Wednesday, July 18, 2007

Back to School

ONE OF THE REAL PROBLEMS with the major carriers throughout their content and marketing chains is their sheer scale. When multimillion-subscriber companies are going head to head for market share, it is difficult to focus on your own segments. Branding messages for the tier-1 companies have been hopelessly broad for years (more minutes, better network coverage, free phones), with little effort to target specific groups very effectively, even though a range of age and ethnic demos come at their phones very differently. There is a real need here for content and service companies to cultivate the segments. "At the end of the day, they are mass market providers," says Jim Ryan, newly minted president and CEO of MobileCampus, which targets mobile data and marketing services to college environments. "I was seeing an incremental opportunity to serve more niche markets and target segments." For years, Ryan enjoyed a unique vantage point, since he ran the data strategy at Cingular/AT&T and was a fixture in the fledgling mobile content industry. He left AT&T just as the iPhone was about to launch, and according to reports was involved in making that deal with Apple. But in placing his bets with the small startup we covered last year in this column, Ryan is signaling that it is time for mobile to get targeted, and for the nascent ad model to follow.

Ryan says that the early stages of mobile marketing may be a bit misguided in following the carriers' lead into the mass market mentality. "Most of the existing players are large media companies used to the mass market and mass media advertising. They want large volumes of people. So they talk about millions of users and page impressions."

MobileCampus partners with universities to deliver free messaging services to students who opt in. The SMS system can range campuswide -- from the administration to ticklers and scheduling notes from individual sports teams or clubs. The school and its groups get the service free, with ads and offers from local vendors underwriting the cost.

Ryan believes that ad-supported systems like MobileCampus can change the mobile marketing equation. If you have tightly targeted users and you know their needs and habits well enough, then you don't need to carpet-bomb the platform or the user with ads. He expects students to receive one marketing message a day -- but a message that relates to their immediate environment and their likely needs. "It's about the value of the message, not the volume," he says. "Mass media is about volume -- millions of WAP pages -- and it uses the same model as already exists . Our model is very different. Our approach is 180 degree different."

Charging 20 cents a message, a campaign for a tech vendor like Dell might spend less than $1,000 reaching all of the tech enthusiasts on a large campus. "If we can get 30% to 40% to check it out, that translates into a lot of activity" for a small cost relative to papering the local media with ads, Ryan says. He believes that while MobileCampus is focused on the universities right now, the model is portable to a host of different demographics and niches and that this is a more appropriate way to use mobile. "I think there is a huge opportunity to evolve this market. There will be a real revenue opportunity for the company that leads that charge. To do that, you have to start with specific content."

As with all highly targeted marketing ideas, the challenge is less in the effectiveness of the promotion when it hits its target, but in the scalability. Is it worth it in the end for the sponsor/client to segment the creative, the deals, the partners into all of these niches? Yes, there is a lot of waste in mass media, but there are also efficiencies of scale. We are already a decade into the ad model online, and how many of the targeting methods available are really being used? The technologies and their proposed business and marketing models always seem to be well ahead of the ad industry infrastructure.

Ryan is right. Mobile seems to be the medium that is best positioned to lead the charge into a lot of marketing models that have been more on the periphery of digital media for years. If marketing and media are moving from mass to me, from corralling eyeballs to finding the right customer with the right message, then mobile offers a necessary challenge to the entire chain of production. But to make messages that are highly relevant to these segments, the marketers themselves have to segment their efforts and their infrastructures. How do you address so many possible niches -- and what new processes and structures within organizations are necessary to make a post-mass media world work? These are all questions that fragmented media are raising across the board, not just mobile. Everybody is back in kindergarten now.

Source: MediaPost

Tuesday, July 17, 2007

The State of Mobile Marketing

Our industry is an interesting one; it’s a complex marketplace of intent, monetization, and relative performance. Those in the direct marketing space either have traffic, e.g. via their website or email list or they have the ability to acquire it, e.g. through paid search. Any traffic revolves around users and in what users might have an interest. With search, users generally already express that intent. With email, the users haven’t generally expressed an intent so much as an offer catches their attention. In either event, an offer will capture, match, their intent, and it will focus on finding a way to make money off that expressed or latent intent, i.e. the monetization. Anyone who has traffic, leverages intent and then makes money, understands though that not all ads perform the same. This is where relative performance comes into play. An offer only continues to receive traffic if it can perform equal to or better than the other offers. For example, you don’t see Columbia House DVD among frequently promoted offers, because MP3 players have changed the intent landscape. One of those offers that currently out-competes Columbia, along with a large number of others are ringtones.

We don’t seem to talk about it often, but if you run offers from CPA networks, you know it. Perhaps we don’t talk about it that much because we don’t want to jinx it, as though we know the offers do too well to be true. Maybe we don’t talk about it because we don’t want to admit openly that, yes we run them. Whatever the reason, it does sound a little weird. If you run campaigns for Blockbuster or Netflix, when asked what you run, you can say the brand name or the generic DVD rental services. The same goes for online education or even credit cards. Those who do either of those tend to say so proudly, and perhaps it’s because those listening understand that market and/or implicitly approve of its promotion. The same rules do not really apply for those in the mobile marketing space, especially those in its most well-known incantation, ringtones. When asked what they promote, far too many people seem to say ringtones with a hesitance, as though bracing for some question or rebuke. Whatever the reason and despite the apparent stigma, mobile marketing, even ringtones, will not go away any time soon, not even with more iPhones. Similar to the incentive offers, it not only makes everyone in the chain far too much money, but users have yet to tire as their interest is based on culture not a one-time fad. They will, though struggle, morph, and, similar to incentive offers, adapt. This week, we look at this amazing mobile market and three of its more prominent segments.

