Mobile Marketing: Mobile ads up

So, will mobile one day sit alongside TV, cinema, radio, press, online
and outdoor in brands' media schedules? The industry consensus seems to
be: "Yes, but it is still early days."

Luca Pagano, the vice-president of Buongiorno UK, the mobile content
specialist that owns the Blinko ring-tones-to-wallpaper brand, puts the
emergence of "a real market" for mobile advertising no sooner than "next
year or even 2008". He says: "What's out there at the moment I don't
even consider advertising, to be honest. But I would be bullish enough
to say we will see campaigns this year."

Simon Pont, the marketing director at Media Planning Group, agrees that
"in many regards, mobile phone marketing is still in its early years;
only just crawling, never mind walking". He adds: "For many brands,
advertising within the mobile medium is not without associational risks.
The mobile phone is arguably the most private medium there is. Any
commercial message, particularly an unsolicited one, is likely to be
deemed intrusive, met with suspicion and, quite possibly, ignored.
Brands want to feel welcome, not resented and met with distrust."

Mark Iremonger, the head of digital at Proximity London, also warns that
"mobile can be high-risk. It can be the quickest and easiest way to piss
people off if you get it wrong."

Perhaps this explains why mobile phone companies have been reluctant to
open up their networks for commercial exploitation by brands until
recently (page 37). "Traditionally, the operators have been very cagey
about letting advertisers near their customers," Pagano says. "They lose
about 30 per cent of their customer base every year, so a key objective
is to retain customers. Advertising has always been perceived as the
typical thing that would alienate customers and push them away to
competitors."

Operators are so fearful of the impact of commercial messages that they
even limit their own communications to customers to two per month,
Pagano adds. No wonder this has been a no-go area for other brands.

But things are changing with third-generation networks and their ability
to stream video and audio to customer handsets. Suddenly, operators are
on the lookout for content and advertisers may be able to help them
out.

"From the user's perspective, it's free content. From the operator's
perspective, it's an added service. And for advertisers, it's a way to
get to the audience," Pagano says.

Right now, the audience is primarily a young one. Pont says: "The
highest usage in terms of phone minutage, particularly in levels of
interactivity, is among teens. Teens are more likely to text, download,
play games, respond to discount incentives and opt-ins.

"The medium becomes an obvious point of access for music and film
advertisers, but has less immediate logic for upscale brands. Added to
which, the majority of opt-in lists advertisers can buy are produced and
supplied by ringtone and SMS companies."

Iremonger adds: "Most upmarket advertisers see mobile primarily as a
youth medium, although some of the car brands, such as Audi and Volvo,
are starting to do interesting things, such as being able to configure
your car and keep the specs on your phone."

One problem for quality brand advertisers, though, is the
technology.

Much has been made of the potential of location-based services, for
example.

But Niek van Veen, a telecom and mobile researcher at the IT analyst
Forrester, says because of the wide area covered by mobile base
stations, "the location is still uncertain. It hasn't been very
successful."

Barry Lee, an account director at Zed Media, adds: "3G needs to be a
little more stable. The signal quality and bandwidth isn't there all the
time. If I'm a premium brand with premium content but it ends up
pixellating, it has a negative impact on the perception of the
brand."

There are other challenges. The small size of mobile phone screens poses
a problem not only for ads that require detail to get their message
across, but for those with lengthy terms and conditions, such as
financial advertising.

The maximum duration for MMS video clip files is about ten seconds,
hindering viral marketing.

Add to this that you can only market to users who have gone through a
double opt-in procedure, that not all mobile systems can admit clickable
links in MMS and that the medium has tracking issues, and you begin to
wonder why brands would bother at all.

Perhaps the most obvious reason is the level of personalisation that can
be achieved. "We can be much more specific about our advertising," Steve
Griffiths, the managing partner of Iconmobile UK, a mobile services and
applications specialist, says. "You can deliver to a person, not a
computer."

Another advantage is the reach of the medium. Last year, the Mobile Data
Association confirmed mobile phone penetration in the UK had exceeded
100 per cent (with many people owning more than one mobile).

And while not everyone has a 3G phone yet, Wayne Arnold, the managing
director of the digital marketing agency Profero, predicts they will
soon.

"3G has about eight million users out of the total UK population of 60
million," he says. "Most mobile phones now have 3G capability and, with
people changing their phones every 14 months or so, by Christmas 2007 we
should be up to 60 or 70 per cent penetration."

