The Promise and the Risk of Mobile
Advertising
by Danny Kalish, CTO at Unipier
There is a growing interest in mobile
advertising among mobile operators as a potential new revenue source that does
not originate from their subscribers’ base. The mobile device is potentially the
most effective advertising media ever developed. It is personal, always-on and
enables precise targeting of advertising based on contextual information such as
location, user profile and usage history. Will mobile advertising be another
over-hyped industry segment or can it actually deliver genuine value to the
consumers?
Mobile advertising is one of the few
effective, user-centric advertising media where user experience is a key success
factor that should be maintained across all delivery channels. Operators need to
ensure they develop a viable and sustainable business model that does not
alienate consumers and damage both their own reputation and that of the brands
using the service.
When TV viewers are faced with a poorly
targeted advertisement during their favourite programme it is unlikely that it
will damage their perception of the TV service provider. However, if mobile
users continually receive annoying advertisements on their device they are
likely to place the blame on the operator.
Deciding when and which subscribers
should be exposed to advertising is complex. It depends on many factors, such
as the subscriber’s price plan, usage context, opt-in procedures and
regulations. An agreement needs to be reached between customers and their
service provider to reflect the operator’s obligation to protect users’ privacy
in exchange for the subscribers consent to being exposed to targeted
advertisements. Ensuring customer satisfaction can be a complex process; a
negative experience may reflect badly on the service provider and possibly cause
the consumer to refuse advertising services.
In addition to guaranteeing best user
experience, mobile operators need to make sure advertising becomes a win-win
situation. This can be achieved by selectively choosing which subscribers will
receive advertising and serving them with advertisements that genuinely brings
them value. Operators should offer subscribers full opt-in and opt-out options,
and grant them various financial benefits in exchange for their acceptance to
receive advertisements. After all, the willingness of subscribers to receive ads
on their devices is essential.
Targeting the advertisements to each and
every individual user is important in maintaining a satisfying experience but
there’s more to it than just receiving a suitable advertisement. The
advertisements also need to be adapted to the mobile device and access channel
so it will be clearly presented without damaging the user’s experience and
interests. Providing intuitive advertising services with interactive actions,
such as context-aware ‘click to call’ or ‘click for info’ options, will further
support a positive experience.
If an advertisement is non-intrusive,
delivers value, protects the subscribers’ privacy, stimulates interest and is
relevant to the consumer, there will be a higher propensity for service
adoption.
To achieve this, mobile operators need
to be 100 per cent clear how many “real” customers they have and ensure the
quality of the information held on each user. Names and addresses alone simply
aren’t adequate. Operators need to be well-acquainted with user interests and
preferences to ensure they understand the user in every way possible and can
therefore customise every single interaction. Subscriber profile information
should be collected from all existing sources (e.g. billing, CRM, etc). Building
a dynamic user profile, which is based on the user’s behavioural information,
including content consumption and reaction to past campaigns, will further
ensure that subscribers will be exposed only to relevant advertisements that
offer them real value.
Mobile advertising presents a huge
opportunity for mobile service providers. By leveraging their current assets and
positioning themselves as a key player in the advertising value chain, the
mobile advertising business opportunity can be maximised while substantially
reducing failure risks. To fully exploit its potential for revenue growth,
operators need to realise that user experience and flexibility are the key
success factors. With a high level of personalisation, targeting capabilities
and openness, operators will realise the rich potential of mobile advertising
and ensure its success.
