Telemedia Magazine issue 45 by annika micheli

billing & engagement for value added services & content

IN THIS ISSUE

ISSUE 45 | £4.99

Affiliate Marketing 2017 looks like being the year that affiliate marketing grows up and shakes out – and it couldn’t come at a better time as Richard Dennys, CEO, New Webgains shows

Customer care

One of the key areas of improvement in PRS is handling customers – and the UK is leading the way, as Paul Skeldon finds out

FEATURING

TELECOMS

Independent company to handle PRS complaints and refunds set up to help boost service use

The UK PRS industry has got a boost thanks to changes in how customer complaints can be handled. Until now, one of the biggest issues with PRS has been handling customers who get bill shock – and this has contributed to MNOs

PAYMENTS

Shoppers embrace m-payments

and L1s and 2s shying away from running such services in the UK. But help is at hand. Building on years of experience in the telemedia industry and experience of handling customer care, compliance and digital community management, The Consumer Care Service (COCASE) – part of the Cute Media Group – has been formed to help both the industry and consumers get the most out of PRS and to help the industry grow. “We don’t operate any PRS services ourselves so we can be totally independent and neutral, which allows us to defend the consumer’s rights as well as acting in the best interests of the service providers,” explains COCASE CEO Andrew Fisher. “We are experienced at interpreting when a refund is rightfully due and when it isn’t and have earned >> 4 MOBILE

Mobile drives digital ad spend past £10 billion threshold Driven by advertisers’ need to tap into people’s rising use of mobile to watch content, digital advertising grew at its fastest rate for nine years – by 17.3% to £10.3 billion in 2016 – according to the Internet Advertising Bureau UK / PwC Digital Adspend report. The last time annual growth was higher was 2007 (38%). More news, views and analysis at www.TelemediaOnline.co.uk

A study by Mastercard shows that across Europe m-payments are being embraced by shoppers >> 11 PAYMENTS

VIVA Bahrain boosts Google Play VIVA Bahrain becomes the latest firm to use carrier billing to drive sales on Google Play >> 11 PAYMENTS

Tola enhances online mag sales Tola Mobile rolls out mobile payments to drive sales of online magazines >> 12 PAYMENTS

The future of digital payments A look at DIMOCO’s latest report finds carrier billing taking on credit cards across the continent >> 17 PAYMENTS

Protecting m-pay data As more people use m-payments the more you need to protect their data, says Jose Diaz from Thales >> 20

Driving Value Added Services and Monetising Content

2017 Event Brochure Inside – Page 13-16

9-11 October 2017

>> 4

HOTEL H10 ANDALUCIA PLAZA MARBELLA, SPAIN

MARKETING

Oxygen8 rebrands as Dynamic Mobile Billing as its focus shifts Oxygen8 has commenced a re-brand exercise to Dynamic Mobile Billing (DMB) to better reflect its changing focus on mobile payments – and to smooth its re-entry into the PRS business. Supporting multiple payment and engagement technologies across SMS, USSD, direct carrier billing, voice and E-money solutions – all underpinned by local regional offices and personnel that deliver ‘best in class’ levels of support – DMB is aiming to be the market leading, optimised and trusted billing partner of choice to VAS merchants and beyond. With an experienced management team across the globe, DMB will build on the established footprint Oxygen 8 built up in its key billing markets such as Australia, Canada, Caribbean, Ireland, Kenya, Mozambique, Rwanda, South Africa, Tanzania, Uganda and the

UK, while it continues to expand its footprint further in Africa throughout 2017. Kev Dawson steps into the role of CEO for the DMB business. A well-known face in the telemedia industry and a current board member of AIME, he will spearhead a billing-centric, globally operating business that will support DMB’s established and new clients in the micro-payments landscape as it evolves, develops and grows. Oxygen8 made a decision in the final quarter of 2016 to step away from many PRS services, advising its merchants that it would no longer accept new billing intakes for services that it felt were driving

customer complaints to levels that it considered were unacceptable. Having observed the work within industry and its efforts to address the majority of the most pressing concerns through Project 30 and Project Slimline, plus moves to better handle complaints, the company now feels it can re-enter the UK PRS marketplace with a renewed confidence in its future scope and viability. “With our continued desire to contract with sustainable clients moving forward, we aim to become a valued part of the

value chain again,” says new CEO Dawson. Tola Mobile is a further business entity operated to underpin ‘EMoney payments’ and is regulated by the Financial Conduct Authority (FCA), operating independent to Dynamic Mobile Billing yet collectively offering merchants a comprehensive suite of mobile payment solutions. Tola Mobile has now finalised its structure in relation to a dedicated management team, resources and operations so to enable it to focus and to grow independently.

Driving value added services for voice and mobile

TELECOMS

Independent company to handle PRS customer service

<< 1 the trust of our clients to execute those refunds quickly, which again helps to defuse anger and protect reputations.” This need for speed and efficient communication is a key part of what COCASE brings to the thorny issue of PRS complaints. Until now, customers who experience problems often don’t know where to turn and call anyone from the publisher who ran the ad they first saw the service in, to the service provider, to the network operator or the regulator. Often they would be passed around, resentment and anger building, so that complaints easily escalate. “COCASE runs native English speaking agents from its Brighton HQ, around the UK, the US,

Australia and parts of mainland Europe to handle complaints 24x7,” says Fisher. “We follow the sun and allow consumers to call up when they detect a problem and want to deal with it.” This ability to handle things quickly, knowledgeably and efficiently are key drivers for setting up a third party contact and complaint handling service. The company has already handled more than a million support cases over the years and through that experience it has consolidated all that knowledge to create COCASE. The company has also created the Xaps platform, a proprietary, bespoke technology suite, which is cloud based and uses state of the art call queueing and routing tech, bespoke IVR, automated opt outs

and reporting. In addition, the company will analyse calls and complaints to form a feedback loop that, in theory, will let the company not only resolve these issues, but help service providers constantly update services so to remove pain points and make the industry much more effective at being entertaining. “It creates a virtuous circle,” says Fisher. “By enhancing customer experience, you increase customer happiness, this reduces complaints and escalations, which improves the commercial environment, which creates and better customer experience – and things should just get better and better.” And the industry has welcomed the move. Kevin Dawson

from Oxygen 8 told us that: “Any positive steps to manage consumer issues are very useful and show an industry making its own efforts to survive, build and grow.” Rob Weisz, CEO of Fonix echoes this: “Anything that will provide consumers with a faster, more efficient and knowledgeable response from call centre agents to support a mobile billing enquiry is only a good thing and something that I think the whole market would welcome. As an industry we must strive to improve the awareness and experience of mobile operator billing and having dedicated expertise in consumer care is a good thing.” FOR MORE ON CUSTOMER SERVICE AND COCASE SEE p22

MOBILE

Mobile drives digital ad spend past £10bn << 1 As almost half (48%) of UK internet time is now spent on smartphones, mobile ad spend rose 50.8% to £3.87bn. Mobile now accounts for 38% of all digital ad spend, up from 4% just five years ago. However, it accounts for 63% of video spend, 76% of Content & Native (including social media news feeds) and 79% of social media spend. Mobile video is fastest-growing ad format Spend on mobile video ads more than doubled (up 103%) to £693 million – making it the fastest growing ad format. It accounts for 29% of the total growth in digital ad spend. The rise in mobile video ad budgets reflects online YouGov data showing that in the last six months, 54% of British smartphone users watched video clips on their phone, with two-in-five of these saying they do more of this than a year ago. A significant number have also watched TV programmes (17%) and films

(11%) on their smartphones. This behaviour is much more prevalent among 18-24 year olds, with 75% watching short clips, 44% watching TV and 33% watching films on mobiles. Sixin-10 people who watched short clips, TV or Film on their phone did so whilst ‘out and about.’ The rise in people consuming mobile and video content has accelerated digital’s growth rate to its highest level for nearly a decade,” said the IAB UK’s Chief Marketing Officer, James Chandler. “Reaching the £10 billion threshold has been made possible by brands breaking the mould, trying innovative formats and making the most of video to reach and amaze people. It’s impossible to ignore the issues the industry is facing at the moment, but digital never stands still and these figures are testament to the long term strength and power of digital.” Video – across mobile and %s – is growing at 56%, driven by outstream/social in-feed’s huge 234% rise to £465 million. Out-

stream accounts for 43% of all video spend but 56% of mobile video. Pre- and post-roll video ad spend grew 12% to £603 million (55% share of all video). Sebastien Bardin, Sony Mobile’s European senior digital marketing manager, added: “Online video is becoming a bigger priority, providing an impactful and cost-effective incremental reach. In particular, outstream video is great for engaging with our target audience in premium, trusted and viewable environments without disrupting their media consumption or being too intrusive.” Nearly three-quarters of display is traded programmatically Display ad spend rose 26% year-on-year to £3.77bn in 2016 – 72% of which was traded programmatically (£2.71bn) – with significant growth coming from direct deals and private marketplaces. “The biggest change in how display ads are sold is the rise of programmatic direct, which

