Telemedia Magazine Issue 31

issue 31

Connecting consumers to media, content and billing

tell

Why m-adult is here to stay Kiss and sell

The secrets of m-marketing

Kiss and connect

What's hot in interactive media

Kiss the sky

Exploiting telemedia's internationalisation previews of: mADULT SUMMIT Mobile Revenues & Strategies for Adult Content & Applications

PLUS Print media beyond the app > New tech fraud > Second screening > M-wallets > m-commerce

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features Big bang theory and practice

As the digital world enlarges, so the real world becomes smaller, offering telemedia players new opportunities – but with this borderless utopia comes increased competition and companies prepared to push the boundaries – often to the industry’s detriment. Matthew Leach reports

Hacking, jacking and attacking

While premium rate scams may increasingly be a thing of the past thanks to better regulation, the new world of apps and smart connected devices is opening up a new front for the war between scams and consumers. Paul Skeldon reports

The future of PRS?

PRS has moved on since the days of it being seen as ‘third party services’ by mobile operators – it now sits at the heart of media interaction. But getting the right tools for the content is an increasingly complex task.

Graham Halling, digital business director at Spoke, offers some guidance

Beyond the app

Most print media companies have embraced the app as a way of serving up content to a new, digital-savvy audience. But the digital world is constantly shifting and if any of those companies had any thought of resting on their app-shaped laurels, they are in for a rude awakening. Matthew Leach reports

Second screening

Everyone is watching TV while fiddling about with a smartphone but how can media companies, advertisers and the telemedia industry tap into the second screen phenomenon and make some money?

Nick Moreno, head of market intelligence, Red Bee Media offers his analysis

Get smart, get connected

While second screening is the trop du jour in media circles, web-connected TV – and the apps that can be built on them – looks set to usher in a new wave of interactivity around both TV and the web. Paul Skeldon takes a look

All grown up

The adult industry, once a sure-fire money maker, is feeling the pinch online, but as tastes and attitudes change, mobile adult is finally starting to gain ground and make some money for both the telemedia industry and the adult content provides. Paul Skeldon reports

50 shades of mobile adult

Julia Dimambro, founder and CEO of Cherry Media argues that understanding the 50 Shades of Grey phenomenon is the key to understanding how mobile adult services are going to make money as women take control

A match made in heaven…

… or mortal enemies? Matthew Leach looks at how social media has changed the chat and dating landscape and what it means for the adult telemedia business

On message

Mobile advertising is finally starting to gain some traction with consumers, with many people preferring it as a text or MMS message than anything else… and location is proving to be key. Paul Skeldon reports

Marketing on the move

Everyone wants a piece of the m-commerce pie, but the real key to it is affiliate mobile marketing. Here Timo Ronkainen, global head of mobile, Tradedoubler lays out his four point plan for making it work

Leading the way in European m-marketing?

Mobile advertising is booming in Germany, with innovative new ways to tap into a very mobilized consumer base – and it is driving m-commerce. Talya Shoup Burnett reports

The value is not the money

With operators, banks and even Google launching mobile wallets, how are we going to get consumers using them? Jon Worley, director of business development – customer interaction, The Logic Group believes the answer lies not in the money that is in them, but in integration with loyalty programmes

The integration game

Ron Curry, UK business unit head – retail, travel and hospitality, consumer goods at Cognizant Technology Solutions, says retailers are right to embrace the new opportunities that mobile technology offers, but believes integration is key

regulars 04 Comment Telemedia needs to think and act globally

Social 06 Opinion: Facebook to launch VoIP and

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why no one trusts its adverts

Opinion: M-Commerce

How mobile disrupts linear commerce

Payments 07 Opinion: 80% of consumers get contactless

Payments 08 Opinion: The latest news of Payforit4 08 Opinion: Advertising Location-based ads get going

Agenda 10 What the industry’s regulators and trade bodies have been up to

43 Directory The industry’s only listings of who does what

46 Keeping tabs on the movers and People shakers

SHOW PREVIEWS World Telemedia Marbella M-Adult Summit 2012 telemedia issue 31

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COMMENT

paul skeldon

he introduction by PhonePayPlus in the UK of a mandatory registration scheme across the whole value chain of PRS providers has had some interesting upshots. Not only has it made the system more fair for most of those involved in the industry, as well as protecting consumers to a new an unparalleled degree, but it has also thrown up some very interesting stats about the use of PRS and the location of PRS services.

Of the 4000 companies that registered as providers with PPP, 14% have their HQs located overseas, based in 75 countries, including Australia, Russia, China, India, Nigeria, Argentina, Spain, Germany and the USA. The attractiveness of the UK PRS market for international providers and investment is underlined by research published in 2011 by PhonepayPlus that shows while the average global PRS revenue per capita (based on 20 bench-marked countries) was US$4.57, in the UK it is US$18.70.

In addition, PhonepayPlus’s annual market review, Current & Future Market for PRS 2011, shows that some providers are capitalising on the ‘borderless’ reach of global sites, such as Facebook, by facilitating mobile payments across a range of international markets. In addition, many UK mobile aggregators are now part of international consortia.

And this is, in part, why this year’s WORLD TELEMEDIA event is being held in Marbella to not only showcase the international nature of the industry, but also to tap into the growing level of PRS expertise being run out of the Oligarch’s Playground – not to mention the rest of Europe.

Like the show, this issue of Telemedia magazine is also looking at the international market for PRS services and their impact on everything from m-commerce to regulation to the some of the new frauds that are being perpetrated thanks to an increasingly digitally connected and international user base.

And these are vitally important issues. While the ‘traditional’ PRS services of chat, dating, psychic, horoscope and so on are all doing OK – albeit in a somewhat plateaued graph – the new money is certainly in exploiting the burgeoning world of apps, m-commerce and digital media. And, to paraphrase the old Yorkshire adage, where there’s brass, there’s muck.

The world of apps and mobile downloads – not to mention social media – has brought with it not only a raft of new ways to connect consumers with content, services, goods and billing, but also new ways for old scams to be perpetrated.

These are detailed in our features in this month’s magazine – and will be tackled too in the sessions at WORLD TELEMEDIA MARBELLA (17-19 October), along with how regulators need to look internationally and digitally simultaneously to really nip a while new breed of consumer harm in the bud.

And there is everything to play for. These services are no longer on the edge of consumer markets, but are deeply entrenched in Joe Public’s everyday digital life – and they are, today, the stuff of big brands. Scams and problems that dent consumer confidence in this broad spectrum of digital commerce are going to have dire consequences all round.

So join the debate and book your place at WORLD TELEMEDIA MARBELLA to learn about new services, new ways to make money – and how to make sure the business is sustainable.

Make sure you renew your annual subscription to continue receiving Telemedia Magazine AND now you will get 10 issues of Telemedia-month into the bargain! www.telemedia-news.com/signup.html

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the small print

Think global… act global

Directeur de la rédaction Paul Skeldon paul@telemediamagazine.com Art Director Victoria Wren victoria@whangdoodleland.com Contributors & Consultants Matthew Leach, Aideen Shortt, Sheldon Johns, Andrew Darling, Peggy Ann Salz, Ritesh Gupta, Paul Dunone, Bruce Pharoah, Christabel Farrah, John Strand, Melvin de Vere, Victoria Hawes, Peter Welburn Sales & Marketing info@telemediamagazine.com Production Director Annika Micheli annika@telemediamagazine.com Publisher Jarvis Todd jarvis@telemediamagazine.com To subscribe www.telemediamagazine.com

What we’ve been listening to Yin & Yang, Love & Rockets Fairytale of Mongolia, Splodgenessabounds What we’ve been amused by Hunderby What we’ve been following The Olympics/Para-olympics What we’ve been reading about David Bowie What we’ve been cooking thecreativecaveman.com

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ANALYSIS

The future of everything? Facebook could add up to $800 million to its revenue by launching a Skype copy, reckons John Strand. By doing so, will Facebook disrupt the mobile industry even more?

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users. With 124 million active users, Skype made less revenue than the annual operating profit of many mobile operators. It is worth noting that an operator with 124 million subscribers would make many billions of dollars, but Skype made less than $1 billion.

Such is the nature of disruptive technology.

