The news that former Nokia president Pekka Ala-Pietila is launching a mobile phone service that offers free calls and texts to users willing to view ads through their handsets has reignited the debate about advertising on mobiles.
Some believe that with heavyweight global brands such as Coca-Cola already committed, Ala-Pietila’s Blyk will be the service that finally demonstrates the potential of the mobile phone as an advertising medium. But others claim that the highly personal nature of the device means people do not want to receive ads of any kind on their phones, regardless of the incentives.
Blyk launches in the UK this summer and this week announced advertising deals with the likes of Coca-Cola, L’Oréal and Buena Vista. The mobile virtual network operator (MVNO), which says it can help brands communicate with the notoriously difficult to reach market of 16to 24-year-olds, is understood to be close to signing a deal with Orange to run the service over its network.
Mobile revolution is here
Blyk co-founder Antti Ohrling said on his blog recently: “For decades marketers have been dreaming of a medium that has distribution effect of broadcast, targeting capabilities of direct marketing and interactivity with the internet. And now it’s here.”
People signing up to the Blyk service will be asked to give details of their likes and dislikes. Although there is no billing relationship with the customer, there will be regular interaction through questionnaires and other response mechanisms.
Founder of mobile marketing agency Response Mobile, Paul Berney, points out that the free-rewards-in-return-for-advertising model has not worked on any medium in the past. He says/ “People might be willing to try it out but I wonder how it will work as a long-term model. I think people find unsolicited advertising quite irritating on a mobile. It seems to work better when the customer has requested it or at least instigated interaction with a brand. I’m not sure this will be any different from junk mail.”
Ala-Pietila admits that relevance is key. “The golden rule is that the ads will not interfere with the user experience,” he says. “It is a very important point that we have looked at carefully, and all the ads are developed so that they are not intrusive. We know our customers well and can provide advertisers with personal profiles to help them build targeted campaigns. They will only get messages they are interested in.”
Orange has been running ads on its Orange World portal since September last year and says early indications are that consumers are willing to interact with brands through their phones. In a survey of a thousand users, Orange found that up to 23% had purchased or were more likely to purchase the product advertised. More than half said they would be happy to see more advertising on their phones, while just 6% said they disliked advertising on mobile phones. Operator 3 also announced recently that it would show ads on its portal in return for free content.
Five-year ad hike
A report from Informa Telecoms & Media at the end of last year suggested advertising is an area the operators can no longer ignore. The report said advertising on mobile phones will be worth more than £6bn a year within five years (MW September 14, 2006). It added that consumers would be persuaded to accept ads on their mobiles with the offer of free content such as TV channels, games and music.
Ovum principal analyst Eden Zoller says: “Revenues from traditional voice services are declining so advertising is becoming more important. Services such as music are not growing quickly enough to make up for declining voice revenues. One of the attractive things about mobile advertising is the greater targeting. It should be more realistic to achieve proper targeting in the mobile environment. Done properly, advertising on phones can work.” It is a message the industry has wearied of hearing over the years. But with heavy hitters like Ala-Pietila and some of the world’s biggest brands on board, mobile advertising could finally be coming of age.