More news, views and analysis at www.TelemediaOnline.co.uk

now accounts for nearly half of sales,” says Dan Bunyan, Senior Manager at PwC. “Right now, considerations such as brand safety mean the advertiser is rightly demanding more certainty in the placement of their ads and the industry is evolving quickly to find new solutions to address brands’ needs in this dynamic environment” Ad spend on social media sites grew 38% to £1.73bn, accounting for nearly half (46%) of display. Social media spend on mobile alone grew 54%. Content & Native ad spend – which includes ‘advertorials’ and ads in social media news feeds – increased 28% to £1.17bn (31% of display). Search and classifieds Driven by mobile, which grew 48%, paid-for search overall grew 15% to £4.99bn – a 48% share of digital ad spend. Classifieds, including recruitment, property and automotive listings, grew 8% to £1.48bn (14% share).

FROM THE EDITOR THE BIG GUY Paul Skeldon paul@TelemediaOnline.co.uk ART DIRECTOR Victoria Wren victoria@wr3n.com CONTRIBUTORS & CONSULTANTS Rory Maguire, Toby Padgham, Chris Newell, Edward Boddington, John Strand, Peggy Ann Salz, Bruce Pharoah, Paul Dunone, Jarvis Todd, Sheldon Johns, Mark Birkett, Eric Feltin, Tim Green SALES & MARKETING info@TelemediaOnline.co.uk PRODUCTION DIRECTOR Annika Micheli annika@TelemediaOnline.co.uk PUBLISHER Jarvis Todd jarvis@TelemediaOnline.co.uk TO SUBSCRIBE www.TelemediaOnline.co.uk CIRCULATION ENQUIRIES Ellie Gold ellie@TelemediaOnline.co.uk WHAT WE’VE BEEN LISTENING TO If should fall from grace with God, The Pogues Countdown to a Breakdown, Long Tall Texans WHAT WE’VE BEEN AMUSED BY Nothing: the world is going to hell in a handcart WHO WE’VE BEEN FOLLOWING @leftfield WHAT WE’VE BEEN READING ABOUT Officer Kilroy’s role in WW2 – by Mike Liardet SUMMER 2017 WILL BRING... Britain back to the 1950s TELEMEDIA MAGAZINE is published five times a year and circulated in print to qualified readers and downloaded in digital format to 12,000+ requested readers. BUSINESS ADDRESS: Ground Floor, Virginia Cottage, Nash Lane, Scaynes Hill, West Sussex, RH17 7NJ, UK. Web: www.TelemediaOnline.co.uk Overseas subscriptions and non qualified readers can obtain Telemedia Magazine with an annual subscription rate of £15 / 20. Refunds on cancelled subscriptions will be provided at the publisher’s discretion, unless specifically guaranteed within the term of subscription. © World Telemedia Ltd. All rights reserved. No part of Telemedia Magazine may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording on any information storage or retrieval system without the written consent of the publisher. The contents of Telemedia Magazine are subject to reproduction in information storage and retrieval systems. Repro and Print by Trio Offset

Customer service – the new name of the PRS game One of the many recommendations to come out of Project Slimline and Project 30 was the suggestion of setting up an independent customer service handling company that could handle all the issues PRS generated without dragging operators into the mix. And lo, it came to pass that the good people at Cute Media have done just that. They have set up CoCase (Consumer Care Service), to handle the calls and emails from people who think they have a problem with PRS services. The company has already handled more than a million complaints on more than 15million pieces of content over the years and through that experience it has consolidated all that knowledge to create CoCase.

The move is a canny one. It stops operators and the PSA getting involved with minor cases and can also allow any problems to be dealt with swiftly. In short it should make things a lot more straightforward in the PRS world. Of course, many aggregators and service providers pride themselves on not getting involved any more in “that end” of the telemedia industry, but with any service there are always going to be issues and some complaints. The increasing use of affiliate marketing also potentially can generate issues, even for those trying to play a straight bat. Handling them this way makes great sense. There will still be some massive scams that do need regulatory attention, but something like CoCase can potentially flag these up much more rapidly to the PSA.

Issues with rogue affiliates, for instance, would become apparent very quickly as CoCase’s analysis of calls and emails coming in would spot the trend. While this does much for the industry, it also helps the consumer. It is a first line of defence against things going wrong and a first port of call where the customer can be talked down calmly – without a refund. This line of policing seems to me the sensible way to go. People like using PRS services and handled like this they become inherently safe to use. www.telemediaonline.co.uk @telemediaTweets

Paul Skeldon. editor

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Driving value added services for voice and mobile

AFFILIATE MARKETING

2017: the year affiliate marketing shakes out and grows up? New technology, ROI pressures and tighter regulations all means affiliate marketing has had to grow up. So what is going to change? Richard Dennys CEO, New Webgains, predicts the top trends for affiliate network marketing in 2017 As budgets tighten, measurement improves and ROI pressures increase, 2017 is set to be another significant year for the affiliate marketing industry. The introduction of additional technical disruptors, swathes of new niche publishers and fresh thinking in AI and Machine Learning technology will consolidate the affiliate channel’s position in the industry as one of the most, if not the most cost-effective customer acquisition option. This means that anyone looking to use affiliates needs to be aware of what this means for their business as well as the affiliates themselves. So what do you need to look out for?

NEW TECHNOLOGY DOMINATES

A vast number of start-ups and scale-ups have been founded throughout the performance marketing and adTech ‘ecosystem’ over the last few years. This will certainly continue throughout 2017 and beyond, especially as devices and connections incessantly improve.

In Western markets at least, new tech entrants are the hyper-niche players looking at either new innovative cashback or incentive models, or blogger/vlogger tools and ‘network delivery’ tech. In nearly all cases however, their models are dependent on vast economies of scale in order to turn a profit, or attract a buyer. Although this industry doesn’t have too many barriers to entry, there are innumerable barriers to scale. It will be interesting to see how this continues to develop over the coming year or two.

MOVE TO MOBILE VIA ‘INSTORE’

For many years the industry has been heralding the arrival of a true mobile era. It’s clear now that cross-device activity has reached ubiquity and this will continue to accelerate in 2017. As well as the convergence of desktop to mobile – which has been in place for a couple of years now – we’re seeing a blend of in-store, mobile and daytime workplace purchasing economies.

With new stringent controls arriving in 2017 across the EU region (regardless of Brexit), the grey areas of complexity sit around data protection. Consumers have much more power to decide what happens to data and fines are huge for non-compliance, which is a massive issue for cookie-based advertising models. This time next year this will be considered as one of the number one issues for everyone involved in eCommerce.

transactions and requests, and unlike a human contact centre, it can adapt its responses based on the customer’s purchase history and local weather. Soon everyone will be clamouring to enter the AI space and in 2017 many more brands will start to build chatbots, especially for Facebook. This will present a new challenge for marketeers as they race to upskill and train their staff – the technology is only as good as the team behind it.

RELEASE THE ROBOTS

CONSOLIDATION OF LOW-COST, TECH-ONLY NETWORKS

Advances in artificial intelligence (AI) technology will soon make human interaction a thing of the past unless there’s an issue or cause for celebration. The popularity of AI is fast outpacing the on-going development of current technology. As IBM reports, there’s a significantly advanced adoption curve for AI compared to that of app stores 10 years ago in the retail industry. For routine enquiries, a welltrained chatbot can satisfy an increasing range of customer

More news, views and analysis at www.TelemediaOnline.co.uk

Low-cost, technology-only vendors could witness a steep reduction in attractiveness at all levels of customer and publisher size. At Webgains we are seeing an influx of new clients who are moving away from low service, high tech platforms once they realise the reduction in operation cost doesn’t cover the rise in staff costs and the expertise required to operate the programmes effectively. Low fees inevitably result in

a low-touch, volume play, so we will likely see a shake-out of several smaller vendors in the industry; meaning companies either buying each other out or going bust, and only one or two from the top end alongside vertical niche specialists will come out as winners. Other potential casualties are the larger networks who bet their houses on new smart-tech and risk turning their backs on the profitable, high-service driven business practice that clients need.