Technologies such as VoIP offer global connectivity at a fraction of the cost that operators offer for the same voice coverage today. Operators’ higher price reflects their ongoing multibillion dollar investment in global digital infrastructure, without which Skype could not exist.

Skype, and Facebook for that matter, do not invest in infrastructure, but they are over the top (OTT) technology platforms that rely on the provision of digital infrastructure. They are essentially free riders on the network that competes with mobile operators for communication services.

To be sure, Skype’s revenue is nothing to sneeze at, especially for an internet company struggling to show a profit on advertising revenue. Facebook is scrambling to please investors, and $300 million-$800 million from VoIP would be welcome on the income statement.

The question is not whether Facebook will enter the VoIP market, but rather will Facebook succeed where Google and Microsoft have failed. Indeed Facebook has more likelihood than any platform to be the Skype killer. Facebook is close to crossing the 1 billion mark with users, and half of them use their mobile phone to connect to the platform. For many users, Facebook is already the place to communicate with friends and family, so VoIP would be a welcome addition.

And unlike Skype, Facebook provides a ready phone book from the begin-

ning. Indeed, with pictures, video, news and the other features of its social network, Facebook offers a richer experience than any of its competitors.

It is not a stretch to suggest that Facebook could at least match Skype’s revenues. The premium model of Skype has proved more profitable per user than Facebook’s advertising model. Skype’s paying users spend an average of approximately $100 per year on Skype Out and other services. Facebook’s advertiser revenue when apportioned for users in the Europe and North America (where it gets almost all of its advertising) is less than $10/user. Facebook already has the payment and collection facility developed for its multiplayer games, so it would be no problem to charge individual users for VoIP services Our analysis shows that Facebook could have a remarkable potential in the area of VoIP. It could create a communication experience far richer than what is available today. If Skype is a black and white film, then Facebook’s VoIP would be a 3-D interactive movie. Operators have already absorbed the impact of Skype, but Facebook is another story.

Facebook has already proven a clear and present danger to SMS revenue. VoIP is the next logical step and perhaps an MVNO thereafter. With each step, Facebook encroaches on operators’ cash cow: voice. And operators move ever closer to the dumb pipe destiny. There is no doubt that Facebook is a ticking time bomb under the mobile operators’ business model.

In Facebook we trust? 44% of consumers claim they would never click on Facebook sponsored ads – yet brands are buying into it with gusto: what’s the skinny?

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global survey undertaken by independent digital marketing agency, Greenlight, reveals 30% of people ‘strongly distrust’ Facebook with their personal data whilst 44% say they would ‘never’ click on Facebook sponsored ads, all of which indicates Facebook’s advertising programme has an upward struggle.

Greenlight’s global “Search & Social Survey (20112012)” asked 500 people how they engage with online advertising, search engines, and social networks, in order to glean insight into how consumers engage with marketers today, and to formulate views on what the future might hold.

As expected, 50% of respondents to Greenlight’s survey said they use Facebook for social engagement,

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sharing photos, and catching up with friends and family.

Yet, does this reflect an advertiser’s point of view?

“For Greenlight and many other agencies and brands, advertising on Facebook has become part of the ‘usual mix’, says Hannah Kimuyu, director of paid media at Greenlight. We specifically saw our Facebook investment (client media spend) overtake both Yahoo and Bing collectively at the start of 2011, hinting the channel has constant growth and is delivering a strong enough return to invest more.”

Kimuyu points out that similarly to Google’s Display Network (GDN), Facebook has spent the last 12 months developing its advertising programme, slowly moving from offering just branded advertis-

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acebook has a vision that its platform will evolve into augmented reality and become completely integrated into the user’s life, embedded not just on every screen – TV, PC, mobile and tablet – but in every product and location. Adding VoIP capability is next logical step for Facebook to achieve this vision, and Facebook could manage the technical and resource requirements in a matter of months.

In the 10 years since its founding, Skype created nothing less than a paradigm shift in the market for international voice traffic, and it associated customers to a very disruptive price: free. A number of international calling players, both MNVO and VoIP players, entered the market after Skype. Lyca Mobile and Lebara Mobile are two MVNO examples. The net effect of these upstarts was that they forced network operators to lower prices for fixed line and mobile international calls in order to compete. Google Talk and MSN were the VoIP entrants, but Skype prevailed as the clear winner.

Microsoft, unable to compete with Skype in VoIP, acquired the company in May 2011 for $8.5 billion, a price that was many times Skype’s revenue and a premium for Skype’s unique market position. It is important to note that having the most users does not mean having the most revenue. Skype does not necessarily collect the cash flow it disrupts. Instead it creates a ripple effect of falling prices, but only captures a fraction of the lost cash flow.

The value that once appeared on an operator’s balance sheet for a higher priced service just disappears. It is no longer purchases. Consumers use another, cheaper priced service instead. Skype published its numbers in March 2011 before its scuttled IPO attempt. Revenue was $860 million for the year ended 2010. There were 668 million users, 18% of which were active users, and 8.8 million paying

Opinion Analysis

social media

ing (Fan Acquisitions) to becoming a serious direct acquisition channel. “Many of the developments are appealing to retail brands, especially with retail being the most active in the space. Most recently we have seen one high street retailer achieve a 15% higher average basket value and a 20% increase in conversion rates on Facebook, when compared to its Search activity.”

The most popular and effective ad format is the Sponsored Story. The format delivers, on average, a 32% decrease in cost per acquisitions (sales) and an increase in CTR (engagement).

Kimuyu concludes: “Although 44% say they would ‘never’ click on advertisements or sponsored listings in Facebook, it is interesting to see that those who do find the targeting effective and engaging. Moreover, given the positive growth figures, we at Greenlight predict that more of us will be advertising and hopefully ‘clicking’ on an advertisement or a sponsored listing on Facebook this year.

Opinion Analysis

ANALYSIS

m-commerce

Making money on the move? European research from Tradedoubler shows how m-commerce is disrupting traditional linear consumer purchase patterns, but what are the opportunities?

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ith smartphone and tablet use booming, consumers are increasingly using mobile devices as ‘shopping assistants’ that help them to research, locate and purchase goods and services online, on mobile and on the high street. This rich variety of purchasing patterns and journeys, revealed in an in-depth research study by leading performance-marketing firm Tradedoubler, will challenge all retailers who are unprepared.

The research, commissioned by Tradedoubler and carried out by Forrester Consulting, involved more than 2,000 smartphone users in the UK, France, Germany and Sweden. The findings show that mobile access to product information, store location, location-based offers, voucher codes, comparison sites, barcode scanners, product reviews and purchase tracking is making the traditional in-store approach to purchasing increasingly out-dated.

The study found that over 71 per cent of smartphone users across all four countries are researching potential purchases via mobile, and more than half (53 per cent) are buying goods and services other than downloads on their device.

Survey results for tablet owners demonstrate the immense power of this new platform, with 40 per cent of users researching a potential purchase and 33 per cent going on to complete a transaction. Tablet users are also among the highest mobile spenders, with the

average highest amount spent quoted at £185 compared to £113 on mobile.

The ‘portability’ of mobile devices encourages anytime, anywhere research and purchasing. Even when smartphone users are in-store, retailers cannot rest easy: with 42 per cent of users comparing prices and 13 per cent switching stores after spotting a more attractive offer elsewhere. Location-based offers or vouchers, however, help to secure the interest of a fifth of potential buyers. Overall, one in four mobile research sessions ends with a purchase being completed on the phone itself.

The research reveals that the lack of mobileoptimised sites – ones that are clear, tailored, quick and easy to navigate - is a headache for more than a third of European consumers. A quarter (26 per cent) of respondents said they would buy via mobile more frequently if websites were optimised.

The study shows that the UK has frequent but generally more frustrated mobile shoppers (50 per cent, compared with a European ‘frustration’ average of 33 per cent), while many users in France (38 per cent) believe mobile shopping saves them time. German consumers feel that buying over mobile is no different to purchasing via a computer (44 per cent) and Swedes are most likely to turn to their mobile phone in-store.

These national differences have far-reaching implications for advertisers looking to develop internationally optimised mobile offerings and affiliate programmes.

