Mobile Advertising - Learning to play by the rules
Yesterday I attended a panel discussion titled "Mobile Advertising - Industry Revenue Enhancer or Distraction?" with key industry players (information below) who shared their experience and insight on the current status and potential of mobile advertising.
The discussion centered around the fact that while mobile advertising is getting a lot of attention in the mobile industry it has not yet consolidated as a significant revenue generator across the value chain, for operators and advertisers.
The fact that the panel was made up by vendors allowed us to get a clear picture of their perspective of the industry.
Interestingly, the panel spent more time discussing a question from the audience regarding ROI and metrics than on anything else. Their input was valuable and insightful, however, it seems from the long explanations that this is an issue that is a long way from being resolved.
Just like other new players before them, mobile advertising vendors talked about how the Internet is changing the mobile industry. Operators are many times seen as an obstacle to new opportunities; this was not explicitly mentioned by the panelists but some did mention that operators need to adapt to these changes.
In this case, I'd like to side with operators.
First of all, operators are a critical element and few things can actually happen without them. Even the introduction of the iPhone, a device introduced by an outsider that changed the industry, was launched with exclusive distribution by AT&T.
Secondly, when new players -in this case advertisers- come into the mobile world, they need to learn to play by the rules. This is something others have learned before and we have seen it over and over again, mainly with the increasing number of players coming from the web domain including Yahoo, MSN, AOL, Apple and Google. Initially they seemed to pose a threat to mobile operators but in the end, only the ones that are truly successful in the mobile domain are playing by the rules.
There are reasons for these rules and valid reasons why operators may be reluctant to blindly embrace new opportunities such as mobile advertising.
Operators face many challenges including industry regulation and technology issues such as the wide variety of devices in the market with different cababilities; in other words, not everyone has an iPhone. There are also technological issues on the side of the network.
However, technology issues can always be resolved and the panelists were certainly able to show this; the new capabilities they shared with us are both exciting and full of potential.
Perhaps the single critical issue that can jumpstart the mobile advertising revolution is the lack of widely accepted metrics.
Mobile advertising faces similar issues other media did in the past, and currently we have very sophisticated metrics that are widely accepted by advertisers and used by TV, radio, print media. We expect something similar for mobile advertising to come soon, it is just a matter of time. Performance metrics can only be proven based on historic data and the media is still too new; however this is expected to change soon as we are reaching a tipping point.
It is not just a matter of operators trying to get a larger piece of the pie; it is a much more complex issue than that. As other VAS vendors have learned, building a strong business case for mobile operators is tricky and specifically for mobile advertising its complexity grows because of additional players in the value chain.
For this to happen, however, precise metrics are needed. After all, if the pie cannot be measured, how can it be divided?
"Mobile Advertising - Industry Revenue Enhancer or Distraction?" Panel discussion hosted by the Massachusetts Network Communication Council. Moderator - Kevin Wiant, Harborway. Panelists: Jorey Ramer, Founder & VP Corporate Development, JumpTap, Inc., Paul Schaut, Chairman and CEO, Modiv Media, Cheng Wu, Co-Founder and Chairman, Azuki Systems, Jim Levringer, CEO Nextcode, Rob Orgel, CEO Quattro Wireless. Held Wednesday, December 10, 2008 at The Emerging Enterprise Center, Waltham, MA.
The discussion centered around the fact that while mobile advertising is getting a lot of attention in the mobile industry it has not yet consolidated as a significant revenue generator across the value chain, for operators and advertisers.
The fact that the panel was made up by vendors allowed us to get a clear picture of their perspective of the industry.
Interestingly, the panel spent more time discussing a question from the audience regarding ROI and metrics than on anything else. Their input was valuable and insightful, however, it seems from the long explanations that this is an issue that is a long way from being resolved.
Just like other new players before them, mobile advertising vendors talked about how the Internet is changing the mobile industry. Operators are many times seen as an obstacle to new opportunities; this was not explicitly mentioned by the panelists but some did mention that operators need to adapt to these changes.
In this case, I'd like to side with operators.