BREXIT-FORCED AFFILIATE MARKETING GROWTH

European integration and sustainability is still of critical importance in a post-Brexit world. From invoicing and tax planning, to data protection and the movement and freedoms of staff, the UK will be focused on staying lean and offering routes

to new and exciting markets not available to us through EU membership. The affiliate channel is low risk and offers high ROI, making it the most attractive option for

most developed in the world and in 2017 we’re likely to see more UK retailers using the affiliate channel to expand into new markets. Following the recent weakening of sterling, we

While display and search marketing continue to disappoint expectations, in 2017 affiliate marketing has a great opportunity to burst back into the mainstream retailers in 2017. While Display and Search Marketing continue to disappoint expectations, improvements in attribution are now consistently proving that well-run affiliate networks offer the highest ROI in the industry. In 2017, affiliate marketing has a great opportunity to burst back into the mainstream.

MINI-BOOMS & BUSTS

UK ecommerce is arguably the

can see UK exporters are having a great year, while importers of good and services are starting to struggle. Although consumer costs have gone up, such as holidays, petrol and food, global businesses now see excellent value in assets and the cost of people following the UK’s recent ‘devaluation,’ fuelling the beginning of wage inflation in all areas.

STUMBLING UNICORNS

At the top end of the market, I’m seeing and hearing that Brexit and the US election seems to have weakened the investment appetite of some venture capitalists and made them nervous. This year’s political events will have a direct impact on how businesses will perform in 2017. Over-valued businesses will be the norm instead of the exception and more will struggle to raise follow-on funding. If this happens expect even more staff turnover than normal and a switch from growth funding to revenue funding; more adverts and fewer free and discounted services, with a focus on unit economics. Having been largely dormant for a while now, mergers and acquisition activity could roar back into life over the next 12 months.

Driving value added services for voice and mobile

AFFILIATE MARKETING

Affiliate World Europe As the telemedia industry embraces affiliate marketing, we check out next month’s Affiliate World Europe (AWE) in Berlin and what to look out for When it comes to making money online for budding entrepreneurs, the opportunities are endless. Bloggers, freelancers, Youtubers & influencers show off their “digital nomad” lifestyle and boast about their freedom and wealth. However in terms of opportunities and fast money making potential, affiliate marketing stands head and shoulders above the rest - and the industry is booming. Thousands of individual affiliates are spending their own money to buy ad space and earning a hefty ROI promoting others’ products & services (some personally earning over $50,000 USD per DAY). With no customer service to handle, and freedom to promote what they want, when they want, affiliates can jump around the “hottest”

verticals as they please and make a killing in commissions in the process. While traditionally affiliate marketing has been limited to promoting apps, lead-generation, subscriptions and digital products, platforms like Shopify and Alibaba have also opened the floodgates for affiliates to jump into the big wide world of e-commerce too, bringing even more opportunities to the table.   There are many blogs & articles about how to get into affiliate marketing, the industry’s leading premium forum (stmforum.com) has expanded into the physical realm, bringing together their audience (who spend over $500m each year in advertising) for the world’s largest super affiliate conferences. Held twice a year (in Asia

and Europe), Affiliate World Conferences are an offline meeting point for online marketers, where the elite of the affiliate & performance marketing industry gathers. It’s a place to learn from leaders and network with the best minds around, and the next one is happening in just a few weeks! Affiliate World Europe is packed with a sold out market of 140+ exhibitors, 2000+ attendees over 60% of which are affiliates, and an incredible speaker line-up! Learn directly from the likes of Drew Eric Whitman (author of Ca$hvertising), Trey Lewellen (founder of Lumitact), Jason Akatiff (founder & CEO of A4D), as well as representatives from Facebook, STM Forum, Adsimilis and LayBag, just to name a few.

SPEAKERS

The diverse array of big-name speakers at AWE grows each

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year. According to the organisers, attending the keynote sessions will teach you how to: • Create a 50-million-dollar business by yourself • Find out why your prelanders scream “DON’T BUY!” – right under your nose • Hack into new industries you know nothing about • Remove blockers preventing you from scaling • Outsource intelligently to beat your competition • Learn all about flashlights

YES… FLASHLIGHTS.

The keynote speakers this year are all talented, proven professionals with numbers to back them up. They’re people you recognize – not just from the big blogs, but also from communities you know and trust. These are no-holds-barred talks. Directly relevant to what you do every day – not big-picture stuff that sounds

great but doesn’t hold weight. In short, you will make more money from your business if you listen and apply the lessons you learn from them.

KEY SPEAKERS INCLUDE:

Trey Lewellen: The mastermind behind Lumitact (the flashlight that sparked a Native Advertising wildfire), Trey Lewellen is a leading business coach and trailblazing entrepreneur. Get the whole story behind his famous flashlight – and what he expects to be the next big thing. Drew Eric Whitman: If AM was a class with a list of required textbooks, Drew Eric Whitman’s Ca$hvertising would be at the top of the list. The “DirectResponse Surgeon” is a master at fixing and designing brilliant, effective sales copy. Keep reading to find his own explanation of

what you’ll get from his speech. Hugh Hancock (aka Caurmen): STM’s “Guardian of the Guides” and founder of Machinima, Hugh Hancock is the master of explaining complex subjects in a way that isn’t just easy to understand, but is also actionable. His big-thinking speech will cover the other industries that AM is set to take over in coming years. Jason Akatiff: Founder and owner of A4D and Pixlwise, Jason Akatiff has been involved in numerous online marketing endeavors over the years. His experience starting, running and selling businesses makes his speech particularly appealing for anyone looking to become an independent entrepreneur in the modern world. Martin Eyking: As a world traveler and Founder/CEO of New

Media Services, Martin Eyking knows what it takes to build something from nothing. His staff now numbers over 1500 worldwide, but it all began with 3 people in a small Bangkok office. Find out how he grew his business with smart outsourcing and stable scaling. Steven Kuhn: Next to flashlights, portable relaxation devices are last on the list of “things that will go viral online” – unless you have Facebook advertising and consulting genius Steven Kuhn on your side. He’ll tell the story of LayBag and the key factors that drove its success.

VENUE: STATION BERLIN

People don’t typically complain about AWE, but we did pick up on a few choice comments about last year’s location. Participants felt the area (Alexander-

platz) and venue were not very representative of the affiliate world. This year it is different. Station Berlin. This 19th-century train station was recently converted into a massive events space, and it should be perfect for this growing conference. With multiple halls and a central location within the city (right by a train station – a working one, that is), it’s an excellent choice for the event. We can’t wait to check it out when it’s all lit up with AWE signs and booths!

FOR TICKETS AND INFORMATION, VISIT: AFFILIATEWORLDEUROPE.COM

www.callcom.ch

info@callcom.ch

Driving value added services for voice and mobile

MARKETING

Using micro-segmentation to cut through advertising fatigue Advertising overload is a real danger in the digital world. To combat it you need to target people with messaging that they may actually want. And that is where micro-segmentation comes in. MarieLouise Dalton, Marketing Director EMEA, Hitwise outlines what it means and how it can work Today, consumers are exposed to so many marketing messages that most online advertising campaigns struggle to stand out. We know that targeting small groups of consumers closest to purchase with personalised messages can be an effective way to combat disinterest and drive sales, but how can these groups be found amongst boundless combinations of individual needs? Although most marketers would consider demographic targeting too simplistic, targeting groups of people based on age, gender or household income can be worthwhile when used in the right circumstance. Demographic data can be used at a low cost, which comes in handy when the advert needs to broadcast a brand message to a large group. It also doesn’t require active engagement. However, exceptions, complexities and differences between individuals and larger groups are inevitably lost through this approach. For example, Hitwise has found that 32% of people who visit top beauty and cosmetic sites are men. Therefore, a beauty brand that markets only to women could be overlooking a

third of their audience. For large multipurpose retailers like Argos, the demographic approach doesn’t really work. Luke Kelland, digital trading manager at Argos, comments that no single customer base or demographic should be the single focus of the retailer, claiming instead that approaching customers at such broad strokes could mean they dissociate from the brand. For example, younger audiences looking for home furniture might be put off by an ad’s suggestion that they’re looking to buy a games console, even if their demographic data suggests otherwise.