Consumer concerns around data privacy and payment security were found to be significant obstacles that must be overcome for m-commerce to gain mainstream acceptance across Europe. Around half of those surveyed across all four countries were concerned about the security of mobile as a payment platform, but 42 per cent of smartphone owners are interested in using their device as a mobile wallet if it were available.

Tradedoubler commissioned the study to help its clients across the affiliate marketing industry better understand and harness the potential of m-commerce.

“This research represents a wake-up call for all businesses that still believe an m-commerce strategy is a ‘nice to have’ rather than business critical,” said Urban Gillström, CEO, Tradedoubler. “Consumers increasingly expect a seamless, multi-touch, multi-channel experience across mobile, online and in-store platforms.

The future belongs to the advertisers that can deliver that, but it can be difficult for them to know where to start. We have undertaken this research as part of our commitment, not just to creating a world-leading mobile affiliate marketing and analysis platform for our customers, but to helping organisations across the industry better understand what they can do to take their first steps in m-commerce.”

Elaine Safier, CCO, Tradedoubler, said: “The research illustrates how important it is for retailers to understand their audience when developing a mobile strategy: the device they use, their location and their interests and aspirations. This will help them to address important issues such as user experience, privacy and security concerns, and lay the foundations for next generation products and services that are contextually relevant, location aware and intelligently personalised.”

Contact touches people? 80% of UK shoppers now recognise the contactless payments symbol and more than 1million transactions a month are being processed this way

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entertainment and indeed anywhere you currently use cash. A host of retailers have announced the move to contactless, including Starbucks, Waitrose and the M6 toll road.

“We’ve also given our customers greater choice in how they make contactless payments. We now offer not just contactless debit and credit cards but also mobile phones, Barclaycard PayTag which can be attached to your mobile and even, at selected events, a Barclaycard PayBand to be worn around your wrist”.

As contactless transactions pass the milliona-month mark, Barclaycard asked behavioural psychologist Donna Dawson to explain how new technology catches on.

Donna Dawson, a behavioural psychologist, suggests that “There are connected issues at work – habit and fear. We’ve been using coins since 600BC, which is a tough habit to break. Because of this, different ways to pay have the shock of the ‘new’,

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ew research from Barclaycard reveals that the contactless payment symbol is now recognised by the vast majority of Brits. Over 80% of the public – almost double the figure from a year ago – can identify the contactless symbol, with people in London and the North West the quickest to adopt the new way to pay[1].

The research highlights a huge shift in consumer spending preference, with a remarkable 61% of people saying they preferred using cards over cash to buy items up to £20.

Richard Armstrong, Retailer Relationship Director, Barclaycard says: “The number of people using contactless has rocketed over the last year and, across Barclays, we’re now seeing our customers make more than a million such payments per month. We’re now working with a much wider range of retailers across transport, supermarkets,

and if we have no experience of something, we fear it. Increased recognition leads to a significant trend developing, and represents the breakthrough of a psychological barrier. So the fact that we’re witnessing this with a technology which is only five years old compared to centuries of cash is remarkable.”

One hurdle for the adoption of contactless has been a perception that the technology wasn’t safe.

75% of people didn’t know that contactless, like all card payments, are insured against fraud. When told that this was the case, more than four in ten said they would be even more inclined to use the technology with fewer than one in ten still having concerns.

In contrast to people’s fears of electronic fraud, the most common way to lose money was forgetfulness: a quarter of those surveyed admitted that they had left their wallet or purse in a public place, losing all the money inside. Given our absentmindedness it would seem that carrying contactless over cash will be safer, cheaper and more convenient for many people.

Opinion Analysis

PAYMENTS

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Opinion Analysis

ANALYSIS

payments

Continued success for Payforit? It’s been a few months since the launch of Payforit 4 and in that time we’ve seen a lot of further growth and development of the Payforit scheme, says Chris Newell, AIME board member and CEO of ImpulsePay

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ayforit was responsible for over £7.5m worth of transactions in the last quarter – a 94% year-on-year increase. As you can see, that’s a lot of growth and we’re expecting even more as both merchants and consumers appreciate how smooth and easy it is to use.

One of the changes that has happened recently is that some operators have chosen to mandate Payforit as the default payment option for online transactions. What this means is that any online service using Premium SMS (PSMS) must shortly switch over to Payforit. An online service is one that is discovered and consumed on the web, rather than for example, one where the service is only consumed online – such as a game that is advertised in magazines and on TV and the customers are directed online to download it.

One of the main reasons for the operators to mandate Payforit payments in this way is the transparency and ease of use for the consumer. Payforit payments have clear processes regarding how the price is displayed and how the consumer navigates through the transaction.

Many of the Payforit scheme rules are there to help and improve the flow for the customer – making it easier for them to purchase and more likely to return. However, they are also in place to help ensure that there are no surprises with the billed amount and no complaints from consumers about hidden charges – something that PSMS has unfortunately been prone to at times.

The likely lack of consumer complaints, thanks to the very nature of Payforit has also been recognised

by Ofcom and PhonepayPlus. After some recent consultations it has been agreed that PhonepayPlus will regulate Payforit, but will regulate in proportion

to the perceived risk. What this means is that as the risk is perceived to be low (as discussed above), the regulation will be very much with a light touch.

This is a very positive outcome for Payforit. It means that as far as the regulators are concerned there are no changes and Payforit will continue exactly as it has.

This light touch regulation also highlights the confidence that everyone has in the service and it allows Payforit to further grow, develop and expand – making the service work even better for merchants and customers.

All of this has persuaded a number of large volume customers to move over to Payforit – including companies such as Switchfire. Switchfire (www. switchfire.com) was a very significant user of PSMS services in the past, they had tried to use previous versions of Payforit, but it just didn’t work for them.

However, we’ve been working with them here at ImpulsePay and Payforit 4 does work for them and it works so well they are looking to embrace it even further.

“In the past we liked the idea of Payforit more than the reality, however the most recent version has solved any problems we had and we’re really pleased with how Payforit works for us. We expect to have very high volumes of transactions using Payforit over the coming months.” Eric Feltin, operations director at Switchfire.

At ImpulsePay we are talking to many more clients that will be bringing huge volumes of transactions over to Payforit, and we know that many of the other Payforit providers are in similar conversations with other merchants. So we’re confident that Payforit will continue to grow over the coming months.

In fact, we talk regularly to many of the other Accredited Payment Intermediaries (APIs) for Payforit, not least when we meet at AIME’s Payforit Management Group. It’s during these monthly meetings that we all, as a group, provide feedback and discuss the future of Payforit.

This working group, established by AIME, is a chance for the industry to come together to discuss Payforit in an open and collaborative manner. It’s a very active group and one that I’m very proud to be a member of. If you would like further information on this group, please get in touch with AIME. One of the next events that the group is helping to put on is the AIME Mobile Operator Payments event on October 23rd. It is being held in London, at the offices of SNR Denton, and will discuss a whole range of payment issues, including Payforit.

As a merchant of digital goods, would you consider trialling a mobile payment method that has been shown to increase sales by a factor of 13?

Of course you would, well operator billing is that method.

According to KPMG, mobile payments are set to hit £591bn by 2015. Gartner expects direct operator billing to account for about 88% of the total transactions in North America and about 80% in Western Europe, by 2016.

The event is being sponsored by Velti, with SNR Denton and ourselves at ImpulsePay as co-sponsors.

If you’re interested in hearing more about operator billing, I suggest that you come along. You can find out more at http://aimelink.org/events/next_seminar. aspx To find out more about Payforit4 and AIME’s working group, contact Chris Newell on chris@ impulsepay.com

Location, location, location? Consumers are increasingly responding to locationspecific adverts on mobile and its driving m-commerce and shopping

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specific messaging is to consumers today,” said David Staas, senior vice president of marketing at JiWire. “As the on-the-go audience demands locally relevant information, brands need to focus on reaching consumers in and around their locations.”

Comparison shopping on a mobile device while in store has become the number one mobile behaviour consumers take across all ages and gender. Similar to Pew Research’s findings that, “One third (33%) used their phone specifically for online information while inside a physical store,” JiWire also found this trend to be true with 34 per cent of on-the-go consumers participating in comparison-shopping behaviour.

