O2, EE and Vodafone to create mobile ad network

The three biggest UK mobile operators plan to shake up the way mobile advertising space is bought by offering brands targeting options based on their customers’ data.

Observers have said the move will have a major impact on the strength of what existing ad networks and publishers’ offer to brands.

A document issued by the European Commission for consultation and seen by Marketing Week has revealed the full extent of the joint venture first proposed by Everything Everywhere, O2 and Vodafone’s UK to create a co-branded mobile wallet service last year, which it has emerged also includes the formation of a giant data-driven mobile ad network-type operation.

The mobile operators hope to join forces to create a “one stop shop” to sell mobile ad inventory, not only across their proposed joint m-commerce offering and branded portals, but also across third party publishers’ mobile websites.

The service would potentially be more appealing than that of other mobile ad networks or offerings direct from publishers because the operators could supply demographic targeting based around anonymous profiling of their combined 37 million UK customers.

This could enable a banner ad from H&M in a mobile website to display an ad for menswear for men and women’s clothing for women, for example.

The joint venture also proposes to offer website owners a specialist mobile sales team and account management team to provide regular reports and recommendations for their campaigns.

Although such services are likely to come at a premium. the move would have major implications on existing mobile ad networks such as Yahoo!, Fourth Screen and AdMob, which would have to clamber to offer advertisers similar targeting capabilities.

Industry sources say the proposals are an attempt to “control” the mobile ad market in the UK, by making a “landgrab” of the entire segment.

One insider says “any ad network could be under threat” because of the scale of Everything Everywhere, O2 and Vodafone’s data inventory.

Brand appetite for mobile advertising has soared in the past year. Mobile ad spend jumped 157% in 2011 to surpass £203m, driven by a rise in mobile display advertising, according to the IAB’s annual mobile ad spend study, compiled with PWC.

The European Commission directorate-general for competition will decide in April whether to agree or ask for amendments to the joint venture’s proposals, or whether it needs to extend its investigation into whether the venture would hamper competition in the UK.

Everything Everywhere, O2 and Vodafone’s joint venture (JV) proposals to advertisers and agencies

  • Push SMS : Brands can contact the joint venture partners to send out SMS messages to customers opted in for marketing messages across the three networks.
  • Coupons and vouchers: Brands can place, offers, coupons and loyalty cards within the JV’s mobile wallet and related apps, and have the ability to track redemption.
  • Display advertising (own assets): JV will provide a portfolio of ad space across its assets, which include the joint-branded mobile wallet, mobile internet portals and apps.
  • Display advertising (third party assets): The JV will be able to sell advertising across third party publishers’ mobile websites.

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