Mobile advertising evolving: user-distributed ads, user-created ads, user-priced ads

I wrote about mobile advertising two weeks ago saying it needs to be permission-based, and then even better than that. We've had a lot of discussions with many here, off-line, and on various discussion forums such as Forum Oxford. I want to continue the dialogue.

So first - to be clear, there is a rapidly growing industry in mobile advertising. It more than doubled from 2006 and reached 2.2 Billion dollars in global revenues in 2007 (according to Informa, Nov 2007). The mobile advertising and mobile marketing industry had been on the slow burner since the first mobile ads went online in Finland in 2000 (ad-sponsored news headlines for free on SMS) but the last few years has seen a lot of growth and innovation in this space. Admob just celebrated its 20 Billionth mobile ad served, and Admob only started two years ago in 2006; their current monthly deliveries are over 2 Billion mobile ads. In many countries the majority of the mobile phone subscriber base already receives ads on mobile, to the degree of 75% in Spain, 64% in France and 54% in Japan. As mobile is the widest-reaching media platform - by a wide margin with its gap growing ever wider - At 3.4 Billion mobile phone subscriptions at the end of 2007, there are 2.5 times more mobile phone subscriptions than internet users; twice as many mobile phones than TV sets around the world.

But the early mobile ads are copies and adaptations of existing ad models from older mass media. WAP banner ads are a direct adaptation of web banner ads, themselves a copy of magazine and newspaper print ads; similarly spam SMS text messaging ads are an adaptation of spam email ads, which grew out of junk mail. The vast majority of all mobile advertising around the world is banner ads and spam SMS.

We can do better. Far better. I talked about the principles, starting from permission, and going for the high ground - making mobile ads desirable, sufficiently contageous, etc. Now lets look a bit at who is doing it and how.

Mobile - as our regular readers know - is not the dumb crippled little brother of the internet; as a mass media mobile is far stronger and more capable; being able to replicate all that each of the six legacy media can do, mobile as the 7th Mass Media, actually has six unique benefits, none of the older media - including the internet - can do. Quickly reminding - mobile is 1) the only personal mass media; 2) is permanently carried; 3) is always on; 4) has a built-in payment mechanism; 5) is available at the point of inspiration (for user-generated content and citizen journalism etc); and 6) mobile has by far the most accurate audience measurement and data. Building on these, we can revolutionize advertising.

So lets look at some examples. First the most obvious - viral. We have two powerful viral marketing channels, the internet and mobile. There are tons of successful, award-winning viral campaigns on the web, but precious few on mobile as of yet. And most of the mobile viral campaigns have been by mobile operators themselves. So what is possible. I think a perfect example is Audi Japan's campaign to ask the Audi guru online questions, sent via and responded to mobile. In principle this is a variant on AQA, Any Question Answered - ie Audi fans can write to this site and pose questions. The Audi guru is an avatar (digital puppet) and fans can go see him on the Audi website responding to questions. The Audi guru is seen to be reading messages as they come in, pondering how to respond, showing faces - such as an upset face if an Audi fan sends a question about some other brand of car - etc. Its very much fun, and has a strong viral element. As fans send questions, they want their friends to see the Audi guru ponder and respond. The beauty here is that we can do this interactively across multiple media platforms. If you want to read more about the Japan Audi campaign, go to Akihito Abe's article at the iMedia Asia site. But my point, if the ad campaign is successfully viral, it is "sufficiently contageous" obviously; and equally important, it is perceived as of value by the initial target audience. Why else would they forward it.

So its clear that we can do user-distributed advertising on mobile. Lets go further. How about user-created advertising and marketing. Here we have the best example being Blyk of the UK, Alan and I write a lot about Blyk - Alan serves on their Board - so I won't bother repeating that story, but its quite clear, Blyk users become actively involved in tailoring and refining their advertising with their preferred brands. Oh, and as a plug - remember if you want to see Blyk, Alan Moore and me, speaking at the same place and event, come over to the Forum Oxford conference in Oxford this April 18. Its a Friday very well spent with many of the best thought-leaders in mobile (and as an University sponsored conference, its dirt-cheap too..)

So yes, user-generated advertising. If its created by users, it will be liked by users (as Alan likes to say, we embrace what we create). And bear in mind, user-generated advertising is nothing new per se, we have had for example user profiles on dating services (user-generated ads) and personal ads and most classified ads have been user-generated ads on newspapers for decades. As such its nothing new. Only that on mobile we can go far beyond the simple text of a classified newspaper ad.

