Mike Baker, CEO of Enpocket, in one of its articles talks about the three possible ways of mobile advertising - SMS, MMS and WAP (http for mobile phones). SMS, which has primarily been popular in Europe and Asia, has recently gained serious momentum in North America. In the last 2 years, total SMS messages sent has increased 4 times from 7 billion to 28 billion per month. Also, unlike MMS and WAP, almost all the phones support the capability to send and receive SMS, making it one of the primary vehicles for advertising.
The idea of advertising via SMS works on the simple push/pull method. Advertisement is pushed to the user and if the user is interested, user pulls the more information possibly making a purchase. MMS also uses the same method, but it delivers a rich media interactive ad to user and has a much stronger impact than SMS, having a much higher click through rate and purchase rate (sometimes as high as 20%). WAP, the third channel, provides richer colors and more interactive experience and further, avoids the need for opt-in or user initiated reply message. However, the click through rate and purchase rate is not significantly different than MMS.
Despite the method, daunting challenges remain the same in all channels: finding the right customer, impressive ads presentation (as the same layout will not look impressive on all phones, colored phones have different resolutions and display size), and deliver the right content which created the spark to view the advertisement in the first place. Mike argues that marketers can't just blast out the advertisements to users without opt-in. Regular media channels are used for promotion leading to user selection, typically asking to send a message to a short code (normally 4-5 digit number). Interested users send the message and advertisement is pushed to the user. If the user remains interested, he clicks through to reply to the message or reach the wap site of the brand- sometimes making a purchase, downloading promotional content, calling the toll free number, opting to participate in further ad campaigns or accessing the brand information at a later time through internet.
Mobile advertising companies like Enpocket are just one part of the whole picture. MMA, in one of its papers, presents the whole picture and calls it mobile marketing ecosystem. According to MMA, the ecosystem is comprised of four interconnecting spheres-Product & Services (brands, content owners and marketing agencies), Applications (discrete application providers and mobile ASPs), Connection (aggregators and wireless operators), and Media and Retail (media properties, “brick ‘n’ mortar” and virtual retail stores). Brands want to advertise, marketing agencies help brands create the ad campaign, applications are created to show these ads, telecom providers to send these ads to the subscribers. Retails are used to create awareness and promote using its traditional channels. The ecosystem coherently works to create the best experience for the end user.
Mobile advertising has clear advantages over all the other channels, the most obvious is that the user is accessible to it all the time, unlike internet, TV or print media and the user can respond to the advertisement instantly and does not need to preserve the spark. Also, since the phone screen is small, typically there is only one advertisement per page, getting the maximum attention of the user.
However, a close look at the case studies presented at Enpocket suggests that mobile advertising still delivers a very very specific goal, unlike other mediums of advertisements. With the limitation of 160 characters and no graphics (SMS), the content and relevance become the only motivating factor for a user to participate. In such a situation, unlike TV, print media or even internet, the advertisement cannot be just pushed to all the users.
But as we will see more people using enhanced handsets and data services, the face of mobile advertising will change and become more like traditional media. While mobile advertising will continue to serve a very specific purpose, the user selection process will become much more flexible and user's opt in will be highly derived by the sites and contents downloaded by the user. This will, to an extent, reduce the role of retail and media that it currently plays to popularize the mobile advertisements and help brands find the right users. But that day is still at least a couple of years away.
Showing posts with label CTIA. Show all posts
Showing posts with label CTIA. Show all posts
Thursday, October 25, 2007
Monday, October 22, 2007
Introduction to Mobile Advertising
It's not that unrealistic a dream I guess - a dream to live in an advertisement free world. Where it somehow dawns upon us from time to time: what services we want and which products to use, but just for that we don't have to go through the undesired ritual of watching ads, which keep showing up one after the other ruthlessly irrespective of the emotional turmoil of the viewer who is flipping through other channels and is cautiously waiting for the show to be back again.
Yet, as the new communication channels and technology around us emerge, new ways are being discovered to push advertisements to consumers in the most disguised manner. Mobile phone is no exception. More than 33% people (more than 2 billion) on this earth are mobile subscribers and the percentage is growing by 15% every year. According to CTIA, 81% of total population in North America are mobile subscribers. No surprise then that a group called Mobile Marketing Association was formed in 2003 to leverage the marketing benefits of this new vehicle which seems to be carrying more and more opportunities and data everyday.
Mobile advertising is still a field in its early stage. It has total estimated mobile ad spending of $ 3 billion in 2007, but is expected to grow to $11.5 billion by 2011, almost four times in the next four years. And the reason behind is simple: as the mobile screens become larger, have better resolution and data speed (3G) improves, there can be a paradigm shift in mobile advertising: from text based ads to display based ads, better user experience because of higher resolution, larger ads because of bigger screens and relevant ads based upon the sites and data accessed by the subscriber.
