Ad-supported mobile operator Blyk has launched in the UK, Google has introduced AdSense for mobile, Nokia is buying Enpocket, Vodafone Czech Republic is launching mobile advertising in conjunction with Amobee … and that’s in just the last couple of weeks. Operators, handset manufacturers, search engines – it seems everyone wants a piece of the action.
With mobile ARPU stagnating in developed markets, mobile operators above all need to find new sources of revenue. “If we want data consumption to grow on mobile, then we need to start thinking of new models because there’s only so much that we can squeeze out of people in terms of their mobile spend,” says Patrick Parodi, Chief Marketing Officer at Amobee, who spoke to Analysys Research last month. Richard Saggers, Head of Mobile Advertising for the Vodafone Group, would seem to agree. “We have identified mobile advertising as part of Vodafone’s strategic development strategy,” he says. “It extends our revenues beyond core services.”
It is not as simple as ‘advertising equals revenue’, and several outcomes for the industry exist. Everyone could benefit if consumer satisfaction is prioritised and consumers are rewarded for their time. Everyone could lose if mobile advertising becomes too intrusive and the consumer rejects it as spam. Brand value could be destroyed not only for the advertisers but also for the operators facilitating the campaigns. Making the advertising valuable to the consumer is key.
Consumers’ engagement with mobile advertising can be driven by offering them rewards for their time and effort. As part of its latest report, The Mobile Advertising and Marketing Revolution, and its ongoing coverage of the mobile advertising space, Analysys Research conducted a series of surveys on the Facebook social networking site, using its Facebook Polling service, in August 2007. The polls serve as a small-sample indication only, as Facebook Polling users may represent the views of consumers receptive to technology and new forms of communication, but not necessarily those of an independent population. Figure 1 shows the proportion of respondents who indicated that they were at least somewhat receptive to viewing mobile advertisements in exchange for receiving a particular type of reward, such as cheaper content or services.
Figure 1: Receptivity of survey respondents to receiving mobile advertisements in exchange for various rewards (Source: Analysys Research and Facebook Polling, 2007)
When asked whether they would be prepared to accept advertising on their mobiles (with no mention of their receiving anything in return), 80% of survey respondents said that they were not at all receptive to the idea and only 3% said they were receptive. When the concept of an advertising-based subsidy, or another form of reward, was introduced, respondents’ receptivity to accepting advertising on their mobiles increased – in some cases by a factor of ten.
Advertisements offering tangible off-mobile rewards seem to have appeal. Among survey respondents, 21% were receptive to advertisements being displayed on the idle screen of their phone if the advertisements offered discounts on ‘real world’ items, such as a pizza or entry to a product-launch party not open to the general public.
The Mobile Advertising and Marketing Revolution identifies the value chains involved in mobile advertising, as well as the positions of the various players within it. Using interviews with a select group of key players and surveys of end users, it explains how to implement effective mobile advertising strategies while keeping consumers happy. The report provides advice on how to design a mobile advertising strategy that benefits all concerned, rather than devaluing operators’ and advertisers’ brands.