SEGMENTATION AS A STEPPING STONE

By looking at personas which characterise audience and lifestyle, brands can edge closer to what the customer really wants. However, whilst bucketing groups based on demographic and lifestyle data like this once worked a charm, customers have now become used to being regarded as an exaggerated version of themselves. Instead of being tailored to types, as much as possible customers should be

exposed to personalised ads or merchandising that engages with what they’re looking for, based on patterns of consumption and online behaviour. As Kelland says, the product is a good place to start when setting up segments. By using first party-data from loyalty schemes that look at who’s actually buying rather than who you think is buying, it’s possible to sketch out your target audience and identify discrepancies with your current strategy. He pointed out that while the 18 to 25 female segment was the most likely to buy protein powder, no existing product was merchandised to this group, meaning they were able to fill this gap by launching an own-brand product.

FINDING THE SWEET SPOT

By far the most effective way to target a group is through microsegmentation. By using first party data along with third party data, granular clusters of individuals can be gathered from hundreds of data points. Information from customer-gathered surveys and memberships schemes inform the product mix, pricing and promotional strategy that the audi-

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ence is most likely to respond to. Overlayed third party data then lends validity to segments like lifestyle, attitudes, search data and buyer stage, making the data relevant to potentially thousands of micro-audiences. As no company can afford to launch tailored campaigns for every micro-segment in their audience, additional data points like geographical location can be used to determine relevance. Although more resource will be put into targeting a narrow micro-segment, if that targeted audience is five times as likely to purchase, then it’s worth doing. Ultimately micro-segmentation’s relevance boils down to the brand’s strategy, Kelland explained during the Internet Retailing Conference. For a company like Argos, driving awareness of an in-store sale could be easily achieved by targeting any UK demographic, while encouraging the sale of specific products within that sale would require a more focused approach. Micro-segmentation offers the retailer a means of cutting through the noise of irrelevant and ignored ads by serving relevant content to customers who are poised to act.

Direct operator billing in motion

The future of digital payments

The latest DIMOCO study finds that carrier billing is giving credit card a run for its money

The march of mobile payments

It’s not just carrier billing that is on the up in Europe, all m-payments are

Protecting m-pay customer data

The more they use it the more data they produce – and this is the biggest security headache of them all

PAYMENTS

European shoppers slowly embracing mobile forms of payments, Mastercard study shows While online banking and cards are still the most popular forms of payment EU consumers have expressed a strong interest in new payment methods such as e-wallets, banking apps, QR code scanning and digital currency. There is also a huge shift towards contactless payments – often seen s the pre-stage to a move to mobile payments. However, at the moment that interest is not translating into use, as is typical with new innovative technologies, it can often take time to be adopted by users. The important thing from an e-commerce and payment perspective is that the motivation is there and with so many different options for consumers, the practicality of shopping online becomes easier. So finds the Masterindex 2017, a new Mastercard report on e-commerce and payment trends across the continent. The report included a survey 43,000 consumers in 23 European markets and it suggests that one in four Europeans with access to the internet purchased products or

services online at least once a week in 2016. According to the wide-ranging study of ecommerce habits, for one in three European online shoppers cards and online banking are the most used form of online payment from mobiles. Just under a fifth use online banking apps and only two per cent use digital currency. Overall, interest in online banking apps (35%) is similar to e-wallets (35%) across Europe, pointing to potential for growth in these categories. In contrast, Europeans seem least open to digital currencies (11%) among all categories surveyed. Looking at the individual countries, Spain leads >> 12

PAYMENTS

VIVA Bahrain enhances Google Play Direct Carrier Billing with Bango Platform VIVA Bahrain has successfully enhanced its Direct Carrier Billing in Google Play and augmented its online customer payment experience using the Bango Platform. Originally launched in 2016 through a direct connection, VIVA Bahrain’s Direct Billing service unlocks the online world of content by allowing customers to enjoy the ease and security of making Google Play purchases

using their VIVA account. Award winning Bango Boost postlaunch technology will now be applied to the route, providing VIVA Bahrain customers with an effortless payment

experience. VIVA Bahrain is focused on providing customers with a superior service and growing the success of its app store carrier billing business. >> 12

Direct operator billing in motion

PAYMENTS

Tola Mobile launches mobile money with online Magazine Stand Tola Mobile is collaborating with Touchtechmedia to provide mobile payment processing for Touchtechmedia for their online digital magazine service www. buymymag.co.uk, an E-Money service. With a vast range of the best-selling British and International magazines to choose from, mobile users are able to purchase single issues and annual subscriptions via their device through a simple and secure payment process. The digital

magazine content is provided in collaboration with Zinio, the world’s first and largest digital newsstand. Tola.mobilepay is a frictionless payment method built for readers on mobile web and smartphone apps, and will initially be available exclusively for O2 customers. The greatest advantage for the publisher is that there is no need to collect any credit card details, as Tola.mobilepay allows readers to pay‐ to‐read via their mobile using the source of funds that they already have built‐in to their mobile

phone (monthly bill for post‐paid phones and stored credit for prepaid phones). The added value of paying by mobile is the real-time verification process. Security is provided at check-out with a one time 4 digit pin received

PAYMENTS

in an SMS to the customer’s mobile device. Shane Leahy, CEO of Tola Mobile, says: “We are very happy with the seamless integration of Tola.mobilepay and have been very impressed with Touchtechmedia’s ability to tailor their

platform with mobile money payments. It is an exciting time for us and we look forward to more integrations” Touchtechmedia Managing Director, Matthew Barbieri, adds: “The Tola Mobile Pay team have a very in-depth knowledge of mobile payments and have been very easy to engage with during the different integration phases. We look forward to working with Tola as we continue to enhance our mobile commerce product development and billing options available for our customers.

PAYMENTS

European embrace m-payments

VIVA Bahrain Google Play

<< 11 the way in interest in new technologies, with over half the people interested in e-wallets and 1 in 3 interested in contactless. However, only 14% of Spaniards use the technology, lagging behind Norwegians (20%), Greeks (20%) and Finns (19%). When we combine this interest in innovative payment methods with the fact that consumers don’t feel that skills or acceptance of paying online are big barriers we can see that the conditions for continue growth of e-commerce are there. It is up to the market to attract increased use and more consumers through offers, convenience and reliability. One of the most interesting emerging pay-

<< 11 With Bango post-launch technology, VIVA now benefits from access to industry-wide comparative analysis and peer benchmarking that gives a unique perspective on sales performance and ensures the best payment experience for customers. Bango Boost defines targeted actions the operator can take to eliminate payment friction and actively increase the number of paying customers in app stores. “We are constantly on the lookout for new ways to optimize our mobile services and ensure they’re paced with our customers’ growing online needs,” says Karim Tabbouche, Chief Commercial Officer of VIVA Bahrain. “We are excited to adopt Bango

ment trends is that of contactless payments. Whilst contactless is an in-store purchase method it is often seen as a step towards the use of mobile phones as payment devices. The Masterindex shows that 43% of the cards in Europe are contactless enabled, however there are wide discrepancies across countries. In Poland and Czech Repub-

lic, nearly 90% of the cards are contactless enabled. However in Germany 83% of cards are not contactless enabled and this number is 90% in Belgium. 7% of Europeans use contactless payments on a daily basis, 26% using it once a week and 38% once a month. However, nearly half of the population has never used it.

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technology which will allow us to build on the success of our existing app store carrier billing and provide our customers a frictionless payment experience.” Bango CEO, Ray Anderson adds: “Having launched more app store carrier billing routes than anyone else, Bango seamlessly upgraded Google Play DCB for VIVA Bahrain to the Bango Platform. Bango tools and technologies streamline the upgrade process, ensuring no service disruption during migration so there are no failed payments or lost users. We will now apply our technology to this route to grow the business for VIVA Bahrain, Google and the many developers selling to VIVA Bahrain customers.”

Exhibition, Seminars & Networking H10 Andalucia Plaza, Marbella 9 - 11 October 2017 DRIVING VALUE ADDED SERVICES AND MONETISING CONTENT Welcome

World Telemedia is the key destination for merchants, media and content owners who are looking to maximise the revenues they can generate from engagement, conversion and micropayments across all digital channels globally. The event is the only one in Europe to showcase how carrier billing can work in conjunction with engagement strategies such as affiliate marketing, social media, push messaging, OTT messaging and SMS to create a virtuous circle of services that can make content sticky, ‘buy-able’ and offer the payment tools to complete that transaction in one go. With the world becoming ever-more mobile-centric – and with mobile payments growing in tandem with mobile media and content consumption – World Telemedia is the place to talk to all players across the value chain (from network operators to aggregators to content owners to payment

Games Gambling companies to marketing and affiliate advertising networks) to turn what you have into a multi-national thriving business that reaches consumers wherever they may roam. So what are the key things that this diverse, value-chain led business will be looking at in Marbella in the October sunshine? We have talked to the industry and key sponsors and speakers and have found some interesting themes developing: some of them things you’d expect to be on the agenda and some that you might not. So, what have we got?

