Going mainstream?

The year 2010 has been considered by industry commentators as a turning point for the adoption of mobile advertising services given the business model becoming better understood by brands and network operators alike. Hani Ramzi, Alcatel-Lucent’s executive director of Mobile Advertising for the EMEA identifies the levers required for the successful execution of a mobile advertising engagement

Hani Ramzi is Alcatel-Lucent’s executive director of Mobile Advertising for the EMEA

Various forms of online advertising including search-based, display, and messaging have existed in developed markets for long enough now to even be considered mature in some respects. However transitioning the operation and success of online advertising to a mobile environment has proven to be a much more difficult proposition, with the mobile advertising channel having so far played a bit-part in the overall annual advertising budgets and spends of large brands.

Things may be about to change. US industry advertising, for example, has been forecast at more than US$1.1 billion in 2011. According to eMarketer, much of this dynamic is attributable to the entrance of Google and Apple into the mobile telecom space and the ways both companies have sought to redefine the mobile device and advertising markets.

“Apple and Google have introduced new devices and ad inventory into the marketplace,” said Noah Elkin, eMarketer principal. “In so doing, they have given mobile advertising new legitimacy, reflected in increased spending estimates from most research firms and investment banks.”

Spending projections continue to span a wide range, reflecting mobile’s status as an emerging channel. eMarketer estimated spending in 2010 reached US$743.1 million, up 79 per cent from 2009.

At the end of 2009, Google announced a deal to acquire AdMob, the mobile ad platform that has been especially popular on the iPhone, for US$750 million. AdMob is a mobile advertising marketplace that connects advertisers with mobile publishers. It allows advertisers to create ads, choose landing pages and target their ads with plenty of detail. Ads can be targeted to locations, carriers, phone platforms and phone manufacturers.

Using AdMob, ads can also be targeted to specific sites or one can browse their channel categories including groups such as communities, contextual search, and entertainment. All ads are run on an auction-based pricing system, and according to Alcatel-Lucent’s Ramzi, the resources being invested by Google and others in the mobile advertising space are likely to move the channel to the next level in its development.

“Mobile advertising is awfully complex,” concedes Ramzi. “In many respects the benefits of mobile advertising were initially ‘lost in translation’ so to speak, but now it is becoming a clean, efficient channel,” he adds.

The cooperation between brands and mobile advertising channels is said to be becoming stronger as the complexity of the ecosystem is clarified

At the centre of the mobile advertising proposition is the need for the consumer to be in control of how and if he is advertised to. Using a mobile device is a particularly personal manner in which to communicate with a consumer, and for that reason it is a very powerful tool, which needs to be respected as such.

“The market is polluted by spammers,” Ramzi says. “This can be intrusive and leaves consumers unwilling to entertain any kind of mobile advertising in the future. So this is where raising awareness becomes crucial, as well as the education of mobile as an additional digital channel for brands.”

Several bodies are looking into standardisation issues with respect to mobile advertising, the Mobile Marketing Association being one of them. As the issue of standardisation has proven time-and-again in the telecom arena, the sooner specifications can be ratified, the more interested and comfortable third-parties become in developing products and services in the space.

“The dynamic that has to exist in mobile advertising is to have the risks and the revenues of its use shared,” Ramzi says. “We see a significant move in the market in this respect and what has to be made clear is that mobile advertising is not a side channel for certain brands, but could and should be a significant digital channel.”

Tigo (Ghana) extends mobile advertising management contract

Millicom Ghana (which trades as Tigo) has expanded an existing mobile advertising management contract with Alcatel-Lucent. The service, Tigo Ads, is based on the Alcatel-Lucent Optism mobile marketing solution and enables Tigo’s customers to receive targeted promotions on their mobile phones. Subscribers can share information with Tigo about their preferences and receive interactive text messages containing news, promotions, discounts and exclusive offers from their preferred brands.

During a limited initial launch, more than 40,000 subscribers opted in to Tigo Ads and took advantage of the coupons and other offers from advertisers. Advertising campaigns for local and international brands including Nestle, Nissan and Volkswagen saw response rates ranging from over 18 per cent up to 45 per cent.

Tigo has now opened up its mobile advertising service to all its subscribers.

The Optism solution is fully managed and hosted by Alcatel-Lucent and did not require any capital investment by Tigo.