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The use of the mobile phone as a mass marketing tool has not gone unnoticed over the years, but, to date, not much has been done about it. Mobile operators use the channel to text information to their customers. Mobile phone shops also do it. Some less scrupulous companies will send junk texts to mobile phone users who they don't have a relationship with.
However, much of the fun of mobile advertising has been tempered by last year's European Commission legislation on electronic communication - the so called Spam Directive - which attempts to put a stop to unsolicited, spurious and annoying texts (and emails for that matter) being sent to consumers. To all intents and purposes it would appear that the idea of using the mobile channel as an advertising medium is a dead duck.
But think again. There are ways of getting around the spam laws and the media brokering industry - and the advertising industry - is still very keen to use this unique channel that takes them right in to the hand of the customer. And 3G networks hold the key to unlocking this lucrative money box.
The key service for 3G is streamed video: it is what all in the mobile industry are currently plugging as the next big thing and, to date, there have been some limited trials and offerings, most notably 3 in the UK, offering news, sports and, with a slightly coy look, adult.
There are currently a multitude of content development companies out there touting systems to develop and deliver streamed video in all content sectors, from live news footage to naked comedy news. Vodafone Live!'s 3G services are being marketed and demonstrated around a series of ‘mobisodes', short one minute episodes spun of from soap operas and popular TV programmes - in the Vodafone instance from hit show 24.
All have the same thing in mind: offer streamed TV style content and the punters will come.
Well, that isn't quite how it is working out. Yet the advertising industry is not slow on working out that there is a huge opportunity with streamed video content - and that it may also be able to drive up the use of 3G.
The key to using mobile as a marketing channel is that you do what you do with TV ads - you hang them around the content: they are an addition to the content, not a reason to watch in themselves.
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Advertisers would love to send ads to mobile phones, either as text or as a streamed video, but they can't because of the spam laws and the fact that it would drive mobile phone users insane and be totally counter productive," explains Mark Jenkin, project manager for Advertext - a platform being developed by Lucent to allow text based ads to be added to SMS, MMS and, eventually, deliver ads on streamed video (see panel). "Let's face it, when Volvo wants to advertise a car, it doesn't send a signal that turns on your TV, shows the ad and then turns it off again – that is not what people want. Same with mobile marketing."
Instead, you have to build advertising in to the products and services that customers already use. And video streaming services are an ideal environment for this to take place.
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There is always a short delay when you connect to your streaming service, even over 3G," says Jenkin, "this is an ideal opportunity to put out an ad. And the beauty of it is, is that the customer will have opted in to receive ads in this way when they have subscribed to the service, thus eliminating all spam worries."
This has another, almost unexpected advantage. Because the network operator can sign up advertisers for a fee and get customers to agree to receive targeted ads, it means that it can subsidise the 3G services, driving more customers to sign up for them.
3G needs something like this to drive uptake among consumers. It is all well and good talking about how great 3G could be, but it is nothing without a sizeable user base, which can grow as 2.5G users upgrade. Being able to offer it cheaply - yet still profitably - is just what is needed.
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It is the sort of thing that can start a 3G price war," says Jenkin, "and that is just what the 3G market needs. It also creates a lot of interest in 3G services among the public. And, if the advertising community plays its cards right, it leads to some cool, must-have ad content on the phones that then gets passed around. Everyone wins."
In fact, the advertising community is crying out for such services and Lucent is currently working on a platform to deliver precisely this for one UK based mobile operator, which insists on going straight to mobile video streaming based advertising and is due to begin trials in the next six to 12 months.
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Analysts also see it as just what the industry needs as it offers a chance to lower the cost of entry for consumers in to these services, while still maintaining ARPU," says Jenkin. "It also offers a great opportunity for third parties to come along and offer bundles of services, funded by adverts that can then be accessed through any mobile service provider. This has really grabbed the imaginations of the media buyers, who can not only sell more adverts at a time when their traditional medium - TV - is in the doldrums, but also be at the centre of a whole new medium - mobile streamed video."
For instance, someone like Time Warners, say, could offer services that stream film and news content, offer music downloads and all funded by advertising for, say, Kia cars or some other advertiser or advertisers who are right for the demographic of the service subscribers. It isn't inconceivable to see specific adverts send to specific groups of subscribers - offering the advertising industry not just a new medium, but a much more targeted approach to reaching the right people to market to.
But there are, of course, problems with getting this Utopian view of 3G mobile marketing up and running. As ever, formatting the content for the vast array of handset types is tricky, as well as having to accommodate a range of different streaming technologies, such as MP4 and MPEG to name but two. And even if these issues are successfully dealt with, will the punters come? Price and cool content should drive up take of 3G, but it has failed so far, would advertising really be a key driver. "
A lot of the drive will come from whether telcos have any success with today's SMS and, in the not too distant future, MMS based advertising services," says Jenkin. "If you can't make money from SMS and MMS then what hope is there for streaming?"
The answer to that question remains a resolute "don't know". Predictions as to the success of mobile services are notoriously unreliable. As Jenkin says, the success of SMS advertising services could be a useful bell-weather for streaming. The fact that it might make 3G more affordable to the mass market may be all that is needed and, as with commercial television, adverts will become an accepted part of wanting cheap access to useful services - although, if asked, it is doubtful that anyone would actually want to consider, in affect, paying to receive adverts. Author:
Paul Skeldon
Information:
w: www.lucent.com
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