally become interoperable between carriers and ShortCodes, and finally emerge as a realistic marketing vehicle? Will a wave of consolidation sweep the industry, as smaller independent mobile agencies, technology vendors and ad networks become casualties of the “great recession”? Will newly legislated digital privacy-controls arrive just in time to kill the mobile web? And of course the big question on everyone’s minds: Will mobile finally jump from the backwater of marketing budgets known as “emerging,” grow some legs, ditch the tail, and finally walk upon solid (budgetary) ground?
So read on then, fearless time shifters… and arm yourself for the ensuing complexities that will envelope our fledgling industry in the coming year!
Mobilestance’s Top 10 Mobile Marketing Predictions for 2009
2009 Will be the Year of Mobile. After many false starts the Long Joke will finally end… and Mobile will finally have its moment in the sun. With the rising popularity of smartphones; the lower cost of mobile data; and the pervasiveness of mobile broadband, internet and other “beyond voice” services, Mobile (with a capital “M”) will finally achieve critical mass in the US – and agencies, brands and business infrastructure providers alike will finally start paying attention with the purse strings.
2009 Won’t be the Year of Mobile. What would a mobile marketing prognostication piece be without some conflicting signals? Call it hedging my bets… but I just couldn’t resist punching up the contradiction that is the current state of mobile marketing. Sure, everything I said in the previous ‘graph is dead on… the crystal ball is crystal clear on that. But will that make 2009 “The Year of Mobile?” Hardly. Sure, mobile has made some great strides of late in terms of its effectiveness as a marketing channel, and there is NO doubt that will come even farther, faster in 2009. But sorry kids, it simply will not find its way out of the “emerging” bucket when it comes to budgeting. No, the “Year of Mobile” can only be declared after we see dedicated “mobile” advertising, CRM and/or marketing budgets… or (at a minimum) a substantive breakout from a larger “digital” line… and with 2009 shaping up to the second coming of the “Flight to ROI” of 2002 (warning: pdf link) , we’ve probably got until 2010 until we can finally herald the end of the Long Joke. In the meantime there’s still plenty for Mobile Marketers to do – namely, hone our skills and prepare ourselves for when the money spigot really opens up in 2010.
Mobile Search Comes of Age. OK, enough with the levity… let’s get into some serious forecasting. If there’s one thing we’ve learned about mobile usage in ’08, it’s that smartphones = search volume. While previously a mere academic curiosity, this correlation will show real legs in ’09, as legions of iPhoners, Crackberry Addicts and the like will continue take to mobile search like a longshoreman on a bender (read: heavy consumption punctuated with colorful language) . We’ve already witnessed both Google and Yahoo fine tuning their mobile search products – albeit in very different ways – and in 2009 we will see the beginnings of a real business emerge in this sector. Watch for the leading engines and agencies make a major mobile plays in ’09, as both will look to the sector to help sustain revenue growth and counter the “leveling off” of the (once interstellar) growth trajectory of “traditional” online paid search and/or SEM – as both (especially the former) begin to show early signs of maturation.
Mobile Video (finally) Gets Interesting. Along with search, the other interesting affect that comes with increased smartphone penetration is increased consumption of mobile video. I say “interesting” as in “somewhat viable” or “worth experimenting with”- which should not be interpreted as “it’s going to explode” (or even that I’m reasonably bullish on the channel). No… while I’ve been a mobile video hater for many years for reasons too numerous to count, we’ll see enough scale in 2009 to merit some testing… as after all, leveraging the moving image remains (arguably) the most effective method by which one can influence consumer behavior.
Apples Grow on Trees… While Android Picks up Steam. A no brainer that simply cannot be ignored… and the importance of which cannot be overstated. Most likely, Apple will successfully keep its momentum into ’09 by rolling out popular, yet evolutionary iPhone models (think new colors and modestly increased storage capacity/performance, rather than new form factors or revolutionary new features or price points). Android will likely see a bigger increase in Mobile OS share (albeit from a smaller base) than Apple, as Samsung (Spring) and Motorola (Fall) roll out hot new handsets utilizing the Open Source mobile OS. And speaking of Open Source, it will be interesting to see if the (reasonably) open Android starts “out innovating” Apple’s proprietary mobile OS when it comes to features and applications. As it is we’re still waiting for Google to integrate a working commerce model (safe money is on Google Checkout… duh!) into the Android Marketplace so that developers will have an easier time charging consumers for applications (expected Spring, 2009) – so it might be awhile before developers truly embrace Android as tightly as they have with the iPhone SDK. Our prediction: in 2009 Android will become the “hip incubator” for mobile application and/or OS innovation… with Apple and/or independent iPhone developers skimming the cream and co-opting the most interesting ideas of the bunch.
Biggest Losers of 2008: Motorola, Palm and Sprint Stay Alive. Notable for their ability to keep breathing, the “Crap Pack” of ’08 will not kick the bucket as so many are predicting. Sprint will slowly turn the corner in ’09 under Dan Hesse’s steady hand (is it us, or is anyone else getting a “Fred Thompson” vibe from his gently reassuring, speak-directly-into-the-camera series of commercials?), making incremental customer support improvements and leaning on that “Clearwire Thing” to leapfrog ahead in the bandwidth arms race (see “Wi-Max Casts Wide Shadow” below for more on this). The great recession saved Motorola’s Wireless business, as the venerable Schamburg, Illinois red ink factory likely found no suitable suitors. Now the company is forced to do what it does best… crank out a hit product to save the company – which we believe we’ll see in the form of a swank Android handset sometime late next year. Until then Moto will occupy itself by doing the other things it does best: bleeding market share and taking on further debt… which brings us to our last lovable looser, Palm. The fact that Elevation Partners decided to invest $100MM to keep Palm afloat just last month proves that there’s somebody out there for everybody… no matter how unsightly, aged, infirm or otherwise unappealing. Seriously, we’re not entirely sure know how much lifespan $100MM buys Palm, but we’re betting 18 months, at best.