But then, how about user-priced ads. Ha-ha, this came up with a discussion over at Forum Oxford with Mark Curtis of Flirtomatic. I was reminded that the First Face feature of Flirtomatic - at the dating/flirting site opening page there is always one Flirtomatic user's face featured. That is now offered to the user base to bid on, by auction. If you want more women or men to start flirting with you right now, why not bid for being the First Face for a few hours. This is a variant obviously of Google Adwords (auction based placement of sponsored links near the search results). Same idea, who wants it the most, pays the most. Gets to be First Face for a few hours. How much is this kind of personal publicity worth? Flirtomatic's First Face in September 2007 was worth 8 UKP for six hours (12 Euros, 16 USD). And its of course on each of the interest needs - a First Face for men seeking women; another for women seeking men, another for men seeking men, etc..

And this is all on the principles of basic advertising on mobile. When we look at mobile marketing, it grows far greater. Just on Flirtomatic again, sponsored gifts - the L'Oreal sponsored Big Wet Kiss for example. Or how about customer relationship management. We've talked about mobile check-in by airlines, and the airline delay announcements via SMS; there now are intelligent medicine bottles such as SIMpill from South Africa and Medixine from Finland who will use messaging to alert the nurse or relative if the person forgot to take their medicine, etc. The SMS based taxi reservation that is such a hit in Finland - the taxi service gives very precise response data on which taxi and when they will be there to pick you up, and the taxi providers report that SMS based taxi ordering public is much more reliably also there waiting for the taxi, than those who place taxi orders via voice calls. And both Alan and I are big fans of the "just-in-time Dentist" service that allows cancelled appointments to be refilled on first-come, first-served basis via SMS re-booking.

When we look at sponsorships and customer relationship management, mobile is by far the most powerful tool - again because it is in the pocket of every economically viable person on the planet. Every time we drive a car, we have our phone with us - and it is turned on, and connected (except where cellular network coverage fails us, ha-ha). Every time we sit and watch TV, our phone is within arm's reach - not our PC; and the phone is on and connected (even if the PC is there, it might well be turned off and not connected to our broadband). Even when we go to sleep, the last item we look at is our phone; and the first thing to wake us in the morning, is no longer the clock radio, it is increasingly the mobile phone - 72% of the world's population uses a mobile phone for wake up as the Nokia survey told us two years ago.

And mobile is the media of choice for the youth, for Generation C (Community Generation). TV (and newspapers and magazines) is for talking to retired people; the internet is to talking with middle aged people; but mobile is the media channel to reach young people. It is the newest mass media, but it is also the least understood. And for those who are "stuck" doing new marketing on new media using old marketing methods and old marketing lessons, it is too easy to just copy banner ads and spam.

This is what we can do on mobile. We can go far beyond the WAP banner ad and the SMS spam text messaging based primitive mobile advertising. We can make them desirable, viral, user-generated, even user-priced. And we can engage with our customers. Engagement Marketing. This is the new paradigm, and mobile will be leading the way into that future.

For anyone who is interested in learning more about mobile advertising, I've released my latest Thought Piece (its like a short intense White Paper of only 2 pages in length) about mobile advertising and yes, its also free. So I'll be happy to send it to you, if you write an email to me at  tomi at tomiahonen dot com.

UPDATE: I have written a follow up piece contrasting digital identity, with digital footprint, and social context

Comments

[Tommi Holmgren]

Thanks again Tomi for a really thoughtful post!

I've been thinking about the six unique benefits of mobile since I heard you speaking at Divia in Helsinki. I think they are really good starting point for discussions on how companies can embrace the mobile.

Have you actually thought on extending the benefit nr. 5? In my experience it's not only about being available at the point of inspiration, but also being present when there's idle time e.g. in the train and similiar occasions. I think there's tremendous opportunities for companies in those moments.

[Alan Moore]

The one bit missing form this Tomi is Social Marketing Intelligence - and the ability to truly and deeply understand your audience and community. In this way we are able to discover monetary value otherwise hidden.

Mobile via CDR's provides the most richest of data available couple that with other forms of dataflows and one is looking at something truly valuable.

In taking a life enabling - service approach to commercial communications we can make what as seen universally as interruptive communications into something that has an inherent value - what you describe as being sufficiently contagious.

Alan

ps. How cool is the Audi idea and why would that not work in conjunction with the Audi channel in the UK?

[Tomi Ahonen]

Hi Tommi and Alan

Tommi - good point. Yes, I have thought about it quite a lot ("Moment" is one of the attributes of successful mobile service I discuss in my mobile service creation theory, the Six M's (originally Five M's) developed together with Joe Barrett of Nokia and Paul Golding of Motorola and now mentioned in a dozen or so books already. So yes, the ability to make better use of our time, whether catching up on lost time (yesterday's ice hockey scores) or postponing time (I'll deal with this tomorrow) or multitasking, or alerts and sudden news; the moment attribute is particularly useful also in helping us "kill time" ie 5 minutes before the bus arrives, etc.

