Mobile advertising still at tryout stage

28 Dec, 2007

In the weeks leading to Christmas, an online wine retailer gave 15 percent discounts to anyone who sent in a photo of its newspaper ad snapped with a camera phone.
SnapTell Inc., the company helping Wine Enthusiast and other merchants offer such services, uses image-recognition software to determine what offer, video clip or other content to return to the phone. In the coming months, the same technology could deliver movie reviews and discounts to anyone snapping a picture of a movie poster or billboard.
It's one of a number of emerging approaches to mobile advertising, an industry still in its infancy but showing promise. More than 80 percent of Americans now own cell phones — a statistic Jupiter Research analyst Neil Strother equated with "carrying a potential advertising channel in their pocket."
Fast-food chains, carmakers and TV reality shows have run contests and other promotions in which consumers participate by sending text messages. Wireless carriers have begun letting companies run banner ads — mini-versions of what you might see on a PC. Google Inc. and Yahoo Inc. have brought lucrative search ads to phones.
Advertisers have been spending a little money here, a little there trying to gauge what works on mobile phones. The efforts so far are best described as trials and pilots, lacking in comprehensive strategy.
"It's the Wild, Wild West right now," said Rick Sizemore, chief strategy officer for the tech consultancy Multimedia Intelligence. "This is an interesting and compelling vehicle, but they don't necessarily know who to work with. There are so many options out there — a lot of hype with no substance, and then a couple of gems."
SnapTell is among Sizemore's favorites.
Gautam Bhargava, SnapTell's co-founder and chief executive, said the company considered the phone's unique qualities — its lack of regular keyboards in most cases, and the ubiquity of built-in cameras. Rather than require someone to punch in a brand name using a clunky keypad, the company decided to accept picture messages.
"We wanted to make it simple for the end user," Bhargava said. "There's nothing to install on your phone. You don't need to pre-register. We do not have to worry about whether you are with Carrier A, B or C."
Another of Sizemore's favorites is Single Touch Interactive Inc., which plans to unveil in February a program that lets customers activate electronic coupons at drug stores and other retail chains simply by dialing the pound sign on the phone followed by "SAVE." Discounts are automatically applied at the register.
"I don't want to increase the line and have customers be frustrated because someone's fumbling trying to find a coupon" in a text message, said Anthony Macaluso, Single Touch's chief executive. "What we need to do today is not change the behavior of the retail point of sale or the behavior of the customer."
There are still a number of hurdles before mobile advertising can truly take off.
Advertisers now have a good idea what a typical desktop computer can do. Handsets, however, vary in screen size and features — even the same model can be configured differently depending on a customer's carrier.
And there are also big differences among users: Some people use phones only for calling, some have dabbled with text messaging and others are comfortable surfing the mobile Web and watching video.
"In mobile you can't assume anything," said Derek Handley, chief executive of The Hyperfactory, a mobile ad company. "You need to build programs and campaigns around this fact."
In addition, many users pay for services by the minute, message or kilobyte. Seven ads via text messaging could hike a phone bill by a dollar.
The uncertainty has led to some experimentation in business models, as some wireless carriers and ad companies bet that consumers will embrace ads for free minutes or ring tones.
Virgin Mobile USA LLC, which offers prepaid mobile services, said more than 10 percent of its 5 million customers have signed up for Sugar Mama, a program that lets customers earn up to 75 minutes of free airtime each month simply by watching ads or responding to mobile surveys. PepsiCo Inc., the U.S. Navy and Nintendo Co. have been among the brands participating.
Expect the experimentation to continue in the new year and beyond.
"That's how a new market is being created," said Dan Olschwang, chief executive of JumpTap Inc., an ad-technology company. "People adopt all kinds of stuff they know from other medium and gradually the industry learns how to utilize the best in this new medium that's called the mobile phone."