Mobile advertising industry so far has been a complicated one to get through. Research (and personal experience) suggests that mobile phone is a very personal device. People like it to keep the phone on most of the time. People carry the mobile phone with them almost anywhere they go. Any communication on cell phones receives an immediate attention. Thus, if anything goes wrong with the advertising on mobile phone, telecom subscribers have more to loose than to gain, one of the primary reasons that kept the telecom operators away from advertising for the past few years. But Enpocket, a mobile advertising solutions company, which was recently acquired by Nokia, claims in its in the press articles that mobile advertising, if done correctly, has a much higher response rate (measured as CTR - Click Through Rate) of 2-6%, than that of internet advertising. The challenge, thus, to achieve this success is to understand - how to spark the interest, engage the customer and then, deliver the content and/or right mechanism to access further information right away.
Yet, as the new communication channels and technology around us emerge, new ways are being discovered to push advertisements to consumers in the most disguised manner. Mobile phone is no exception. More than 33% people (more than 2 billion) on this earth are mobile subscribers and the percentage is growing by 15% every year. According to CTIA, 81% of total population in North America are mobile subscribers. No surprise then that a group called Mobile Marketing Association was formed in 2003 to leverage the marketing benefits of this new vehicle which seems to be carrying more and more opportunities and data everyday.
Mobile advertising is still a field in its early stage. It has total estimated mobile ad spending of $ 3 billion in 2007, but is expected to grow to $11.5 billion by 2011, almost four times in the next four years. And the reason behind is simple: as the mobile screens become larger, have better resolution and data speed (3G) improves, there can be a paradigm shift in mobile advertising: from text based ads to display based ads, better user experience because of higher resolution, larger ads because of bigger screens and relevant ads based upon the sites and data accessed by the subscriber.
Mobile advertising industry so far has been a complicated one to get through. Research (and personal experience) suggests that mobile phone is a very personal device. People like it to keep the phone on most of the time. People carry the mobile phone with them almost anywhere they go. Any communication on cell phones receives an immediate attention. Thus, if anything goes wrong with the advertising on mobile phone, telecom subscribers have more to loose than to gain, one of the primary reasons that kept the telecom operators away from advertising for the past few years. But Enpocket, a mobile advertising solutions company, which was recently acquired by Nokia, claims in its in the press articles that mobile advertising, if done correctly, has a much higher response rate (measured as CTR - Click Through Rate) of 2-6%, than that of internet advertising. The challenge, thus, to achieve this success is to understand - how to spark the interest, engage the customer and then, deliver the content and/or right mechanism to access further information right away.
Sunday, October 7, 2007
700 MHz spectrum
With the auction of 700 MHz spectrum less than three months away, the competition is expected to be fierce than ever. The auction will start on January 24, 2008 and the money collected should reach to U.S. Treasury no later than end of June, 2008. The spectrum was previously used by Broadband Analog TV Broadcasters, but now the ownership will be transferred to government by end of 2009.
In a recent interview published on the CTIA Wireless Association website, CTIA's Vice President of Regulatory Affairs Christopher Guttman-McCabe strongly emphasized the importance of additional spectrum to meet the growing demand of wireless communication. Mr. Christopher said that the money collected from this auction, which should be no less than $12 Billion, will be significantly used to reduce the deficit and massive critical upgrade of public safety communications. This money will also be used to generate coupons for users of analog TV for analog to digital transition.
The 700 MHz spectrum has strong broadcast-attractive features, such as the ability to penetrate the walls and to cover a much larger area per dollar invested than other spectrum with higher frequencies. In addition to these benefits, the telecom industry has registered a consistent growth in number of subscribers and total revenue in the last couple of years and needs to address the growing demand. Just for the records, last year, US Wireless Industry (wireless handsets and services) generated $118 billion revenue, which expected to grow to $450 billion in the next 10 years.
Verizon, a strong contender for this spectrum has recently been accused by Google for behind the scene lobbying to change the open access rules, proposed by FCC. Open Access Rules will allow wireless customers to buy handsets or download software different from what's being offered by their specific carrier. Google, which plans to foot its steps in the telecommunication market with this bid, is supportive of open access rules.
In a recent interview published on the CTIA Wireless Association website, CTIA's Vice President of Regulatory Affairs Christopher Guttman-McCabe strongly emphasized the importance of additional spectrum to meet the growing demand of wireless communication. Mr. Christopher said that the money collected from this auction, which should be no less than $12 Billion, will be significantly used to reduce the deficit and massive critical upgrade of public safety communications. This money will also be used to generate coupons for users of analog TV for analog to digital transition.
The 700 MHz spectrum has strong broadcast-attractive features, such as the ability to penetrate the walls and to cover a much larger area per dollar invested than other spectrum with higher frequencies. In addition to these benefits, the telecom industry has registered a consistent growth in number of subscribers and total revenue in the last couple of years and needs to address the growing demand. Just for the records, last year, US Wireless Industry (wireless handsets and services) generated $118 billion revenue, which expected to grow to $450 billion in the next 10 years.
Verizon, a strong contender for this spectrum has recently been accused by Google for behind the scene lobbying to change the open access rules, proposed by FCC. Open Access Rules will allow wireless customers to buy handsets or download software different from what's being offered by their specific carrier. Google, which plans to foot its steps in the telecommunication market with this bid, is supportive of open access rules.
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