The European company Jamster had the first major ringtone hit. Being from Europe, where cell phone usage far outpaced, both in technology and user comfort, Jamster had a natural advantage when it came to promoting to the US market. They had already weathered the learning curve and could apply those learnings here. They came to market with individual ringtones that users could purchase online and send to their phone. They did a great job especially considering that the phones of the time played simplistic tunes (not the true to life sounding ones of today) and that users had little familiarity with adding content to their phones, let alone content that didn’t seem to originate from within the phone. As the market progressed, others saw the potential and began to compete. Instead of offering individual songs, they went down another path, subscription services. In a subscription service, users do not pay a la carte, they pay monthly; as a result, these companies leveraged the same hook, “ringtones,” but could pay more to the marketer as they paid not a percentage of the initial sale but a percentage of the lifetime value. Today’s most prevalent ringtone offers don’t always have names that make sense, among them being Blinko, Thumbplay, Zapsters, Dada Mobile, Ringazaa, Flycell, and Rock Your Tones, but they all run off this basic model. The demographic of today’s online users combined with a) the companies’ paying a large percentage of the users’ lifetime value, along with b) the ease that a monetary transaction can occur, has created a perfect storm for these offers.

Text Services
On first glance, it almost makes sense that ringtones might do well. Users can get a variety of useful content, quicker, easier, and cheaper than they can if they try to do so through the phone menu. Text services, though, you might not expect to do as well, even though every handset can receive them. Yet, if you know the folks at Mobile Messenger, you find out that text can perform as well if not better. In fact, Mobile Messenger doesn’t do ringtones, they do but it’s far from their strength; they don’t really do text either. What they do is transfer the risk and the reward to the marketer. It took me a while to understand their role, but they basically have many of the same components as a Blinko or Dada. They have content and the ability to bill consumers. What they don’t do, though, is necessarily create an offer then take the payment risk by offering a flat CPA. Instead, Mobile Messenger, allows the marketer to come up with an offer (or run an existing concept), create the page, have full control, and act as the silent partner - doing billing and passing the lion’s share of the revenue to the marketer. It has pros and cons. The marketer must front the cash for expenditures, but they receive the full lifetime value of that customer not some percentage. It won’t work for everyone, but in a world where a top ringtone affiliate will do low four-figures per day, a top affiliate in this arena can do triple or more. This market, too, will undergo change, but it shows a different side to mobile marketing, one that has allowed a company to become the largest mobile marketing firm that few know.

Outside the Box
Perhaps the most exciting use of mobile and one that has existed in other countries for years comes in the form of mobile as a billing mechanism. Ringtones and text do use mobile as a billing mechanism, but they do so for content that comes to the phone. Soon, we’ll see billing as means for paying for items that typically require credit cards. Think of all the free trial offers, from dating to software to health programs, that today need a credit card. As mobile progresses, we will see these offers soon allowing users to bill it to their phone, or promoting a secondary, smaller test trial for the phone if the credit card option does not happen. The phone won’t solve everything, as phone companies will not feel good about users adding potentially a hundred or more dollars in non-mobile services to their phone bill, but it still hints at the future. If the subscription ringtone service does decrease, the way CD sales have, at least mobile as a whole will not go away. It will only thrive, and we should all look forward to this and other outside the box / outside the handset applications as it will increase our revenues.

Source: Adotas

Monday, July 16, 2007

Google Opens AdSense for Mobile Beta

Following the roll-out of a revamped mobile search earlier this year, Google has begun testing a version of AdSense for mobile Web sites. In typical Google fashion, it ushered in the beta program not with an announcement, but by sending invites to AdSense users late last week.

Internet entrepreneur Scott Jones posted on his blog, Self Made Minds, that he received an invite to the Google beta. The news garnered attention throughout the blogosphere and SEO community.

A Google spokesperson confirmed the beta. "Google is committed to finding new and better ways to get users the information they need while on the go, and to opening up new revenue opportunities for our partners. We are currently conducting a limited beta to test AdSense for mobile, a monetization product for mobile publishers. We will continue to evaluate the beta and will refine the product based on feedback from our users, publishers, and advertisers."

"At present it just appears in my AdSense in the list of products and has not been tested," Jones told ClickZ News. He went on to say ad units include single and double ads, WAP 1.0 or 2.0 in the normal color palette for integration.

While positive about the move, industry analysts question the size of the market for contextually delivered mobile ads. "How big is mobile advertising at this time, and how much is Google coming into the space going to impact positively or negatively?" asked M:Metrics's vice president consulting and senior analyst Evan Neufeld.

Google's mobile AdSense limited beta may bring mobile one step closer to becoming a line item in advertisers' budgets, rather than an experimental entry.

"Google's AdSense is a very powerful product online, but it fits a particular niche for advertising. I don't think that niche is currently filled in mobile, but I don't know how big that niche is," said Lee Hancock, founder and CEO of go2 Wireless, pointing to Google's offering of standardized ads, contextually-based units, PPC and impression-based models.

"If you look at the way AdSense works online, typically associated with content that is relevant, it's typically displayed in extra areas on the page," Hancock said. "You're not going to have that flexibility and capability on the mobile phone, with its small screen."

Skepticism aside, Hancock said "Google will likely be successful; the question is the magnitude of that success."

The appearance of ads through AdSense has at least one potential benefit to the user experience. "It will probably assist in the discovery of information on a mobile phone," said Hancock. "But what will be really interesting to see is how monetizible mobile traffic is."

AdSense's inventory is one component of the mobile marketing platform, cautions Neufeld. "Is it strictly a banner ad-serving tool?" he said. If it ignores SMS and MMS messaging, he added, Google is "missing a big piece of it."

Source: ClickZ