Japan and South Korea leading in mobile advertising, says ABI Research

17 Dec, 2007

By 2012, the total value of all mobile advertising and marketing in Japan and South Korea will reach US$1.2 billion and US$684 million, respectively, according to ABI Research. With closely-targeted marketing using demographic data from existing mobile subscribers, mobile ads over phones are effective in reaching consumers who are open to receiving commercial messages, noted the research firm.
Senior analyst Andy Bae of ABI Research says, "Japan and South Korea have almost the same market structures, value chains, and service applications. This is because mobile operators in both countries established their own mobile ad agencies to support operators' business models for mobile ads. The relationships between operators and the affiliated mobile ads firms are close, in order to produce desirable business results."
One of key reasons for mobile advertising's market growth is the well-established range of 3G and HSDPA-based handsets available in both regions. Consumers in Japan and South Korea are well accustomed to accepting rich content advertising messages.
Compared with other regions, these markets are entering a new, advanced phase. SMS-based mobile ads are still mainstream, but consumers here are quite ready to accept rich format advertising that utilizes multimedia capabilities. More important, consumers sometimes regard SMS advertising as spam, so that some consumer-related companies are changing their advertising vehicle to MMS (multimedia messaging service), instead of text-based SMS.
Bae concludes, "Mobile search and gaming will be promising sectors for the next growth phase in these regions. Mobile operators believe that search results with location-based advertising messages could generate large revenue streams with gradually increasing usage by subscribers. Google and Yahoo are already implementing their business activities in the regions by cooperating with mobile operators in Asia."

Yahoo! lays groundwork for mobile advertising in Asia

14 Nov, 2007

After tying up with six mobile operators in significant markets across Asia since June, Yahoo! announced expanded distribution of its Yahoo! oneSearch product to nine more Asian mobile operators. They are Aircel, BPL Mobile, BSNL (India), DiGi Telecommunications (Malaysia), PT EX- CELCOMINDO, Pt Hutchison CP Telecom, PT Indosat (Indonesia), PCCW Mobile HK (Hong Kong) and Starhub (Singapore).
The oneSearch product was designed to take into account that a mobile user’s mindset on mobile device is different from when on a desktop PC and that besides device constraints, users are usually unaware of the content and apps available to them. Also, “the only thing that matters in mobile search is relevance,” said Ojas Rege, VP for global mobile products, Connected Life. “Telcos in this area have potential to take new models of discovery like oneSearch and bring them to users,” Rege added, stating that Yahoo!'s current strategic distribution which is very “operator-centric.” Yahoo! oneSearch is also a key driver for Yahoo!'s mobile advertising which Rege says is still in its infancy stage. Having introduced the capability for advertisers to buy display advertising since the start of the year, Yahoo! will be expanding to enable sponsored listings; currently available only in the UK, US and Japan; in more countries in Asia. Rege added, “Next year, one of the big areas for product development will be new models for advertising” and also that 2008 will be the catalyst year for mobile advertising. Yahoo! also announced in Macau the availability of Yahoo!Go2.0 in Chinese language for the Taiwan market.

Nokia Buys Mobile Advertising Provider, Enpocket

17 Sept, 2007

Nokia has announced that it is buying the mobile advertising group, Enpocket for an undisclosed amount. The Enpocket platform is a mobile advertising campaign management and delivery system distinguished by advanced consumer insight, targeting, and measurement. The platform can deliver mobile advertising across multiple formats including SMS, MMS, mobile Internet advertising, and video.
"Nokia has already announced its intention to be a leading company in consumer Internet services and we believe that mobile advertising will be an important element in monetizing those services for our customers and partners. Enpocket's mature leading edge platform and people expertise are a strong fit with Nokia existing capabilities in the mobile advertising market," said Tero Ojanperä, Chief Technology Officer, Nokia. "This acquisition is a game changing move to bring the reach and depth of Nokia to organize the market across the world, and make it easier for an ecosystem to develop."
Enpocket is a privately-owned company, established in 2001 and headquartered in Boston, USA. The company employs about 120 staff.
The agreement is subject to customary closing conditions and is expected to close in the fourth quarter of 2007.