First of all, operators are a critical element and few things can actually happen without them. Even the introduction of the iPhone, a device introduced by an outsider that changed the industry, was launched with exclusive distribution by AT&T.
Secondly, when new players -in this case advertisers- come into the mobile world, they need to learn to play by the rules. This is something others have learned before and we have seen it over and over again, mainly with the increasing number of players coming from the web domain including Yahoo, MSN, AOL, Apple and Google. Initially they seemed to pose a threat to mobile operators but in the end, only the ones that are truly successful in the mobile domain are playing by the rules.
There are reasons for these rules and valid reasons why operators may be reluctant to blindly embrace new opportunities such as mobile advertising.
Operators face many challenges including industry regulation and technology issues such as the wide variety of devices in the market with different cababilities; in other words, not everyone has an iPhone. There are also technological issues on the side of the network.
However, technology issues can always be resolved and the panelists were certainly able to show this; the new capabilities they shared with us are both exciting and full of potential.
Perhaps the single critical issue that can jumpstart the mobile advertising revolution is the lack of widely accepted metrics.
Mobile advertising faces similar issues other media did in the past, and currently we have very sophisticated metrics that are widely accepted by advertisers and used by TV, radio, print media. We expect something similar for mobile advertising to come soon, it is just a matter of time. Performance metrics can only be proven based on historic data and the media is still too new; however this is expected to change soon as we are reaching a tipping point.
It is not just a matter of operators trying to get a larger piece of the pie; it is a much more complex issue than that. As other VAS vendors have learned, building a strong business case for mobile operators is tricky and specifically for mobile advertising its complexity grows because of additional players in the value chain.
For this to happen, however, precise metrics are needed. After all, if the pie cannot be measured, how can it be divided?
"Mobile Advertising - Industry Revenue Enhancer or Distraction?" Panel discussion hosted by the Massachusetts Network Communication Council. Moderator - Kevin Wiant, Harborway. Panelists: Jorey Ramer, Founder & VP Corporate Development, JumpTap, Inc., Paul Schaut, Chairman and CEO, Modiv Media, Cheng Wu, Co-Founder and Chairman, Azuki Systems, Jim Levringer, CEO Nextcode, Rob Orgel, CEO Quattro Wireless. Held Wednesday, December 10, 2008 at The Emerging Enterprise Center, Waltham, MA.
This was very well written and an accurate depiction of the event, which I also attended. Although, I sensed a stronger bias against the carriers during the meeting. One area, which some of the vendors, and internet players, don't understand about wireless’ value, is on the relationship side, billing and otherwise. The carriers may be guilty of not being as nimble and innovative as the internet players, and others, want them to be, but they have a higher level of scrutiny applied to them on a laundry list of issues. This list includes, an intolerance for any spam, heightened privacy and security, appropriateness of content, timeliness of delivery, billing accuracy and network reliability. If the carriers do not focus on these key issues, that their subscribers demand be addressed first, innovation will be rejected. So, while I would like Mobile Ad to happen sooner than later, I will wait until 2010, after the carriers make sure it is done right... Anonymous, because I do not want carriers thinking I am pandering to them as a vendor.
ReplyDeleteWhile mobile operators play an important role, more and more traffic and site discovery is happening off deck. The carriers may control the demographics but there are still plenty of ways to segment and target your audience contextually and behaviorally today. There is no need to wait until 2010. We can track impressions, CTRs, and even conversion data. No need not to get involved today.
ReplyDeleteI agree with this article. I believe that we have more bigger issues why the mobile ad is not 'flying' yet is because of the mindset of two biggest stakeholders which are : the operators and brand/advertisers.
ReplyDelete1. Operators still didnt totally change as media company. They treat mobile ads service as a tool for their subcriber retention startegy, which sometime is contrary with the media company's objective.
2. Brand/advertiser not willing to take a risk by waiting a complete mobile media environment created. As mention on the article, brands are demanding for a sophisticated metrics which currently we are still lack on this.
So with these 2 mindsets, we are still going to have issues to make this mobile advertising flying.
But for the last 1 year, I saw good progress on mindset changes on operators and brands, but still we need faster changes to make sure that mobile advertiser happen in 2009.