The study also finds that consumers are four times more likely to search for reviews than to search for a friend’s recommendation while 21% searched for coupons while in store.

In a world of constant connectivity, it’s no surprise that consumers rely on the their mobile devices to make purchases. This recent phenomenon has caused online coupons to take off and become more popular over the years. In fact, 34 per cent of consumers have redeemed an online coupon in the past 90 days.

Additionally, mobile coupon redemption is rapidly nearing newspaper coupon redemption thresholds with 18% redeeming mobile coupons and 22% redeeming newspaper coupons.

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hree quarters of consumers will now take action after seeing locationspecific mobile messages, with 80 per cent of those responding best to local information, the latest quarterly Mobile Audience Insights Report from JiWire in the US. The top three actions include clicking on location-specific ads (31%), searching for the nearest location (21%) and/or conducting additional research (21%). Behaviour further varies by smartphone device type. After clicking on an ad, iPhone users are most likely to conduct additional research (22%), Android users search for the nearest location (25%), and Blackberry users immediately make a purchase (21%).

“It is exciting to see how important location-

Opinion Analysis

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industry AIME Future Media Group: Identifying and harnessing future trends and opportunities The Group continues to drive key market growth initiatives, with regular output of information on market opportunities created through converged media. Initiatives include payments research, international market profiles, insightful case studies and white papers, promoting the use of interactive technologies, platforms and payment mechanics.

AIME is also surveying members for feedback on Industry research requirements and is liaising with PhonepayPlus to add value to future research output as part of the PPP Annual Plan.

The ‘Value of Engagement’ event scheduled for January will distill the group’s findings helping providers identify and understand successful engagement strategies and how services can be monetized in the future.

If you would like to get involved please contact Ryan Hall at AIME ryan@aimelink.org Payforit Working Group & In-App Billing Forum: Improving and empowering micropayments The Payforit Group, which includes all UK mobile operators, APIs and significant merchants, is the Industry Forum for consultation and feedback into the UK mobile micropayment mechanism Payforit.

In May AIME hosted the Payforit 4 launch event which, amongst the many changes to the Scheme Rules, included improved service flow design, merchant branding, HTML5 support and single click purchasing; addressing issues identified in AIME’s consumer drop-off analysis.

The Group meets monthly, with current items including operator mandates, the proposed regulatory framework and additions/updates to Payforit4. AIME’s In-App Billing SubGroup, is engaging with app developers, publishers and billing providers, to put forward a proposal to mobile oeprators for version 4.1, to enable a better fit for in-app purchasing. Once agreed, these payment standards will be presented to Google and other payment gateways for adoption.

The AIME Payforit and In-App Billing groups meet bimonthly and those wishing to get involved should contact David Ashman for more information davidashman@aimelink.org Interactive Broadcast Forum (IBF): Championing interactivity and engagement AIME Broadcast Forum initiatives continue to drive greater adoption of interactive technologies in programming - including voice short codes, the return of text voting and in-app voting; liaising with the regulator Ofcom in setting a framework where services can develop in a trusted business environment.

Industry processes and transparency are supported by the Group’s focus on how different platforms and micropayment technologies are used to engage with viewers, whilst AIME Best Practice Guidelines provide Industry understanding and confidence in utilising interactive technologies.

The recently published AIME Best Practice Guide for PTV Services using Social Media Promotions will enable a better

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understanding of how Social Media can be effectively used whilst staying well within the current regulations. Currently, the IBF is putting together a Technology Reference Guide that will link to key Industry regulation and Industry best practice guidelines.

Please contact Toby Padgham for more information toby@aimelink.org Voice Services and Pay TV Forum: Developing and driving consumer choice The leading success of this Forum has continued to be reflected through the Higher Rate PRS consultation released

by Ofcom. Additionally, this Forum continues to pursue changes to in-call price caps for Physic chat services with PhonepayPlus and expects a positive decision to be made regarding the proposed changes. An AIME Best Practice Guide for Chat services is currently in development to aid sector growth.

Please contact David Ashman for more information davidashman@aimelink.org Regulatory Best Practice Forum: Ensuring quality and excellence in regulatory practise Industry growth is underpinned by a strong regulatory framework which promotes consumer confidence and trust.

The AIME Regulatory Best Practise Forum liaises with key regulators (including Ofcom, PhonepayPlus, ASA, FSA and the Gambling Commission) and represents members’ interests to ensure the regulatory framework is appropriate and proportionate. Agreeing Industry rules and developing Industry Best Practise documentation will encourage Industry investment in the development of services.

This Forum develops the cross-Industry responses to regulatory proposals impacting the market and members’ business.

Recent consultations include Higher Rate PRS (Ofcom) and a Review of Information & Signposting Services (Phonepayplus).

Please contact David Ashman for more information davidashman@aimelink.org Next Quarter – AIME Events ‘Mobile Operator Payments’- 23rd October (sponsored by Velti and co-sponsored by ImpulsePay and SNR Denton).

‘Future of Interactive TV’– November (sponsor and speaking opportunities available).

Please contact toby@aimelink.org for more details about getting involved Next Quarter – AIME Training More training courses are now in the diary, with the ‘PRS Foundation Course’ set for the 9th October and the new ‘PRS in a World of Alternative Micropayment Solutions Course’ running on the 18th September and the 25th October.

Please contact bianca@aimelink.org for more information.

Further information on all of our Forums, Working Groups, initiatives and upcoming events can be found on our website, www.aimelink.org, or why not follow us at @ aimetweets for current news, content and Industry updates

industry MEF OpenMarket joins MEF’s Privacy in Mobile Applications Initiative OpenMarket has joined MEF’s Privacy in Mobile Applications Initiative to develop standards and tools for the mobile application ecosystem that protect consumers.

Tim Ritchie, Vice President of Sales and Account Management at OpenMarket, and Jeff Lowder, Director of Global Information Security and Privacy at OpenMarket, will both support MEF’s Mobile Applications Privacy Initiative. Lowder is President of the Society of Information Risk Analysts (SIRA), and will join the Initiative’s working group to bring a strong understanding of global best practices and strategies to implement them.

Tim Ritchie has been appointed to MEF’s 2012 North America Board of Directors and will help guide MEF’s privacy and security initiatives in this region.

At OpenMarket, Ritchie is responsible for North American sales, account management, campaign management, and carrier relations, with a unique perspective into content provider needs,

subscriber preferences and carrier requirements.

“Enterprises are now broadly recognizing that mobile is a critical channel for commerce,” said Ritchie. “MEF holds a strong position to accelerate market growth while protecting consumers, and I look forward to contributing to these privacy and security efforts.”

Global consumer survey 2012 The 2012 MEF Global Consumer Survey (GCS) report is being updated. The report is designed to reveal the consumer habits of mobile phone users from across the world, giving unprecedented data & intelligence into mobile engagement & purchase habits across developed and emerging markets.

The MEF GCS report provides invaluable real world data to mobile specialists and those new to the mobile content and commerce ecosystem, giving you the insight to develop targeted mobile strategies and fully exploit the rich opportunities that mobile provides.

PhonePay Plus (PPP) UK PRS attracts global business In its Annual Report 2011/12, PhonepayPlus, UK regulator of PRS, reveals figures for the first ever PRS industry-wide Registration Scheme. Out of almost 4,000 registered providers, 14% have headquarters located overseas, with providers based in 75 countries including Australia, Russia, China, India, Nigeria, Argentina and the USA. The attractiveness of the UK PRS market for international providers and investment is underlined by research published in 2011 by PhonepayPlus that shows while the average global PRS revenue per capita (based on 20 bench-marked countries) was 4.57USD, in the UK it is 18.70USD. PhonepayPlus’ annual market review, Current & Future Market for PRS 2011, shows that some providers are capitalising on the ‘borderless’ reach of global sites, such as Facebook, by facilitating mobile payments across a range of international markets. In addition, many UK mobile aggregators are now part of international consortia.

Prior permission revisions PPP has issued revisions to its prior permissions for certain categories of PRS which are deemed as higher risk than normal to consumers. This Notice is to remind providers of premium rate services that the persons who are required to seek and hold prior permission changed on 1 September 2011, so that the registered provider or providers who has/have responsibility for any of the conditions attached to a prior permission regime will be required to have prior permission in respect of the services they run.