But I think while its a valuable attribute, this is not unique to mobile. We can also use a Playstation Portable to help kill time; or an iPod, etc. So while yes, mobile can do "more" in the Moment attribute than a PSP or iPod, it is not a benefit that is unique to mobile. Contrast that to the "Available at the Point of Inspiration" - if we have in our pocket an iPod, a PSP and a mobile phone, and we see David Beckham walking on the street and want to snap a picture - the PSP and iPod are useless, only the mobile phone (ie cameraphone) can be useful for us to capture the moment - (and to complete the example, still differing from stand-alone digital cameras - only the mobile phone is always connected so we can also upload the picture immediately, rather than carrying the digital camera back home and uploading the image via our home PC, perhaps hours, even days later)

So Tommi, good point, but I think its an added benefit, and useful and powerful, but not unique to mobile.

Alan - good point. I've somehow from a "technical" point of view, thought of the social context of the user data as being part of the 6th benefit (best customer info) but you are right. It is a separate unique benefit. On TV or radio or print or the internet, we don't know the social context of that consumption. On mobile we for the first time can capture that.

For those reading this response who arent' very fluent with Alan's and my thinking - here is the simple exammple. I am a fan of James Bond. So lets say the new upcoming James Bond movie (Quantum of Solace) to be released November 2008, launches a mobile marketing campaign, with a small 007 game as part of it. So I might find that mobile game on my phone, for example on the Vodafone portal. And I could download the game all by myself and play it and that could be it. If so, that would be similar to any gaming experience I might have on the internet.

But consider this. What if I really liked it. And I know Alan is also a Bond fan, as is his son Joseph (in fact their whole family are nuts about Bond, ha-ha). So, lets say I download the game, and I play it, and I love it. But the game does not have a forwarding link (for some strange reason, the game developers didn't think of it). But I like it, and I send an SMS text message immediately to several of my friends who are also 007 fans in the UK - such as Alan. And momentarily after receiving that SMS, Alan downloads the same game. Soon thereafter, Joseph downloads the game, etc.

Only on mobile networks, can we detect the social context of our consumption experience. It is "Web 2.0 vs web 1.0" kind of a total change. Consider the credit card or loyalty card. We can gather very well customer behaviour data on a loyalty card (like Tesco in the UK) or a credit card. But there is no way to capture the social context of that purchase - who was with me at the time, who did I give the gift to, etc.

But on mobile we can. We can for example track the location of every phone. So if I make a payment on the phone at a coca cola vending machine, and buy two cokes, and within my proximity at the time is another phone number, with which I regularly send text messages and make phone calls, we can very well deduct that Tomi probably gave the second coke to his friend, whose phone number is 0123456789..

The social context of our behaviour.

Now, its easy to say, yes, we can also do that online. But we can't. The online identity and digital footprints are so muddled (multiple accounts, firewalls, multiple users of single PCs such as family PCs, removed and blocked cookies, anonymous accounts, etc) that while it was theoretically possible to try something like this on the web, in practise it is impossible today.

But on mobile all that data is automatically collected. We know exactly who you are communicating with, at all times (by who, I mean we know the phone number, it may be listed as Donald Duck on a prepaid account). So again another example. The annual ice hockey world championships - if you monitor my phone behaviour during the world hockey championships, I send dozens upon dozens of SMS text messages during the games that Finland plays. So even though I live in Hong Kong and have a Hong Kong and UK mobile phone account, it would be rather easy to guess, that this guy must be a fan of Finland ice hockey.

And then the social context - those people who share in those text messages during those games - are certainly ice hockey fans, and if their messaging pattern holds for Finnish games, those are likely Finnish fans. But the messages that only peaked during the Canada-Finland game, are likely Canadian fans or random ice hockey fans...

The social context. A black science. But it will expand the customer insights far beyond the "1.0" kind of thinking today - what Tomi Ahonen consumes on his phone today - to the social context "2.0" thinking, who is involved when Tomi is consuming that content...

Good point Alan. I hadn't thought of it that way. I do think you're onto something again (ha-ha, what else is new). I think we need to add the 7th unique benefit to the 7th Mass Media, eh? Now I need to write it out, probably with a 007 example, ha-ha...

Yeah, not only the most accurate info on the audience, but for the first time we capture the social context of the media consumption.

Thanks for writing

Tomi Ahonen :-)

[David Cushman]

One thing to throw into the mix: advertising selected as content by the creators of UGC, as seen on Itsmy.com
I've written about this here:
http://fasterfuture.blogspot.com/2008/04/testing-mippins-update.html
cheers dc

[Tommi Holmgren]

Thanks Tomi for your reply. Very good point that during your idle time you can use many other devices than just the mobile and thus it's not unique. I fully buy into this!

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