Billing

Digital payments are gaining ground around the world, with mobile payments a key area for expansion. Carrier billing

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has been long on promise in this new payments paradigm, but has not garnered the widespread use that many tipped it to achieve. In the UK it has been held back by regulatory concerns and perception issues, but elsewhere in Europe we aren’t seeing the uptake that many expected. Why? Cards are still a force to be contended with, is the simple answer. According to DIMOCO’s Future of digital payments report, two thirds of European adults own a credit or debit card and, combined with the growth in use of mobile wallets, is seeing them as a key way to pay for things online. PayPal has also targeted mobile with alacrity and together these forces are squeezing carrier billing. But the story doesn’t end there. Carrier billing for purely digital content is the most effective and rapid way for consumers to pay, and growing numbers of youngsters across Europe are open to using new ways to pay – especially since many of them don’t have credit cards. This is the opportunity for telemedia companies and is likely to dominate discussion and debate around the show in Marbella in October. How does the industry promote carrier billing to both consumers and, more pressingly, to potential industry sectors that can use it.

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This pre-show table top exhibition will enable around 50 companies to enjoy great visibility during this high-profile opening event. The “Meet Market” provides structured face-to-face networking that enables participants to quickly and easily engage with a wider range of suppliers than ever before – at a time when energy levels are at their highest. So don’t miss this fantastic opportunity to start sharing information about products and services, arrange future meetings and start doing business. 18:00 Piano Bar Open

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Exhibition, Seminars & Networking H10 Andalucia Plaza, Marbella 9 - 11 October 2017 BILLING TECHNOLOGIES THAT CONVERT ANYWHERE

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An unparalleled opportunity to meet a focused group of industry leaders, we continue to build on the success we’ve experienced from the show year on year. Warren Platt, CEO, MobileLife The “must do” event for anyone in the VAS ecosystem. Jeremy Flynn, Co-Founder, Empello This year’s main event for the mobile content and services industry. Sergey Bohuslavsky, Bus Dev Manager, Fbilling

skills to manage and deliver this – and to monetise it where necessary. But how do you monetise this viral content? This is one of the most vexatious issues around in media currently: creating video content is expensive and time consuming, yet the public’s thirst is for it to be free and shareable. So how do you monetise that sharing process and where it leads? I don’t pretend to have the answers, but developing spin-off business models can generate interactions that will be paid for, more content that will be paid for and more. This year’s world telemedia will delve into how to make this happen, with the great and the good of the industry discussing how to make this happen.

Chat Adult

Marketing and promotions

Marketing and promoting services – and marketing and promoting things around viral content for others – is, as we have seen above, becoming one of the key business drivers in the European telemedia sector. While many get to grips with affiliate marketing, we will be hearing from leading affiliate agencies about the process of

No other event brings together so many mobile content players, billing companies and now affiliate networks from across the globe. Gary Corbett, Chairman, Oxygen8 Group WT provides trends and insight into the VAS markets – that’s invaluable to our core business. Karen Ciulla, Sales Director, Kimia Solutions SL I met lots of potential partners and collected valuable information in the country updates. Julia Shtyrlina, Bus Dev Manager, MOBICO

getting it working and how to make sure that in that web of affiliates, things aren’t going wrong. Much as we have seen in the area of fraud and hijacking, ad traffic can also be hijacked and ads can be hijacked – so what can you do about it? At the show you will learn from the experts as to what is on offer and how to implement it. While affiliate marketing offers much – and is one of the key themes again at this year’s event – looking beyond that to other forms of promotion and marketing is going to be key. And one of the key topics is going to be how to make sure you stay on the right side of the regulators with all these processes across borders. As ever, Empello will be on hand to talk you through how markets work in all regions where you can operate and how to get yourselves up and running – not just with marketing but with all services – and will be as popular as ever.

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PAYMENTS

The future of digital payments DIMOCO and Juniper Research have published a report into the future of digital payments in Europe – and carrier billing’s role therein – and it make interesting reading. Here we take a look at the key findings

In 2015, the value of mobile and online physical, virtualised and digital goods sales in Europe passed the €500 billion mark for the first time, reaching €570 billion. Overwhelmingly, the momentum for growth comes from the mobile – smartphone and tablet – sphere with these devices becoming primary mechanisms for the access, payment and, for digital goods, delivery of services. Increasingly, transactional activity is migrating from in-store to online, while entertainment services, in particular, are transitioning from physical to digital; sales of CDs and DVDs are in decline as music and video are pro

gressively delivered as downloads or streams. This transformation of the way we consume and pay for goods and services has implications across the value chain – for consumers, merchants, brands and payment providers. It is taking place within a regulatory environment that is becoming more and more liberalised, creating competition and new opportunities at each stage in the retail lifecycle. In retail, the sales of online goods, both physical and digital, is no longer the preserve of the pure play online retailer. Indeed, a majority of mid-sized and large retailers are transitioning to a hybrid approach

to maximise their engagement opportunities with consumers. Meanwhile, as content migrates to digital, there is an attendant trend away from content ownership to content access; it is perceived as far more critical to be able to, say, listen to a song on multiple devices than to own it. It also means that, increasingly, the device on which you pay for the content may not be the device on which you primarily access that content. From a payments perspective, it is essential to offer consumers an array of mechanisms whereby transactions can be fulfilled and, with an online environment, that is geared toward the

device on which a given site is being browsed and payments are being made. As competition in the online space intensifies, merchants that fail to offer payment choice and an optimal payment experience face losing customers not only for the transaction in question, but also conceivably forever.

GETTING AWAY FROM CARDS

While credit and debit cards currently account for the vast majority of payments in European digital commerce, an array of alternative options have emerged which can both broaden the addressable base of paying users and increase the scale of average spend in

the online space. These range from eWallets – some of which, such as PayPal, do not require the user to enter card details – to carrier billing, which allows users to pay for goods and services via their mobile phone bill. Furthermore, the scaling up in digital commerce migration has created need to increase the speed and transparency of transactions. The implementation of SEPA, and the forthcoming introduction of SCT Inst (SEPA Instant Credit Transfer), should alleviate some of the challenges in this space, while also reducing the costs involved in crossborder payments. But consumers are increasingly keen to migrate spending to online channels. Historically, consumers were reluctant to enter card details online, but that fear barrier has been significantly eroded. Hence, there is a real opportunity for card providers to grow spend levels in the future. With more than two in three European adults owning credit and/ or debit cards, card payments are overwhelmingly the default payment mechanism on websites. However, carrier billing is something keenly watched by a new demographic. Prospects allow storefronts and content providers the opportunity to not merely facilitate payment by this demographic, but also develop more billable content targeted at them. Carrier billing is also Ideal for ad

Direct operator billing in motion

PAYMENTS

hoc, impulse purchases and recurring payments and it delivers high conversion rates for initial and repeat purchases and allows carriers to monetise content on multiple devices, including tablets, laptops and PCs, making it increasingly attractive as an alternative payment mechanism.

KEY DRIVERS FOR CARRIER BILLING

decision to download content, it can be facilitated by a simple one click (trans-) action. In this regard it is ideal for impulse purchases, particularly by individuals who have not preregistered a credit card. Indeed, carrier billing was a key revenue driver in the game Pokémon Go, where consumers who ran short of ‘ammunition’ (Poké Balls) could quickly and

tage of existing billing relationship with customers, which can be leveraged through the implementation of a DCB solution from a third party partner in two ways. Not only do they have the opportunity to monetise the hundreds of millions of mobile device owners excluded from digital content purchase due to lack of a credit/debit card, but operators can also

transactions per annum) and offer new opportunities for carriers and carrier billing providers. We are increasingly seeing carrier billing deployments monetising products and services beyond digital goods. In Germany, for example, TAFmobile and the Verkehrsverbund RheinSieg transport network introduced carrier billing for a four-trip ticket using the SWB easy.GO app.