In respect of some services which require prior permission, the conditions will be fulfilled by one provider involved in the delivery chain for those services. In these circumstances, the provider that fulfils all the conditions will be required to have prior permission in respect of those services before they commence. In this instance the provider will be named as the provider that fulfils all conditions on the prior permission certificate.

Clearer signposting consultation The consultation addresses the issue of Information, Connection and/or Signposting Services.

These are premium rate services that are usually promoted prominently on search engines such as Google or Bing, or sometimes on classified ads websites such as Gumtree, and can be defined as follows: PhonepayPlus is concerned about the potential for these services to cause significant consumer harm, in particular by misleading consumers into thinking that the premium rate number they are being offered is an actual number of the organisation they are wishing to dial. This not only calls into question the value that consumers would derive from services if they were clearly and fully informed, given that the same service or information can be easy to access and available for free or at a significantly lower cost, but also risks undermining consumer confidence in the public or commercial organisations with which the ICSS associate themselves.

PhonepayPlus is proposing a prior permissions regime to ensure that such services can only operate if PhonepayPlus is satisfied that they meet the conditions and enhanced obligations specified in the prior permissions regime.

The 10-week consultation on these proposals closes on 27 September 2012 and details of how to respond are included in the consultation document. We are particularly eager to receive feedback to these proposals from providers of ICSS, those businesses and organisations that ICSS associate themselves with and consumer groups.

MMA

Asking the multi-billion dollar questions During a closed-door, invitation only meeting at the MMA CEO and CMO Summit, the MMA unveiled its new initiative, “MXS” which challenges marketers and agencies to look deeper at how they are allocating billions of ad dollars in their marketing mix in light of the radically changing mobile centric consumer media landscape. MXS – which stands for Mobile’s X% Solution - is believed to be the first empirically based study of the rebalancing and optimization of a marketing mix to help marketers achieve a higher return on their marketing dollar investment.

The study concludes that the optimized level of spend on mobile advertising for US marketers in 2012 should be seven%, on average, vs. the current budget allocation of less than one per cent. Further, the analysis indicates that over the next 4 years, mobile’s share of the media mix is calculated to increase to at least 10% on average based on increased adoption of smartphones alone.

The telemedia industry crosses so many business borders, its interests are tied up with a range of trade bodies and associations.

Here we take a look who is doing what

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EXHIBITION, SEMINARS & NETWORKING 17-19 OCTOBER 2012 H10 Andalucia Plaza Hotel, Marbella

learn. discuss. inspire.

platinum sponsors

gold sponsors

WORLD TELEMEDIA SHOWCASES

the solutions, strategies, applications and technologies that connect consumers to media, content and billing they want. This is the telemedia industry’s annual trading exchange for domestic and international providers that link network delivery, micro billing technologies and other interactive functionality to an ever expanding range of content and media distribution channels.

Join more than 400 delegates for 3 days of thought provoking sessions that address the strategic issues that directly influence our industry’s ability to capitalise on current market trends and point the way towards opportunities in new markets and vertical sectors.

• Trends, Stats, Facts & Figures • Traditional & Social Media • Interactive Advertsing • Mobile Marketing • Bar Codes & QR Codes • Device Location & 2nd Screening • Essentials – Chat, Dating, Psychic, etc • Services – Games & Gambling • Live Applications – Events, Sports • Virtual Goods & Games • Social Media & Premium Content • Social Media & Social Voting • Social Media & Social Commerce • mPayments • PRS & PSMS• WAP & In App Billing • mCommerce & mRetail • Networking Markets • Fraud Prevention • Legal & Regulation

EVERYONE ATTENDING

silver sponsors

World Telemedia Marbella should leave having learned something new, discussed their key issues with colleagues and been inspired (or inspired themselves) with some of the most innovative uses of technology in the premium communications space. To facilitate this, we are creating a conference programme that will offer – in three very different environments around the show – the chance to do just this.

Uncover the issues, technology developments and trends that are shaping the tele- media industry, through panels, presentations and the ancient art of conferencing Join your industry peers to discuss, debate and shape the key issues facing the telemedia industry in a series of roundtable discussions Learn from what works and who is doing what innovatively with technology, servic- es and tools of the telemedia trade through a series of case studies, live demos and more on the show floor.

LEARN

DISCUSS INSPIRE

WHO’S GOING TO BE THERE?

bronze sponsors

World Telemedia Marbella is going to be awash with talent from across the value chain in the telemedia sector, including: • Media, Marketing & Data Owners • Premium Content Publishers • App Development Companies • Aggregators & Resellers • Technology & Service Providers • Billing & Collection Companies • Network Operators & ISPs

For the latest information about the event and how to sign up

www.wtevent.co.uk

12

telemedia issue 31

EXHIBITION, SEMINARS & NETWORKING 17-19 OCTOBER 2012 H10 Andalucia Plaza Hotel, Marbella

dayone

THURSDAY 18 OCTOBER VERTICAL MARKET OPPORTUNITIES

10:00 – 10:30 LEARN The vertical opportunity Outlining what consumers want from mobile across a range of vertical markets

10:30 – 11:00 LEARN Interactive TV & print Drilling down into the role of telemedia in TV and print • Latest technology • Consumer trends • Social media • Traditional Telemedia services in new roles

11:00 – 11:30 LEARN Interactive Marketing & advertising Drilling down into the role of telemedia in marketing and advertising • Latest technology • Consumer interaction with ads • Social media • Traditional telemedia in new roles

11:30 – 12:00 COFFEE & NETWORKING 12:00 – 13:00 DISCUSS New Technology scams and fraud With new technology and services come the inevitable frauds and scams. Join in the discussion to assess: • What the new frauds are • How to overcome them • The role of regulation • Where technology fraud goes next

13:00 – 14:00 LUNCH & NETWORKING

14:00 – 15:30 LEARN Retail & Commerce The biggest opportunity for telemedia services is in retail and commerce. Through a series of panels and presentations, find out • Latest trends • Market opportunities for what you do • What retailers are looking for • What consumers want

15:30 – 16:00 COFFEE & NETWORKING 16:00 – 17:00 LEARN Games, gambling and live eventS Games, gambling and making live events interactive is becoming a key market for telemedia services. Find out • What games companies, gambling operators and events companies are looking for • The opportunities in payments, ticketing and service delivery • Market opportunities for your existing technology

17:00 – 18:00 DISCUSS Regulation for a cross-border world As online services become ever more international and national borders start to fade, what does it mean for the regulation of the telemedia industry and how does that impact your business

For the latest information about the event and how to sign up

www.wtevent.co.uk

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EXHIBITION, SEMINARS & NETWORKING 17-19 OCTOBER 2012 H10 Andalucia Plaza Hotel, Marbella

daytwo FRIDAY 19 OCTOBER telemedia services 10:00 – 11:00 DISCUSS Latest Developments & opportunities in Telemedia • What are the latest technologies available for traditional telemedia services • How can they be applied to new vertical sectors • What new opportunities exist for telemedia in a global marketplace…

• … and what are the challenges

11:00 – 11:30 COFFEE & NETWORKING 11:30 – 13:00 LEARN Billing & Payments At the heart of telemedia lies billing and payment and now all vertical markets are looking for ways to use mobile and premium rate to collect money. Find out • What consumers want • What networks have to offer • How to use third party products • The significance of m-wallets • International payments

13:00 – 14:00 LUNCH & NETWORKING 14:00 – 15:00 LEARN Telemedia Essentials The latest developments in • Chat • Dating • Psychic & Horoscope • Adult • Lifestyle Coaching • New services • Technology and devices – and their impact • Case studies from across Europe

NETWORKING

IM stop I op Mob press en ingile s p on 17 nigh onso Oc t d r tob rin ing er ks

All our events provide an essential opportunity for buyers and sellers to get together and we are continually finding new ways of introducing new contacts to one another during the valuable time they spend at our shows.

HAPPY HOUR Thursday evening drinks on the show floor will be hosted by ImpulsePay in partnership with SwitchFire.

A night on the town Spend Thursday night enjoying the Old Town as guests of Mobile Life.