Arnold adds: "If you put an ad on the homepage of Vodafone Live!, the
reach is very high."

Response rates are good, too. Arnold cites an unnamed client campaign in
which 10 per cent of the entire 3G audience responded. "But there is an
element of novelty value here," he concedes. "Also, you are pretty much
standalone."

Iconmobile also reports high response rates in a three-month mobile
advertising pilot in Germany, involving six advertisers. "We served one
million ad impressions per month," Griffiths says. "The response rate
was initially 6 per cent then reached a plateau at 2 per cent."

What is clear from these early experiences, however, is that if brands
finally conquer the mobile medium, it will not be with advertising as we
know it.

Nick Lane, the principal analyst at the IT research company Informa
Telecoms & Media, says: "A TV model on mobile wouldn't work. If you're
going to watch television on a mobile phone for five minutes, will you
want two or three of those minutes to be ads? Not really."

Arnold believes the key questions that advertisers need to ask are why
would you want to get a marketing message on the phone and what unique
content are you going to provide to the user?

This challenge is forcing brands to rethink their communications for an
environment where marketing messages need to offer something useful or
entertaining to be seen in the first place. And those in search of a
recipe for success need look no further than Jamie Oliver.

Profero's branded-content venture Inventa helped the TV chef make the
record books with the first UK made-for-mobile series, which gives
subscribers simple recipe suggestions relating to the weather or time of
year, for instance.

"The audiences for some of these are bigger than for Radio 4," Arnold
says. "We have had 90,000 or 100,000 people downloading them."

Given these audiences, Arnold predicts the made-for-mobile content
market could easily spawn a social phenomenon similar to Little Britain,
which started out on Radio 4, in the next 12 months. And with the right
kind of content, there is no reason why advertisers might not be a part
of it.

Ogilvy & Mather recently produced a 90-second piece of branded content
for the Campaign Against Living Miserably, a Department of Health
initiative aimed at depressed young men, which ran on Mobuzz, a European
multiplatform TV channel for mobile, to an audience of more than one
million.

And in Germany, McDonald's sponsors a mobile soap opera, which is
delivered twice daily using WAP images with captions and accompanying
MSN Messenger video streams. Not all mobile advertising needs to feature
complex video, though.

One of Arnold's favourite mobile marketing campaigns to date, for
example, is Allergeeze's simple idea of getting users to sign up for
text alerts that tell people of impending high pollen counts and remind
them to stock up on Allergeeze.

Indeed, text messaging continues to be the dominant force in mobile
marketing, with the research company Jupiter estimating a total spend of
x111 million across Europe by the end of this year. But there is a major
event that could change things in the coming months.

"The big one this year will be the World Cup," Arnold says. "Big games
will be watched on television but a lot of the games will be at 4pm,
when people can't see them. So it will be the first real test of whether
mobile TV will really kick off."

If it does - and both T-Mobile and Virgin Mobile have promised to offer
their customers World Cup highlights on their mobiles - then Lee
believes the emergence of mobile as a major advertising channel could be
just around the corner.

"I think mobile will develop truly to become the 'third screen'," he
says. "Although I personally struggle to see someone sitting down to
watch Coronation Street on their mobile."

JAPAN CALLING: THE WORLD'S MOST ADVANCED MOBILE MARKET

What might the UK's mobile advertising market look like in a couple of
years' time? One answer is only half-a-day away. In Japan.

There, according to Dave McCaughan, the executive vice-president and
director of strategic planning at McCann Erickson Japan, nearly half of
all phones are 3G and 85 per cent of housewives have a camera phone. "A
camera phone is mass-media," McCaughan states.

The prevalence of camera phones has helped Japanese advertisers overcome
a problem faced by their UK counterparts: how to get phone users from
the mobile portal to brand sites without having to go through a
laborious search and navigation process on the handset.

The answer is a small barcode called the Quick Response code (in the
bottom-left corner of the picture opposite), invented by the Japanese
corporation Denso-Wave in 1994. Originally intended for tracking vehicle
parts, QRs are now commonly used to store web addresses in a format that
can easily be read by camera phones.

"If you are flicking through the latest Playboy or Elle, 80 per cent of
the ads would have a QR code," McCaughan explains. "You take a photo of
the code and it directly links you to the promotional site."

He cautions about presuming that QR codes could take off in the UK,
though.

"I've worked in ten countries and the Japanese read the back of a packet
more than any other people I've come across," he says. And the country
is no more advanced than Britain in terms of video content.