Ad industry eyes phone advances
Thanks to advances in mobile technology, marketers are looking to the mobile Web for new audiences. But it is consumers who will dictate the pace and scale of innovation. By Catherine Turner
Despite years of dramatic predictions marred by false starts, mobile is fast becoming a channel that brands are looking to reach consumers through. Its very position as a “personal” device, always on and always available, as well as evolving technology and big launches from the likes of Google and Apple with its iPhone, handset manufacturers and mobile operators make it an attractive playground for brands and consumers alike.
Increasingly too, phones are about more than phone calls and operators are keen to offer services, such as data downloads and WiFi internet, that they can monetise. It’s also a great way of reaching that fabled hard-to-reach young audience. On-the-hoof services, such as search, are evolving, while a population which discovered social networking sites such as Facebook, MySpace and Bebo in their masses last year, are now looking to carry those digital conversations beyond the home and the office desk.
Mobile media measurement company M:Metrics reports that young males in particular are a rich target for mobile advertisers, as among mobile phone users 36% of 18- to 34-yearolds accessed mobile media in February. Men in this age group are also highly receptive to SMS advertising, with 9% responding to an SMS ad they received, versus a 4% market average. In Western Europe, a quarter of all male mobile phone users accessed mobile media, compared to just under 19% of women. This audience is also quite young, with 28% of 13- to 17-year-olds consuming mobile media.
Senior analyst Paul Goode says: “Reaching the 18- to 34-year-old age demographic is a real challenge for advertisers, as this group is spending less time consuming print and broadcast media.” He says that young consumers in the UK are redirecting that attention to mobile.
Interestingly, US mobile users are more active consumers of mobile media. Unlike Europeans, they use SMS less frequently for news and information retrieval and are more likely to have data plans, which has a direct impact on mobile content consumption. In Europe, the UK has the highest percentage of mobile media users, at 26.8%, while Germany and France lag behind, at 18.4% and 18.5% respectively.
Goode says: “Since the early days of mobile advertising, SMS advertising has been an effective way to reach the masses, but advertisers are now actively looking at the mobile Web to access new audiences.”
Perhaps so, but as Universal McCann digital account director Sarah Doughty warns: “The most important thing a brand must do within the mobile space is to add some kind of value to a user’s experience.”
One operator, Blyk, aims to do that by offering its 16- to 24-year-old subscribers – who are all “invited” rather than signing up – free text and phone calls in return for receiving a number of commercial messages. More than 40 brands, including Coca-Cola, Sky and L’Oréal have so far signed up, although some critics suggest its model is too niche to become a success.
Doughty suggests that proximity marketing is great for retail brands where they can offer users a discount or offer when they are close to a store. “Users may find this intrusive, but you can minimise this by reaching users when they are in the immediate vicinity of the store front,” she adds.
Mobile search comes with the same benefits as standard search but the way it is displayed and used is different to the internet. “While the functionality is the same, there is limited space in terms of text and the number of results that are displayed,” continues Doughty. “Google, Yahoo! and the mobile operators are already offering mobile-specific search advertising, but as the take-up of devices such as the iPhone increases, it alleviates the need for a mobile search platform. I think we are still a long way away from this.”
Geographical search is perfect for the mobile platform, however not all search services are able to tell advertisers the exact location of an individual without them entering the location themselves. The map service on Orange Local is one example of how geographical search can be used at its best and is a perfect platform for clothes shops and restaurants.
Increased penetration
Carlson head of digital Jed Murphy agrees that mobile internet growth is being driven by a desire by brands and operators to exploit the channel. He suggests that internet access is finally becoming a usable feature of mobile handsets via increased penetration of 3G and WiFi, while data charges are becoming more transparent and bundled to consumers. Therefore consumers are more willing to browse and explore on their handsets, he says.
Murphy says that understanding how consumers use the mobile channel is critical to successful operation and interaction in the space.
He points to search, showing that mobile search works in a different consumer “mode”. “Internet search can be a more casual approach to browsing or information seeking in home and work modes,” says Murphy. “Mobile search is about obtaining information such as train times or football scores quickly and efficiently.”
Doughty agrees: “Users generally do not just surf the internet on their mobiles; they have a predefined objective like finding out the latest sports results or an address,” says Doughty. “The incentive must be particularly big for users to respond to an ad since the cost is still very much a barrier for users.”
Search giant Google is among those that understands just how important mobile might be – and the huge revenue potential of the “first screen”, so-called because there are infinitely more mobiles than there are PCs or TVs. Estimates put 2.5 billion globally, compared with only 1.5 billion TVs and 820 million PCs.
Last year it unveiled Android, a free opensource mobile software, backed by an “Open Handset Alliance” of more than 30 partners including eBay, Sprint and T-Mobile. But there is still some way to go. Google may claim it owns just over half of all mobile searches, but as yet the total UK market is still less than 10 million mobile internet subscribers.
Perhaps the most exciting area for brands, though, is the upsurge of social networking sites launching on mobile – whether established players such as MySpace, Bebo and YouTube – which comes preloaded as an icon on the Apple iPhone, along with search engine Google – or mobile only upstarts such as the Amsterdam-based GyPSii.
Multimedia sharing
Market research company Informa Telecoms said earlier this year that around 50 million people, or 2.3% of all mobile users, already use the mobile phone for social networking, from chat services to multimedia sharing. It forecasts that the penetration rate would spiral to at least 12.5% in five years.
But, as Manning Gottlieb OMD head of media futures Jean-Paul Edwards says: “It’s still early days in terms of social networking. We’re seeing strong growth from a low base of sites such as Facebook. In the last year we have seen a number of exclusive deals with the networks, such as Bebo and Orange. That’s now opening up. There is a consumer demand for it.”
He says a good use of mobile as an engine for social media happens around events. For example, creating a social media site for festivals where people gather and are able to meet with friends or download running times are increasingly used to interact with brands.
But Edwards strikes a note of caution to brands investing in this space: “Mobile phones are personal to you, they are with you all the time. Brands must not invade that personal space in a way that is unwanted. And there are issues around privacy that are starting to come through.” Yet, paradoxically, it is those not afraid to experiment, that will win.
Murphy suggests that as search “mode” differs by device, as does social media – where the mobile channel is about access and updates to information rather than, again, browsing.
“Facebook is a good example, with a clean efficient mobile site designed to allow users to update their ‘status information’ and access the status of friends, rather than browse profiles.”
News Corporation-owned MySpace, however, believes it is stealing a march on rivals in the space. A spokesman says: “MySpace Mobile is the most developed and aggressive mobile offering in our industry.”
He says that the service has carrier relationships and premium downloadable services with a number of operators including Vodafone in the UK, France, Germany, Spain and Italy, but expects to have relationships with “every carrier/device maker in the world in the near future”.
Furthermore, he predicts half of MySpace’s traffic to come from a non-PC in the future. In the US it has launched the MySpace Mobile Web, a free ad-supported web application on any device. And shortly it will be porting its MySpaceTV to MySpace Mobile.
There’s money to be made in mobile: advertisers, operators, media owners and sites all want to join the gold rush. Ultimately, though, it will be consumers dictating the pace and scale of change and innovation.