The key drivers for carrier billing can be broadly summarised as follows: Formerly comprising more than a dozen significant players, the • Monetise New Demarketplace has seen substantial consolidation as market leaders mographics – There is seek to bolster their positions evidence of increasing smartphone adoption levels among teenage The market is also increase the extent to easily recharge their consolidating. A marketdemographics. As a which other consumsupplies by purchasing place formerly comprisresult, more content ers make purchases in-game currency via is being developed to ing more than a dozen by the provision of a one click billing. cater to that demosignificant players has simple, one-click bill• Subscription Opportugraphic, who are legalseen substantial consoliing process. nities – While carrier ly excluded from card dation as market leaders billing has thus far ownership in nearly all been primarily used to KEY OPPORTUNITIES seek to bolster their markets. As a result, Increasingly, Level 2 and positions. monetise content on the acquisition of paid 3 merchants are embracFor example, DIMOCO a pay-per-download content via credit card basis or for in app pur- ing carrier billing. Digital embarked on a series of billing is beyond them. content adoption on acquisitions in 2015 and chases, it also offers • Opportunity to Monmobile devices acceler2016, both to enhance potential to deliver etise Content Beyond ated dramatically in the its local capabilities in revenues on a subthe Mobile – One of selected national marscription basis. Under wake of Apple’s unveilthe clear advantages kets and to gain a presthis model, the phone ing of its App Store in of carrier billing is that number will be stored, mid-2008. Subsequently, ence in regions where it enables merchants allowing it to be used storefronts have been it did not offer services to offer an additional as a recurring payment the primary mechanism previously. Thus, it acbilling option across for content discovery option, without any quired the carrier billing a range of connected with Apple and Google need for subsequent and mobile messaging devices. Carrier dominating the market approvals, during the business of the Greek billing’s capacity to in this respect. subscription period. company Amaze in Febbill across devices, However, as the migra- ruary 2015, followed by • High Conversion Rates conceivably any con– When DCB is added tion to digital continues, French messaging and nected device, means as a content billing op- we now see an array billing company Mpulse that it stands up well tion, conversion rates of smaller merchants in June 2015. focusing on D2C (Direct in comparison to are markedly higher More recently, in May mechanisms such as for first-time users and to Consumer) sales via 2016, DIMOCO antheir websites. These in- nounced it purchased payment cards. even for repeat purclude merchants defined the Italian carrier billing • Optimal for Impulse chasers, making it a as both Level 2 (1 million company Onebip from Purchases – The beauparticularly attractive ty of the DCB (Direct option for merchants. to 6 million transactions its parent company NeoCarrier Billing) process • MNO Benefits – Oper- per annum) and Level mobile. In June 2016, is that, following the ators have the advan- 3 (20,000 to 1 million DIMOCO then acquired

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the payment division of Telekom New Media, a subsidiary of Magyar Telekom, to become the leading carrier billing aggregator in Hungary.

TAKEAWAYS

We are seeing greater deployments of carrier billing to monetise products and services beyond digital goods, with a number of deployments for eTicketing platforms. Revenues from digital content billed via carrier billing in Europe will increase sharply over the next five years from just under €3.5 billion in 2016 to more than €11.5 billion in 2021, an average annual increase over the forecast period of 27%. European credit/debit card spend on digital content will grow at an average annual rate of 7.9% over the forecast period, reaching €36 billion by 2021. The two largest wallets depend exclusively on stored credit and debit card credentials; Apple Pay and Android Pay will together account for nearly €3.8 billion in digital goods payments in the region by 2021, or 10.5% of all card transactions by value. The combination of SEPA implementation, allied to SCT Inst, should result in a significant reduction in the cost of international payments and in the settlement time for those payments. Download the full report at http://dimoco.eu/ white-paper-edition-3/

PAYMENTS

The march of mobile payments across Europe As consumers embrace contactless payments, mobile payments seems inevitable – but while European consumers are interested there are some things holding them back. Paul Skeldon takes a look at a panEuropean study that shows just where m-payments is at right now and what needs to happen to make it mainstream

a daily basis, 26% using it once a week and 38% once a month. However, nearly half of the population has never used it. The study goes on the find that the British are the most avid online shoppers in Europe. While uptake of e-commerce is high across Europe, the research reveals interesting differences from country to country in terms of how often people shop online, what types of things they purchase, and their preferred payment methods. At a time when European policy makers are looking

the internet at least once a week. Across Europe there is a significant increase in activity when comparing daily to weekly frequency. Across Europe consumers shoppers cards and online feel that skills or accepThis is because the types are showing a strong inter- banking are the most used tance of paying online are of things people buy est in new payment meth- form of online payment big barriers we can see that online are less likely to be ods such as e-wallets, from mobiles. Just under the conditions for continue everyday items. Clothing banking apps, QR code a fifth use online banking growth of e-commerce and footwear is by far the scanning and digital curapps and only two per are there. It is up to the most popular category rency and there is a huge cent use digital currency. market to attract increased overall (48% European avshift towards contactless Overall, interest in onuse and more consumers erage) followed by tickets payments – often seen as line banking apps (35%) is through offers, conve(34%), electronics (33%) the pre-stage to a move to similar to e-wallets (35%) nience and reliability. and books (31%). mobile payments – going across Europe, pointing One of the most interestBrits who shop online on. Shoppers want mobile to potential for growth ing emerging payment (33%) are twice as likely to payments. in these categories. In trends is that of contactless buy their groceries on the So finds the Mascontrast, Europeans payments. Whilst contactinternet as their nearest terindex 2017, a new continental neighbours in Mastercard report on the Netherlands (16%), e-commerce and payFrance (15%) and Belgium ment trends across the (13%). Attitudes also vary continent. The report on preferred methods included a survey 43,000 of buying online. In the consumers in 23 European Czech Republic, Germany, markets and it suggests Netherlands and Poland that one in four Europeans online banking is twice as with access to the internet popular as cards. But in purchased products or countries UK and Ireland, services online at least cards remain the most once a week in 2016. popular payment methods However, at the moseem least open to digital less is an in-store purchase to break down barriers to by some distance. ment that interest is not currencies (11%) among method it is often seen as cross-border e-commerce, Despite different trends translating into use, as is all categories surveyed. the Masterindex highlights from country to country, a step towards the use of typical with new innovaLooking at the individual mobile phones as payment different national attipeople across Europe tive technologies, it can tudes to buying from sites tend to share similar countries, Spain leads devices. The Masterindex often take time to be the way in interest in in other countries. shows that 43% of the concerns about online adopted by users. The UK internet users come shopping. Fear of fraud is new technologies, with cards in Europe are conimportant thing from an over half the people tactless enabled, however out as the most regular us- the number one reason e-commerce and payment interested in e-wallets ers of e-commerce in Euthere are wide discrepanfor not buying online in all perspective is that the and 1 in 3 interested in rope overall. 8% of the UK countries surveyed. cies across countries. In motivation is there and contactless. However, only Poland and Czech Republic, population shops online Among the key factors with so many different op- 14% of Spaniards use the every day, and 41% shop nearly 90% of the cards to delivering on growth, tions for consumers, the online every week. This is both cross-border and technology, lagging behind are contactless enabled. practicality of shopping Norwegians (20%), Greeks However in Germany 83% the highest in Europe, fol- domestically, appear to be online becomes easier. (20%) and Finns (19%). of cards are not contactless lowed by 32% in Ireland. continued efforts to build According to the wideWhen we combine this enabled and this number is In contrast, Finns (17%), trust and confidence in eranging study of ecominterest in innovative pay- 90% in Belgium. Estonians (16%) and commerce, and, critically, merce habits, for one in ment methods with the Danes (16%) are far less 7% of Europeans use ever improving online three European online fact that consumers don’t likely to buy something on offers and conditions. contactless payments on

