Target Practice

Chris Goswami, Director of Product Marketing at Openwave, makes the case for targeting in mobile advertising

At the risk of alienating the entire advertising world, I’d like to start with a simple statement: in general, people don’t like advertising. In print publications, people flick past them; on recorded videos people fast forward through them; online, people click past them; and on the mobile phone, people delete them. TV advertising meanwhile relies heavily on entertaining the viewer, and making a lasting impression (see, for example, the recent ad for Honda shot at 10,000 feet and broadcast live). But this is not necessarily possible on the small screen of a mobile phone. So is mobile advertising, in fact a contradiction in terms?
On the one hand, it’s important to realise that the mobile phone is the ultimate personal device for most consumers. Which other gadget do we have within arms reach for eighteen hours a day? However, it is this same personal attachment which also raises problems in exploiting mobile for advertising – i.e., they don’t want their handsets to become like their home mailbox – another receptacle filled with offers for which they have no use.

Paradigm shift
With this in mind, it’s clear that what is needed is a fundamental paradigm shift in changing the public perception of advertising, from being an intrusive and generally irrelevant medium, into more of a “personal assistant”. Here at Openwave we’re working to put this paradigm shift into place, by developing systems which can build individual user profiles and engage with users on a highly relevant level.
Let’s think of a possible scenario: Consider a 40-something father who works nine-to-six and plays golf on weekends, and his 15-year-old daughter who has a bit of spare pocket money but would like to find ways to get more to spend on clothes.
The father probably uses his mobile to make calls and send texts only, and views it as a communications device. Receiving an advert on his mobile about summer jobs at Topshop for example, would cause some mild, or perhaps not so mild, irritation that he’d been contacted about something so irrelevant, swiftly followed by a rapid thumb movement to the soft Delete key. His daughter, however, is firstly likely to be much more tech savvy and use her mobile for a variety of lifestyle functions; and secondly, much more inclined to have an interest in a youth fashion store. To her, the Topshop advert is very relevant and she’s very likely to click through to find out more.
Using the same two characters, let’s say instead that the ad was a recommendation for a local golfing store that was promoting a golf weekend break… you get the picture.
The dad in this story needs to save time whilst his daughter needs to save money, but they can both use personal recommendations that have been filtered to provide a high likelihood of personal relevance. We all like a bit of help as long as it’s helping us to do something we need to do or something we actually want to do. So maybe people do like advertising after all - it’s just that we all like different ads.

Clickthrough rates
If we consider how this targeted approach could increase clickthrough rates, we might be on the verge of seeing rates in the tens of percent. Ad-funded operator Blyk, for example, has reported clickthrough rates as high as 29% This is an incredible figure when viewed against the current averages of around just a few per cent for online ads. If we consider the return on investment that such a high percentage would yield, mobile advertising suddenly starts to look like a very compelling medium. After all what other medium enables brands to determine not only who sees their ad but also when they see the ad and even where they see it? This golden-triangle of contextual awareness is only achievable through mobile.
Mobile advertising isn’t totally new; we’ve been working with operators for several years on pushing ads to end users, but the strategies behind the campaigns to date have not been sufficiently targeted to get the results that are needed. What is new is that the technology to enable mobile ads to be highly targeted is now available from companies such as Openwave. We can direct an ad to a subscriber based on their previous behaviour, or based on what they are doing right now (e.g., looking at a particular website), or based on where they are located at the time the ad is sent, or some algorithmic combination of all three. We are working very closely with mobile operators who essentially own this targeting information, and are helping them to responsibly exploit this 360-degree view of users which they possess.

Discoverability
Targeted offers also solve another problem that has been endemic in the mobile industry for almost 10 years. It’s called the “Discoverability” problem: operators have a wealth of content available, such as ringtones, videos, music tracks and other specialist content, but no easy way for their users to find content that’s relevant to them. Simply creating a portal and saying: “Come find something you might like using your tiny web browser and a lot of patience” has patently not worked as a strategy. This is a “pull” strategy. However, if an operator knows which of its customers fit into the demographic of, say, ‘England football fan’, through analysing past behaviour or examining current context or location, it can target them directly with special offers on tickets, wallpapers, kit etc, directly to their home screen or starting page. For the consumer, this removes the need for them to actively source this information by going online and navigating through a multi-stage process, during which half the users drop off at every click.
In conclusion, we see that mobile as an advertising medium is indeed uniquely advantageous – it moves with the end user and is in many ways an extension of the user’s personality. For precisely these reasons it is also the least tolerant medium if you get it wrong. I can overlook ads in my newspaper that I don’t like, but an irrelevant ad on my phone could really annoy me. For both of these reasons, the industry needs solutions that deliver a hitherto unprecedented level of targeting of mobile offers or ads. This also creates opportunities for cross-selling products, and indeed the take up of mobile data services in general, as mobile screens become ever more capable and ever more relied on by end users.
Issues of data protection and privacy can be overcome by keeping the process transparent, easy to opt-out of, and beneficial for the end user. Compare, for example, Amazon’s widely accepted and admired recommendation service, with Facebook’s recent foray into personalisation by stealth under the name of the Facebook Beacon program, which was widely criticised and eventually withdrawn. It is up to those in this burgeoning new value chain – operators, publishers, brands, and platform providers - to ensure that this new business model keeps the user’s interests right at the centre. This is the only way that any of us will benefit from the brave new world of mobile advertising.