NETWORKING LOUNGE During the day the focus will be on our networking lounge, which includes exhibitors, sponsored hospitality and refreshment areas. There will even be a pool table and free WiFi. The day will formally end with a closing drinks party.

BLIND SPEED NETWORKING MOVERS MEET SHAKERS It is not what you know, it’s ‘who’ you

know and blind speed networking will deliver 6 new contacts in 30 minutes.

Forget the simple buyer / seller relationships, this event will ensure you expand your business network and get you closer to the solutions you‘re looking for.

Sponsors and exhibitors enjoy guaranteed host ‘shaker’ status – restricted numbers of ‘movers’ need to apply in advance when registering.

MOBILE APP & INFO SERVICE Our mobile alert sponsor will ensure that all the essential show information is at hand throughout the show. Delegates can also use our‚ ‘Shhmooze’ smartphone app that uses location-based technology to help more attendees make more connections on the show floor.

EVENING EVENTS Each evening, all participants will have an opportunity to let their hair down at a number of parties in some of Puerto Banus’s top night spots.

INSPIRE CASE STUDY WORK SHOP NEEDS YOU! Learn from what works and who is doing what innovatively with technology, services and tools of the telemedia trade through a series of case studies, live demos and more on the show floor.

Featuring: • Spoke • Trannglo • Outbrain • Orca Digital • Infomedia • Mojiva • BuzzCity • Tradedoubler

For the latest information about the event and how to sign up

www.wtevent.co.uk

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telemedia issue 31

EXHIBITION, SEMINARS & NETWORKING 17-19 OCTOBER 2012 H10 Andalucia Plaza Hotel, Marbella

LOVE YOUR MOBILE CUSTOMERS Recent reports by Juniper Research

and Morgan Stanley respectively suggest that by 2015 mobile adult subscriptions will reach $1 billion and that growth in all forms of mobile adult content will triple. We’ve also seen a spike in the uptake of video streaming, which will account for 69% of all mobile data traffic by 2014.

Combined with social media, direct marketing capabilities and a vast array of billing tools, companies with a strong mobile proposition will gain the biggest share of this hugely lucrative potential market.

THE CHALLENGE

The increasing penetration of mobile devices has created a new breed of consumers – that’s actually driving higher yields despite competition from free content sources. They no longer recognize the boundaries between online and mobile and demand premium

“on the move” adult services.

It’s therefore vital to start viewing mobile as the essential platform and start developing strategies and compelling mobile propositions that capitalize on the ubiquity, impulsiveness and uniquely personal nature of mobile - whilst complementing and augmenting existing online and real world experiences.

THE PARTNERSHIPS The commercial link

mADULT SUMMIT

between mobile technology and adult content, service and applications is well established. By co-located Mobile with World Revenues & Strategies for Adult Content & Applica Telemedia the original home of premium adult telephony services, delegates will not only learn how to get their share H10 Hotel Andalucia, Marbella of this hugely lucrative potential market, but also enjoy direct mADULTSummit.com access to the expertise, technology and providers necessary to help them do just that.

18 October 2012

Busting The Mobile Myths MOBILE PAYMENTS

Setting the scene for the day ahead, our panel of experts take apart some of the key myths around mobile.

Some Myths we are looking to bust: • Mobile cannibalises online and DVD revenues • Mobile doesn’t have a great business model • Operators take too much of the money • Mobile isn’t the ideal platform for consuming adult • The tablet will save the industry • It’s now all about selling to couples • Chat, dating and flirt services are the only things that work on mobile

The Case for Mobile

Our experts will outline the business case for mobile in adult, looking at: • Mobile revenue forecasts • Consumer behaviour • Mobile device penetration • The operator perspective • Using mobile to cross sell online and other channels • How mobile can drive up traffic • New partnerships, providers and value chains

Real Mobile Strategies

We’ve seen what the reality of mobile in adult is and what the business cases are for implementing it – but how should you approach it strategically and tactically? Our experts will look at: • A breakdown of the value chain for adult on mobile • How different business models service the value chain • Options for going mobile – m-sites, apps, affiliates or mix and match?

• Licencing versus direct to consumer • Local versus global • Macro versus micro • Breakdown financials

Billing is boring – but getting paid is fun. So how to make best use of the burgeoning range of billing and payment tools around mobile and what they offer to the adult business, including: • Overview of the different mobile payment tools available • Direct operator billing verses third party tools • Flow of mobile payment and getting a share of profit • Commercial relationships through payments • How to manage a global mobile offering • How to service markets that don’t have credit card • Reaching the unbanked • VAT and the UK market (PayForIt)

MOBILE CONTENT

What content can work on mobile and how can you build it into your wider online adult strategy?

• How to upsell or cross sell, not cannibalise • Freemium and micro payment models • Making video a key product • Shifting content from online to mobile • Exploiting chat, video chat, MMS, SMS and fixed line • Dating and ‘soft services’ • Catering for niche tastes • Developing for a range of devices • What’s in it for studios/DVD markets

Partners

BREAK OUT AND SORT IT OUT

To get the mobile adult space moving operators, service providers and aggregators need to work with the adult industry to meet its needs. And here is your chance to make it happen. We break the audience down into three groups and for 20 minutes each group gets to debate with operators, aggregators and service providers – and amongst itself – then move on. After an hour we reconvene to discuss the upshot over a few drinks.

For the latest information about the event and how to sign up

www.madultsummit.com

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Telecoms

Big bang theory As the digital world enlarges so the real world becomes smaller, offering telemedia players new opportunities – but with this borderless utopia comes increased competition and companies prepared to push the boundaries – often to the industry’s detriment.

Matthew Leach reports

16

T

he premium rate industry is going from strength to strength and, according to research from PhonepayPlus, the UK is where the action is. The regulator’s annual market review, Current and Future Market for PRS 2011, shows that consumers are spending more per head in the UK than anywhere else, with an increasing number of international companies basing themselves in the UK. As Mike Charlesworth, director of Mediatel says: “The UK marketplace is extremely competitive. If you are based in London, it is a huge advantage, because if you do business here you can do business anywhere.”

PhonepayPlus’s report highlights how lucrative the UK market has become and what a draw it is for international players. Figures from the industry-wide registration scheme reveal 14% have headquarters overseas. Providers are based in 75 countries including Australia, Russia, China, India, Nigeria, Argentina and the US. Most importantly, the average global premium rate services revenue per capita, based on 20 benchmarked countries, was $4.75 compared with the UK’s $18.70.

Charlesworth puts much of the UK market’s buoyancy down to regulation. “The UK market is one of the most de-regulated markets in the world.

Compare this to Australia, one of the least deregulated,” he says. “The cost of inter-connection in Australia is prohibitive. The Australian government still owns a large chunk of Telstra, so why would the government want to de-regulate further? But it is bad for the market as it is more expensive for consumers, which is counter-productive for the competitiveness of business.”

Chief Operating Officer for Kwak Telecom, Josef Bruckschloegl, believes there is a huge opportunity for making money internationally with call-in satellite television shows, which are broadcast simultaneously into numerous countries using on average three to five international premium rate number. This format allows media companies to save on production costs, enabling them to spend more on content and advertising. This in turn stimulates the market and increases the number of people participating.

“Demand of media companies is changing now you have television shows that are available in a number of different countries,” says Bruckschloegl. “The key issue is not the content itself but the distribution of the content. Broadcasting into, say, 60 different countries simultaneously reduces production costs because it is re-used content. At the moment it takes, on average, between three and five international premium

telemedia issue 31

rate numbers to cover this many countries. Obviously, in this kind of multi-national environment, one single point of contact would be the ideal. It would not only reduce costs further, but also reduce the complexity of the whole process. Unfortunately we are still some years away from that.”

Although a lucrative market, the media companies must get it right regarding regulations and legal framework to run various services in different countries. Bruckschloegl explains: “On the question of regulation, it is quite complex because advertising in each country has its own regulations and legal framework. There is the issue of data protection and on winning games, like the lottery, it can be tricky as some need a licence.”

Although the UK is being held up as the place to do business, opportunities are arising worldwide.

New payment mechanisms such as Facebook credits also help oil the wheels of commerce.