Direct operator billing in motion

PAYMENTS

Protecting customer information in the m-payments world

THE IMPORTANCE OF ENCRYPTION

As with any new technology, new processes will create new security vulnerabilities and possible attack vectors. The theft and misuse of payment data has the potential to The move to mobile payments offers unparalleled convenience for very quickly kill off any emerging mobile payment merchants and consumers. But it also comes with increasing security methods. risks. So what can be done? Jose Diaz, director of payment strategy, That said, John Pironti, Thales e-Security explains risk advisor for ISACA, suggested this fear shouldn’t necessarily slow down the adoption of mobile payments, “as long as risk is properly managed, and effective and appropriate security features are in place.” However, by not implementing appropriately robust security measures, payment security providers put their retail customers at risk of cybercrime and data breaches – both of which can also have a negative effect on brand loyalty. It’s important, therefore, that retailers recognise the ers revealed that more It’s been almost two years the wrong hands. importance of encryption than two thirds of shopsince cashless payments in digital payments. Payment service pers worry about making overtook the use of notes providers, banks and Strong encryption, purchases using contactand coins in the UK, and underpinned by hardware retailers are, therefore, less technology; the theft security modules (HSMs), that alternative payments, under growing pressure of personal financial data such as eWallets, and bank to provide underlying has been proven time being their primary fear. transfers, overtook card and time again to be the security measures while, payments globally in the most preferred means of at the same time, ensuring What’s more, two in five UK consumers said they eCommerce space. With securing payments. HSMs customers face as few felt more at risk when pay- are able to provide organmobile solutions such barriers as possible to a ing for items and services isations offering mobile as Apple Pay promising satisfying, friction-free on their smartphone than payments with the trust to revolutionise the way purchasing experience. they did a year ago. we pay when making anchor needed to ensure So, while lip service is purchases, it can’t be long A CULTURE OF FEAR the highest standards of certainly being paid to the data protection and manuntil we find ourselves Gartner predicted a 35% uptake of mobile payin a completely cashless rise in the volume of agement of cryptographic ments, these fears mean society. global mobile transackeys, while complying with that actual uptake of the Alongside the adoptions between 2012 and best practices and the lattechnology has been tion of digital payments, 2017, with almost half of est pertinent regulations. somewhat slow. In the a significant rise in data all digital commerce in With mobile payments breaches and cyber-atthe US and 38% in the UK US, for example, only 12% in particular, this trust tacks has led consumers to likely to be made through of consumers said they relies on a mixture of a sebe fearful that their most a mobile device by 2020. planned to use mobile cure registration process, a wallet technology within valuable financial and perHowever, a recent sursecure delivery of credensonal data might fall into vey of UK and US consum- the next six months. tials to the user’s phone,

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and ensuring that the regular replenishment of keys in the phone is always protected. Conversely, on a plastic debit or credit card, the information that needs to be secured is static, and the same keys remain on the card for its entire lifetime. It’s essential for payment application providers and retailers to recognise differences such as these if innovative new methods such as mobile payments are to succeed. The challenge now is to ensure that any security measures in place address multiple mobile payment solutions in order to guarantee that they cover all the types of payment methods used by a retailer’s customers. Taking time to acknowledge the fact that each solution will have its own unique security threats, and then creating an appropriate risk management approach to address these, is the ideal starting point for retailers hoping to prevent any security concerns in the future. Mobile payments are growing in popularity but, if they are to become mainstream, payment application providers and retailers need to take action now to ensure that their customers’ data is protected from those with malicious intent. They must work with banks and payment services providers to ensure that robust encryption, supported by HSMs, is in place, to protect payment data from the moment of capture, safeguarding their customers’ information, and keeping the bad guys at bay.

PAYMENTS

What’s driving mobile payments? The European mobile payments market will almost triple over the next five years, vaulting from €52 billion at the end of 2015 to €148 billion by 2021. So who are the main players and what does the C2M community need to know? Paul Skeldon reports

According to the latest report from Forrester, increasing consumer awareness and growing retailer interest in mobile payments provide a positive backdrop for mobile payment growth. Growth will come from mobile in-person payments and from mobile remote billing and payments, such as purchasing via an app when the consumer isn’t physically present with the seller, says the study. Mobile in-person payments will grow the fastest, increasing almost fivefold between 2016 and 2021, from €4.6 billion in 2016 to €22.8 billion in 2021; they will account for nearly 16% of all mobile payments in the EU-7. The launch of European mobile payment platforms, such as BNP Paribas’ Wa! in France and PayPal’s col

laboration with Vodafone Wallet to enable in-person payments in Italy, as well as the market entry of technology giants like Apple, Google, and Samsung have led to greater consumer awareness of and opportunities for mobile in-person payments. The wide availability and uptake of contactless payments across Europe mean consumers are ready to adopt mobile payment, although their payment habits remain a hurdle to overcome. The rapid compound annual growth rate (CAGR) of 38% through 2021 reflects the higher transaction values that are possible with mobile in-person payments — device-based authorization, such as entering a pass code or using Apple’s TouchID, allows users to bypass contact-

less transaction limits. For devices without this capability, the increase in contactless transaction limits will still drive growth, as mobile in-person payments can now be used for higher basket values. Forrester also expects mobile remote payments to remain the largest mobile payment segment by some margin. They accounted for nearly threequarters of mobile payments at the end of 2016 and will still account for two-thirds of mobile payments at the end of 2021. Mobile remote payments will grow at a healthy CAGR of 20% during the forecast period of 2016 to 2021. Why? Mobile remote payments provide real utility for retailers and customers. In-app payment buttons and online checkout buttons enable easy purchas-

ing, without the need to enter payment details or delivery and billing options. As a result, retailers are seeing the benefits of increased checkout conversions and are integrating more payment options into their apps and mobilefriendly websites. Retailers are also offering more features like Starbucks’ “Order Ahead,” which allows users to bypass queues, or consumer-friendly services like click-and-collect. This blurring of online and offline retail is ideally suited to mobile devices, and we see an increasing number of people using their smartphones for online shopping. The EU’s second Payment Services Directive will enable retailers to offer customers direct-credit payment options, and we expect this to drive some growth in mobile remote payments as a result. The other sector where growth will come is peerto-peer payments. Domestic P2P payments/informal lending and cross-border P2P payments made up nearly 15% of total mobile payments in 2016. Forrester expects P2P payments to remain popular, to retain a steady market share, and to account for 17% of all mobile payments in 2021.

Domestic P2P payments/ informal lending will see a CAGR of 27% .This segment’s market share will remain steady, with apps like Swish in Sweden enabling consumers to transfer money to each other instantaneously as well as offering useful features like bill splitting. 2016 saw the expansion of the Jiffy P2P payments solution in Italy, with 23 banks now using the service.6 In the UK, P2P solutions like PayM, Barclays’ Pingit, and Zapp are yet to make it in to the mainstream, partly because these solutions offer little incremental utility over existing faster payment bank transfer methods. Cross-border P2P payments will have a CAGR of 28%. Banks and established money transfer agents still conduct most cross-border fund transfers. However, digital disruptors like TransferWise are making inroads and can offer cheaper, reliable money transfer services to consumers and small businesses.7 Money transfer disruptors offer greater convenience than the existing methods as well as a cheaper alternative to banks, and Forrester believes that P2P currency exchange firms represent a small but serious threat to incumbent firms.

Direct operator billing in motion

TELECOMS

Handling consumer issues with telemedia services could be about to get a whole lot easier with the launch of a third-party consumer care handling service. And it could also make the whole way PRS is policed and used much easier. Paul Skeldon reports

Care in the community One of the biggest drags on the growth of charge to mobile services has always been complaints. Compared to the volume of revenue they generate, the complaints levels have been high. This has damaged the perception of these services over the years and has been a constant reputational issue for everyone in the value chain. Over the year’s it has been mooted that one way around this intractable problem has been for a third-party customer service unit to be formed to handle these complaints, to give consumers a single point of contact and to take the pressure off service providers, operators and others in the value chain who typically get irate customers on the line. It also, so the theory went, would perhaps redirect customer ire away from the regulators and generally make PRS a happier place for customers and businesses to operate. The stakes are high, PRS is worth some £675million a year

and are used by more than 40% of the population over age 11. But the regulator, the PSA in the UK, receives around 30,000 complaints each year, mostly attributed to “unexpected charges” appearing on bills. But now help is at hand. Building on years of experience in the telemedia industry and experience of handling customer care, compliance and digital community management, The Consumer Care Service (COCASE) – part of the Cute Media Group – has been formed to help both the industry and consumers get the most out of PRS and to help the industry grow. “We don’t operate any PRS services ourselves so we can be totally independent and neutral, which allows us to defend the consumer’s rights as well as acting in the best interests of the service providers,” explains COCASE CEO Andrew Fisher. “We are experienced at interpreting when a refund is rightfully due and when it isn’t andhave earnedthe trust of our

clients to execute those refunds quickly, which again helps to defuse anger and protect reputations.” This need for speed and efficient communication is a key part of what COCASE brings to the thorny issue of PRS complaints. Until now, customers who experience problems often don’t know where to turn and call anyone from the publisher who ran the ad they first saw the service in, to the service provider, to the network operator or the regulator. Often they would be passed around, resentment and anger building, so that complaints easily escalate. “COCASE runs native English speaking agents from its Brighton HQ, around the UK, the US, Australia and parts of mainland Europe to handle complaints 24x7,” says Fisher. “We follow the sun and allow consumers to call up when they detect a problem and want to deal with it.” This ability to handle things

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quickly, knowledgeably and efficiently are key drivers for setting up a third party contact and complaint handling service.