Cash Poor Mobile Start-ups Get Snapped Up by Web, Traditional Media Players. Another obvious one that needed to be said: the credit crunch / recession combo will start claiming casualties among the most vulnerable in the mobile sector, while traditional media giants and other web firms lacking mobile chops go bargain hunting. Specifically, the time might be right for WPP’s 24/7 RealMedia to formally acquire one of their partner mobile ad networks (such as JumpTap or Millennial), should the opportunity present itself. On the Cable side both Comcast and Time Warner have already made big bets on wireless with their Clearwire investments… yet neither have much else to leverage here in the form of inventory of other mobile-ready assets. A mobile video acquisition for each of these players on the order of a Rhythm NewMedia or Transpera might just be in the cards.
WiMax Casts Wide Shadow. While 2008 was all Apple and Google, newly-formed Clearwire (not to be confused with the “old” Clearwire, which had the same management yet different investors – a confusing situation that deserves a dedicated posting of its own) quietly rolled out what we believe to be the first real mobile broadband network in the US… (OK, well in Baltmore, MD – but heck, it’s a start!). As Clearwire partner Sprint Wireless brings new WiMax hardware to market, and the high speed service rolls into new markets like Portland and Chicago in 2009, look to Verizon Wireless and AT&T to fall all over themselves to attempt to bring their competitive 4G “LTE” (Long Term Evolution) product to market by the end of the year. It’s a moot point if Clearwire ever really rolls out a national WiMax network, or instead (like many are predicting) runs out of cash sometime in 2009 (prediction: cash-laden Clearwire partners Intel and Google will pony up an additional round of investment in the network while cash strapped partners Comcast and Time Warner sit this round out – slowing, but ultimately sustaining, Clearwire’s national rollout) what matters most is that Clearwire and WiMax is giving the industry a huge kick in the pants… and with this we’ll finally get the true mobile broadband experience we’ve all been waiting for. Cue the brass band!
MMS Gets its Act Together (Just in Time to Become Totally Irrelevant). It’s no secret that MMS never really caught on with the public… and even when the carriers got their act together in 2006 and brought cross-carrier MMS interoperability online, the bloom was already nearly off the rose, as it were. Marketing applications remained uber-niche, as lack MMS support for cross-carrier short codes left brands with two, equally unappealing options (e.g. the use of either a ten digit phone number or an email address in the primary Call-to-Action). Still, while some consumers are giving the “Most Morbid Service” a second chance, the last nail in the coffin may have come from Apple, when it shafted the technology by not supporting it on the iPhone. Now it seems the CSCA , along with their strong-armed cousin, NeuStar, are working with the US carriers to bring MMS support to intercarrer (common) ShortCodes… which, if achieved, would greatly expand the effectiveness of the channel as a marketing medium. The question is, will this work be completed before the technology becomes altogether irrelevant? Perhaps… although no one (including us) is betting on it.
Application “Bubble” Doesn’t Burst… Yet. A minor one, but just squeaks into our Top 10 (take that, “Privacy Concerns!”). First, in order to predict that a bubble won’t burst, you need to prove the existance of a bubble. Case in point: iFart (point proven!). Now just when will the “App Bubble” burst? Well, it would seem that in order to “burst”, the bubble would first need to achieve maximum volume, which won’t happen until iPhone and similar “ReallySmartPhones(TM)” achieve critical mass (we’re thinking 15-20% penetration) – and that’s not happening for at least a year or two – even in the rosiest of scenarios. Still, for all the whooplaa around “+300MM iPhone app downloads in the first six months of app store,” some have acutely pointed out that the iPhone app growth curve has already started to flatten out. That said… we’re likely to see a whole new crop of iFarts-like hits in 2009 – and needless to say Mobilestance awaits on baited breath.
Well folks… there you have it – our top 10 predictions for 2009. Feel free to leave a comment if you feel we’ve missed something… or if you just want to throw some gasoline on the fire… and check back with us throughout the year as we continue to chronicle this thing we call Mobile.
Any ideas? I have been asked to speak at a (for now) unnamed conference on the topic next month and I’d really appreciate any advice and/or insights from you, the highly-knowledgeable mobilestance.com reader base! Nothing long, mind you… even a quick sentence or two would be greatly appreciated.
The paragraph on the session is as follows:
Mobile: The Advertiser’s Prospective. Wireless operators, publishers, ad networks and handset manufacturers are quickly bringing mobile advertising opportunities to market, but what do these companies need to do to attract brands to their offerings? This session explores the foundations of mobile advertising from the advertiser prospective – everything from targeting, tracking and accountability, to differing ad units, mediums and pricing models – in order to hone in on what mobile needs to achieve if it is to satisfy the demands of today’s discerning advertisers.
Please leave any suggestions in the “comments” section at the bottom of the post. Your help on this is greatly appreciated!
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).
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.”
Evan Neufeld, VP & Senior Analyst, M:Metrics
Steve Smith, Media Critic, Mediapost and Access Intelligence
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]
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!
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]
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.
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.
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]
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
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.
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]
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.
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.
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.