Advertisers still struggle to connect with mobile users

Twenty years ago this month the deal was signed to build mobile phone networks based on GSM technology. Since then the success of the mobile as a voice, and later a data, communications device has been spectacular. But as mobile data has increasingly come to mean the mobile internet, one of the most persistent questions is whether the mobile phone will ever be a successful advertising platform.

If your answer to that question is yes, it probably means you’re either a true believer, or you’re relatively new to the market. But for everyone else, mobile advertising has yet to prove its worth.

The mobile phone seems to have been on the verge of becoming a key advertising vehicle since the turn of the decade. Its attractions are obvious; it’s ubiquitous – there are now more phones than people in the UK – and it’s ever-present – people take their phones wherever they go. Among interactive platforms it’s also uniquely personal, and as the technology has developed its ability to deliver location-based services has been repeatedly emphasised.
However, the list of drawbacks is, if anything, even longer. The massive diversity of handsets and operating systems makes porting and optimising any application, such as a promotional game, a nightmare. The screen size is tiny. The operators’ data tariffs have meant that users had to pay for any advertising they saw via the mobile internet. And, as a number of people pointed out when location-based services were first mooted, rather than informing someone by phone that the McDonald’s they were just passing was running a special promotion, it would be easier and cheaper to use a sandwich-board man.

In the past couple of years, however, a number of changes have taken place that might make mobile advertising a reality. Perhaps the most important has been the gradual introduction of flat-rate data tariffs for mobile users. This started with the launch of T-Mobile’s Web ‘n’ Walk offering in October 2005, followed by 3’s X-Series service last autumn. Vodafone relaunched its Vodafone Live! service this summer to include unlimited data bundles, as did Orange with the new version of Orange World, while O2 is expected to introduce similar tariffs soon. The result of this should be that users are much happier to receive ads over their phones.

Another thing that should make them happier is that most potential advertisers have realised that unsolicited messages are at best an annoyance and at worst actively damaging to the brand. The bulk of campaigns these days are opt-in.

The other significant change is the growth in the number of off-portal sites. Just as the early days of the fixed-line internet were dominated by the walled-garden approach, where users were discouraged, and sometimes actively prevented, from looking beyond what the big portals had to offer on their sites, so the mobile operators have up to now been keen to restrict their users’ Web experience. And just as it did online, this approach has proved untenable, although unsuitable handsets and slow connectivity are keeping traffic numbers low.

This will change, however, and a number of companies are positioning themselves to take advantage of the growth. An ecology of agencies and ad networks is developing, and brands such as Coca-Cola, Electronic Arts, HP, Nike, Nissan and Paramount are among the early adopters.

But my concern is this: once again, all that’s happening is that advertising models that have succeeded in other media are being shoe-horned onto mobile. Take the example of the Web; banners and video alike use it as a distribution channel for ads from another medium. It wasn’t until the invention of the search-based pay-per-click model that we had a form of advertising that utilised the unique qualities of the medium. The other approaches work to a greater or lesser extent, but I don’t think it’s a coincidence that search continues to account for the majority of online advertising spend.

Search facilities have, of course, migrated onto our mobile phones. In order to meet the needs of the mobile searcher this facet will have to become a much smarter proposition, but provided it can deliver better targeted results without raising privacy concerns, it should be just as important a part of mobile advertising as it is online.
This is the real importance of the location information that is the mobile’s unique attribute. It’s not that it allows us to blast users with offer details from nearby shops. Even if people opt in to that it’ll wear thin pretty quickly. The key will be to use it to refine the messages that people ask for, producing advertising that is so useful that it becomes a service to be welcomed, rather than an intrusion to be ignored. 

Michael Nutley is editor-in-chief of New Media Age

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