HOW DO THEY DO THAT?

The company has already handled more than a million support cases over the years and through that experience it has consolidated all that knowledge to create COCASE. The company has also created the Xaps platform, a proprietary, bespoke technology suite, which is cloud based and uses state of the art call queueing and routing tech, bespoke IVR, automated opt outs and reporting. In addition, the company will analyse calls and complaints to form a feedback loop that, in theory, will let the company not only resolve these issues, but help service providers constantly update services so to remove pain points and make the industry much more effective at being entertaining. “It creates a virtuous circle,”

says Fisher. “By enhancing customer experience, you increase customer happiness, this reduces complaints and escalations, which improves the commercial environment, which creates and better customer experience – and things should just get better and better.” And the industry has welcomed the move. Kevin Dawson from Oxygen 8 told us that: “Any positive steps to manage consumer issues are very useful and show an industry making its own efforts to survive, build and grow.” Rob Weisz, CEO of Fonix echoes this: “Anything that will provide consumers with a faster, more efficient and knowledgeable response from call centre agents to support a mobile billing enquiry is only a good thing and something that I think the whole market would welcome. As an industry we must strive to improve the awareness and experience of mobile operator billing and having dedicated expertise in consumer care is a good thing.” UK telemedia industry body AIME also welcomes the move. “For a lot of our members, who run relatively small businesses, a professional outsourced customer care facility, frees up

People who need people Customer service is becoming a booming sector for the telemedia industry. Providing people to handle complaints and customer service issue – as well as providing some of the services at the more adult end of the market – has become a bespoke business. The rise of chatbots across the whole of ecommerce may put that under threat, but when it comes to handling customer services, or indeed offering more adult services, you can’t beat the human touch. That is why companies such as Text 121 is thriving. “Chatbots are rubbish,” says the company’s co-founder Helen Simpson. “There’s no feeling in a chatbot and, more importantly, a chatbot can’t understand how a person it is chatting to feels. This is especially important when it comes to customer services as you need to understand how angry some one is and how to talk them down. A chatbot also can’t assess accurately, through that anger, what the person may or may not have done.” This is where people come in, says Simpson. Sometimes people genuinely have clicked on something and not understood and are cross but soon can be placated. Others are so angry and rude that you need to just refund them. The bulk, however, can be persuaded that the know what they are doing and are happy to continue with the service. “This is the art of the customer service agents we train and provide,” she says. “We don’t build platforms or create technology, we just provide the people – people with the right skills to do the job perfectly.” And this is important in the chat business and increasingly it is becoming a core skill for the new lease of life that telemedia customer services is seeing. “If you have the traffic we have the people to service that traffic really well,” says Simpson. valuable internal resource for innovation, product development and marketing and can aid the lifeblood of the organisation,” says AIME MD Rory Maguire. “By recruiting a specialist customer care organisation, digital merchants and potentially broadcasters and charities can ensure that their customers, who wish to query the charge or the product are handled professionally and

courteously.” According to Maguire, a small percentage of consumers who engage with services across the internet, vote on TV or radio or make a charitable donation and commit the charge to their phone bill often forget the transaction – despite text based receipts – by the time their bill arrives and cannot relate the billing information to anything they have done. This small

number of consumers make billing enquiry calls to their telecoms provider who will then direct them to the merchant. In a majority of cases, the consumer will recall the transaction once it is detailed but may not be happy about the need for a call redirect. The consumer needs to communicate with highly trained call handlers to manage the enquiry through to satisfactory conclusion and prevent its escalation to a complaint. “Outsourcing also reduces the number of customer care numbers that network operators have to hold in their databases which will reduce the number of incorrectly redirected calls,” he says. “AIME’s Consumer Journey Working Group has created initiatives to ensure correct call handling by network operators for their customers who have committed third party charges to the phone bill and professional support at the merchant end of the spectrum. A ‘single number’ solution is one of the initiatives under discussion.”

Making interactive communications pay

CUSTOMER SERVICE

The robots are coming Customer contact is the bread and butter of the telemedia industry – but technology is reshaping how it looks. Paul Skeldon takes a look at the rise of artificial intelligence tech and what it means for customer service For those organisations that still see Artificial Intelligence (AI) as an emerging technology that they probably don’t have to start thinking about yet, here is a wake-up call: AI is here already and busy powering many of the best practice customer journeys. Deployed correctly, AI technologies are available to support all aspects of the customer journey, from understanding customers and simplifying processes through to eliminating bad demand and freeing agents to respond to customers directly. “Given all the inevitable hype around AI – particularly around the rise in robotics and jobs destruction – it’s hardly surprising that for many businesses there’s still some caution,” says Daniel Whaley, Principal Solutions Manager for Digital at Sabio. “However, rather than seeing AI as a potential threat to activities, organisations need to recognise the potential power of AI in supporting all aspects of customer engagement.” In fact, analyst firm Gartner has already predicted that by 2020 some 85% of customer touch points will be offered without human assistance, however 2020 really isn’t that far away and we’re finding that a growing number of organisations are keen to find out how they can take advantage of AI and machine learning within their own operations. So what tech is out there and how can you leverage it?

7 KEY AI TECHNOLOGIES THAT CAN DELIVER CUSTOMER ENGAGEMENT BENEFITS To help businesses take advantage of the opportunities

enabled by AI, Sabio has identified ‘7 key AI technologies that can deliver customer engagement benefits today’. Predictive Intelligence Technology – Allows organisations to take advantage of machine intelligence to improve the customer experience. This is achieved by bridging the gap between digital channels and contact centres and providing contact centre agents with immediate insight into a caller’s related website activity both before and during calls. Virtual Assistant Solutions – With analyst firm Gartner predicting that the number of customer interactions handled by a virtual assistant is set to grow 10x over the next three years, there’s clearly going to be increased demand for conversational virtual assistants. This technology can optimise the experience offered based on where customers are in their journey and their individual preferences. Conversational Commerce Technology - With continued im-

provements in natural language understanding, voice control is on its way to becoming ubiquitous, particularly as research suggests that customers prefer automated interactions where they can speak directly to an AI-enabled assistant or a chatbot. However, for successful conversational experiences, organisations also need to have access to the right IVR, natural language, UX and customer journey design skills. Human-Assisted Service – AIenabled customer service needs to work both ways: recognising both when a human agent is needed to help the customer, and also when an agent might benefit from some additional support. Understanding where and when this is necessary, and successfully managing the handoffs between AI and human service will prove increasingly critical. Speech Analytics - The latest speech analytics solutions take advantage of real-time analysis

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and machine learning to deliver contextual guidance. This has the potential to alter the outcome of interactions while a caller is still on the line. Cognitive Artificial Intelligence – By applying the Big Data captured in millions of customer conversations, organisations can use machine learning techniques to look beyond their most common engagement scenarios to leverage the more complex ‘long tail’ contact reasons that until now have been too difficult to automate. Voice Biometrics – Biometrics technology has been using neural nets for a long time to provide organisations with a more natural, effortless way of authenticating customers securely by allowing them to use their voice as their password. New facial recognition technology is also now being paired with voice biometrics to broaden the scope of AI-enabled authentication solutions

Carrier billing and marketing are the key themes in telemedia this issue and we have some great stats from out there. First off, DIMOCO has delved into the opportunities and challenges for carrier billing in Europe. As you can see on the left, carrier billing is set for enormous growth between now and 2021 across the continent, driven by all sectors and topping out at €11bn. But it is going to face competition from credit and debit cards (top right), which still hold sway online – a market worth €700bn overall by 2021 (bottom right). Across the bottom we have data from the IAB showing, left, the overall growth in the online marketing world and, bottom right, where the growth is coming from in mobile advertising.

Number cruncher EUROPEAN DIGITAL CONTENT REVENUES MONETISED THROUGH CARRIER BILLING (€M), BY CONTENT TYPE, 2016 & 2021

EUROPEAN DIGITAL CONTENT REVENUES MONETISED THROUGH CREDIT OR DEBIT CARDS (€M), BY CONTENT TYPE, 2016 & 2021

EUROPEAN DIGITAL CONTENT REVENUES MONETISED THROUGH CARRIER BILLING BY CONTENT TYPE, 2016 & 2021 (€M)

EUROPEAN ECOMMERCE MARKET (€M), 2016 & 2021

MOBILE DRIVES DIGITAL AD SPEND PAST £10 BILLION THRESHOLD

ANNUAL GROWTH OF KEY DIGITAL AD FORMATS

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