International players use the social network to facilitate mobile payment across international markets, showing that providers are capitalising on the borderless reach of such global sites.

Facebook credits are increasingly seen as a global currency, with companies such as Milyoni, which helps entertainment companies turn Facebook users into customers, creating a number of live and videoon-demand offerings on Facebook. These services, the company claims, have reached users from over 30 countries using Facebook credits as the only currency.

The frictionless currency conversion is a key factor in the global adoption as there is no need to worry about exchange rates or fluctuating monetary values.

Facebook can provide seamless currency conversion for currencies and this figure is on the rise.

In April, Dean Alms, Milyoni’s VP of marketing and business development claimed that roughly 16 billion Facebook credits were distributed and consumed in 2011. This year, he predicts that the use of Facebook credits will soar to over 40 billion credits spent on virtual goods, digital goods and more.

According to Dick Dekkers, VP for business development for Trannglo, in a recent MEF case study, mobile commerce is, and will continue to be, a lucrative business across international borders chiefly benefiting main mobile network operators.

The mobile’s ability to perform transactions on the move makes it appealing to the established market, providing operators with additional revenue. While in the less established markets, users are looking to the mobile for a secure, simple, affordable channel to interact with peers. Mobile Money Transfer, particularly, is seen as the next big thing in mobile commerce.

Telecoms

and practice Juniper Research offers impressive figures as evidence. The international mobile money transfer market is set to hit US$65billion by 2014. This will be led by gross transaction values, driven mainly by the migration of foreign workers to developed countries, remitting to their families back home.

However, just as these new markets are opening, bringing new business opportunities, the increasing openness poses challenges in terms of regulation that must happen across borders. The infamous ‘RuFraud’ last year was a wake-up call. It showed that an increasingly globalised digital market place means more potential for fraud in different countries simultaneously. PhonepayPlus moved fast, coming down hard on those involved in the fraud that spanned 18 countries.

James McLarin, Senior Communications Executive, PhonepayPlus says: “RuFraud was originally spotted by an anti-virus company, but we moved swiftly to shut it down. We fined a Latvian company for allowing the company in question to use their short codes. Our response was to effectively cut them off, by requesting the suspension of short codes through the aggregators.”

McLarin insists the regulator is not afraid to punish wrongdoers in the UK, but its powers are limited in the international market. “We do our best to inform the other countries involved, but regulations differ vastly between country to country, so there is only so much we can do,” he says.

The importance of regulation cannot be understated, especially on a global scale. For the telemedia industry to flourish, consumers must be protected in what is increasingly a global rather than domestic problem.

Meditel’s Charlesworth believes that companies should be allowed the freedom to do business globally, but also that regulation is needed. He says: “The international market is so free in some respects, with everyone trying to make a margin, but people need to be able to make a call and be connected. The hijacking of number ranges needs to be stopped. The ITU does not have the power nor the interest. This is where the industry should be getting together. The ITU is toothless, the carriers take little notice of it.”

Traffic trading and arbitrage, whilst perfectly legal and often used by carriers to increase profit margins, can open the door for fraudsters. The problem arises when traffic is sold on, often to overseas service providers from less regulated markets who may sell it on to increase their own margin. As the supply chain lengthens, the chances of fraud increases. The fraudsters take the traffic at an agreed pay-out rate, collect the money locally from consumers, and never pass it on.

Bruckschloegl has no problem with arbitrage and

believes the international market has more important concerns. “We need to separate fraud and arbitrage,” he says. “As arbitrage, the practice of buying cheap and selling it more expensive, is necessary to keep the markets stable. Fraud, such as PBX hacking, is not a question of business, it is a question of crime.”

Mediatel’s Charlesworth largely agrees with him on arbitrage, but points out that smaller telcos are at the mercy of larger carriers over this issue. “The arbitrage market in other industries, like the financial markets for example, is of course standard business practice,” he says. “In the telecoms industry carriers often have too much power and this power is often abused by disputing payments on the basis that traffic is of an arbitrage nature.

“Quite simply if a price per minute or SMS is, for whatever reason, below wholesale market rate why should the buyer be penalised regardless of the intention of how the traffic should be used? However, Carriers will do what they want to increase margin because legislation allows them to. Until there is tighter legal controls in place, this activity will continue and the smaller telcos will always suffer.”

Kwak Telecom has, for years, been pushing for higher standards and Bruckschloegl believes there needs to be more dialogue within the industry: “International premium rate industry will eventually be regulated the same as the domestic premium rate industry. Demand from media companies is growing, so the more professional the market gets the less fraud there will be.

Kwak is one of the entities shaping the market, pushing for better quality standards internationally.”

According to Bruckschloegl, the only way to address fraud in the international market is by sharing information and tighter regulation. “The way to combat this is with the help of all the players in the market, not allowing non-permitted calls, checking the documentation of number ranges. There will always be white sheep and black sheep and the black sheep will become increasingly harder to find when regulations become tighter and things like cash flow are better analysed.”

One organisation that is making all the right moves in getting the industry talking about these issues is the International Audiotex Regulators Network. It is an international premium rate regulatory body that trades information and provides general knowledge on how regulation is approached by member countries. However, despite these reservations about regulation and fears of increased competition in a crowded market place, there is optimism that the future of international markets is bright. But to be successful, companies must be bold and creative. telemedia issue 31

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Security

Hacking, jacking While premium rate scams may increasingly be a thing of the past thanks to better regulation, the new world of apps and smart connected devices is opening up a new front for the war between scams and consumers. Paul Skeldon reports

W

hile we have all become accustomed to firewalls, virus protection and all manner of other electronic prophylactics to keep nasty viruses away from our computers, those canny villains behind these often very lucrative schemes have not just given up and taken up legitimate jobs, but have turned their attention to the unprotected world of mobile.

The rise of the smartphone and tablets has seen a revolution akin to the up take of the web happen all over again – and, as with the web 15 years ago, it is largely unprotected from people reaching in and doing all the things they did online, but via your mobile device.

Would it surprise you to know that 17,676 mobile malware programmes were detected during the first half of 2012 by NetQin, up 42% on the same period of 2011? In fact some 13 million phones worldwide are infected, up 177% on 2011. A quarter of this malware originates in China, 17% originated in Russia and 16.5% in the US. But what problems does it create, and who is doing what to tackle it?

Malware involves the insertion of malicious coding into computer programmes or applications. This can result in “trojanised” apps that may appear totally normal to consumers, but are, for example, programmed to dial premium rate numbers from the consumer’s handset without their knowledge or consent. Malware has been around in the PC environment for a number of years. PRS malware in the mobile environment is relatively new and is still small in scale compared to malware on PCs. However, the rapid development and penetration of smartphones clearly creates opportunities for malware on mobiles to become more prevalent. The House of Commons Science and Technology Select Committee’s recent report on malware and cybercrime states that while approximately one in three adults use a smartphone, ‘there is a distinct lack of understanding around related security issues’ – and it reported that there was an 85% increase in malware detections on one platform in the first six months of 2011.

The fall out from this dramatic rise in mobile-centric criminality is that not only are consumers – and let’s

face it network operators, aggregators, content providers and everyone else in the value chain – being ripped off, but it is undermining the trust in the nascent m-commerce marketplace. With so much vested interest in making mobile a commerce channel for content and good old fashioned shopping, this problem is one with multi-billion pound global implications.

While malware is one of the key problems facing mobile users, there is also an increasing move towards erroneous advertising and various other spoofing operations that use fake names and copied brands to lure people in (see box).

BuzzCity and Computer Science are carrying out a research study into the misuse of advertising across mobile and the web. CPC (cost per click) is the dominant model driving advertising activity on mobile ad networks and search. The way it works is whenever a site visitor clicks on an ad, a small amount of money moves from an advertiser account to the site owner’s account. Advertisers seek out networks that offer them the best return on their investment. The industry speaks of finding ‘traffic that converts’ – clicks that result in the advertisers’ goal of a sale, a signup or a download.

Problems can arise when fraudulent site owners generate clicks on ads that appear on their own site to boost their earnings. They might simply click on the ads whenever they get a chance, or they could try to alter Simple steps consumers can take now to guard against malware are: the codes in an ad tag, or they could even use ‘bots’ – • Treat smart mobile devices in the same manner as desktop computers; software designed to click on banners. Such ‘click fraud’ • Stick to reputable app stores; seriously diminishes the efficiency of a campaign, and • Be aware of clicking on in-app ads and notification messages; • Trust your instincts – if the app or offer seems too good to be true, it probably is ad networks invest significant time and energy to stamp

Simple steps

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telemedia issue 31

Security

and attacking our customers and ensure that malware merchants do not get a foothold in the UK market.”

Tony Neate, Chief Executive of Get Safe Online, adds: “In the last couple of years, fraudsters have intensified their efforts to target web users via the mobile phones.

It’s no longer a ‘new trend’, but a very real threat, hence it’s been a key focus of our consumer education campaign. We are pleased to be working with PhonepayPlus, wider industry, law enforcement and others to ensure that consumers get the information they need to use the mobile internet confidently and securely.”

This is the modern scam

Of the new PRS-impacting scams and malware already doing the rounds, there are three main practices that are causing the most disruption among consumers as they involve misleading information and often charges that are either not clear or downright hidden from the consumer until they get the bill. The scams are: Typosquatting The practice of registering internet domain names that are mis-spellings of widely known and trusted internet brands – such as Dacebook and Twtter, instead out the practice. It can also damage user experience – of Facebook and Twitter and Wikapedia in place of Wikipedia. This is with the with promotional messages becoming unreliable and intention of redirecting consumers who mistype or click on links they haven’t misleading. read properly that appear on well-known sites into their browser, on what ever “As mobile traffic and internet advertising grows, click device. This will lead them to webpages that are designed in such a way as to be fraud has the potential to diminish the trust of adverconfusingly similar to the website for which the consumer was originally searchtisers who otherwise should be getting better returns ing. from their growing mobile budgets,’ said BuzzCity CEO, In PRS terms, says PPP, this is with a view to taking consumers to web pages Dr KF Lai. ‘BuzzCity already has a system in place to that invite them to accept the purchase of a PRS in the belief that the PRS is assodetect and discard fraudulent clicks before they reach ciated with a trusted brand. This is compounded where consumers are not made advertisers’ accounts, but we want to ensure that it aware of the pricing and other key information. doesn’t become an issue moving forward.”

PPP has recently adjudicated on such a practice that was found to be in breach This is just part of the fight against these new scams. of the 12th Code.

Many trade bodies, companies and operators are all looking at the problem of mobile malware and how to Clickjacking tackle it. In the UK, Phonepay Plus (PPP) is working This is the practice of using graphics coding on a website to disguise a link as with internet security experts, law enforcement bodies being something else. and GetSafeOnline to tackle the emerging threat of PRS In PRS terms, warns PPP, the consumer clicks on link which takes them to a malware attacks on smartphones. website involving PRS without the consumer realising.

The objective is to ensure that the UK continues to be a market that is well protected against online criminal fraud, so that consumers can continue to use premium Lifejacking rate and other mobile services with confidence. The This is the practice of manipulating social media sites so that consumers believe general message to consumers is that they should not a link or other advertising has been forwarded or endorsed by one of their conbe unduly alarmed and they should bear in mind that tacts, when in fact that is not the case. the UK is a well protected jurisdiction.

In fact a recent case has found a weakness in Apple iOS’s iMessage programme Hamish MacLeod, chair of the Mobile Broadband that allows the spoofing of SMS, which is being corrected as I type.

Group, explains: “This is an initiative that works for In PRS terms, says PPP, a link to a web page offering PRS may be sent to conboth consumers and the telecoms industry in the UK. sumers as if it has been sent or endorsed by a contact or friend or other trusted We know our customers enjoy the many innovative source. services and products that smartphones open the door While PPP has not adjudicated on clickjacking or lifejacking cases, it is clear to. What we have agreed today will help us to protect that it could well do so, as it appears to come under it remit. telemedia issue 31

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Media

The

PRS has moved on since the days of it being seen as ‘third party services’’ by mobile operators – it now sits at the heart of media interaction.

But getting the right tools for the content is an increasingly complex task.

Graham Halling, digital business director at Spoke, offers some guidance

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future of PRS?

T

oday 20% of internet traffic comes from mobile, half of the UK population access the internet ONLY through a mobile and current upgrade figures show that smartphone ownership is well on the way to being the comfortable norm. Content is not only King, it’s the only long-term commercial game in town and getting consumers to pay for it (and how) are the burning issues of the day. 50% of subscribers will be paying for goods and services by mobile by 2014 and those that are selling to them will have the opportunity to move into previously media-dominated daily relationships with their ‘audience’ and it is this shift in behaviour and content consumption that will define the media interaction landscape of tomorrow.

None of this is news to those in the Telemedia industry, but for most clients, the rapid evolution and convergence of access technologies and changing consumer behaviour has led them to commit huge capital and operational expenditure in backing several horses, which even today, sees many still perched precariously on the horns of a dilemma as to the most effective, profitable and future-proof models for retaining and interacting with their existing audiences.

Understanding and evangelising this wider strategic role for both premium rate and free audience engagement now lies at the very heart of the telemedia business and it reaches into so many different markets. So what trends are emerging across this panopoly of industries that telemedia can exploit?

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PRINT

Publishers’ long-term business models have increasingly become focused on the online space. Many have decided that maintaining profitable interactive relationships with their audience means migrating as many of them as possible to digital products. Instead of print to digital interaction – which is basically what a printed shortcode is – the result can be a divergence of print and digital business units and objectives, each working towards different, contradictory objectives. The upshot is that print products are often woefully under-utilised as interactive channels and neither medium manages to exploit the overlaps or compliment the other commercially.

The success, or otherwise, of pay-walls, VoD, bundling, paid-for premium-content and evolving digital advertising models are of course vital in confronting the one overall consideration that has to sit at the heart of media owners’ strategic core-business revenue planning: what can become digital, will become digital.

This shouldn’t be read as ‘print is dead; digital is king’ leading to a predominant either/or mentality within media owners and their print and digital business units. In the interactive services sector, even the most traditional print audiences will increasingly be consuming content and therefore interacting with telemedia companies’ clients through all of the channels and platforms available. And publishing should be encouraged to embrace this multi-usage, not defend against it behind commercial demarcations. Technology supports print, not necessarily replaces it.

media When looking for ways to maximise interactive revenue returns from traditional print businesses, publishers should be encouraged to exploit the strengths and characteristics of each medium in definite terms. More than ever before, interactive content can be used to bridge the gaps between traditional print and digital assets.

From releasing multi-media content off-the-page to minimising ‘friction’ in response mechanics, use of new technology to enhance existing content is the key driver in protecting core revenues and realising new streams.

What is seen on a frighteningly regular basis from media owners and their advertisers is abandonment of direct reader interaction in favour of digital serving. A publisher develops mobile apps, mobile optimised websites or tablet-focused digital editions (often all three), but barely considered how to use these new platforms to ‘migrate’ traditional interactions, such as competitions, voting, polling and so on, nor how to position these digital assets so as not to entirely separate them from the print products.

The truth is that all of the staple services – such as competitions, UGC, subscriber services, loyalty/rewards programmes and many others that have worked off-thepage or over the phone – can re-invent themselves.

The market for interactive titles continues to grow, but in most cases actual ‘real’ direct-reader interactivity is largely neglected beyond the web model of clickthrough advertising banners and sponsored content.

Content-release technologies such as QR codes are used to simply transport from print to digital assets and newer experiential technologies such as augmented reality have been mis-appropriated to perform a similar job.

The general picture is of interactivity actually being less a two-way ‘involvement’ and more a hook with which to snare offline readers into online assets.

The most effective solutions concentrate on creating a bridge between the print and digital environments, allowing exploration and enjoyment of these growing channels without severing the traditional reading experience or compromising direct revenue-generating opportunities from audiences.

TV The TV content delivery landscape has altered dramatically in the past few years, but maybe the most important new trend to establish itself and stimulate the greatest volume of discussion in broadcast has been the evolution of social TV, not least what ‘Social TV’ actually is.

Social TV as the increasingly broad environment within which content, interaction and discussion come together to enhance the traditional viewing experience and deepen the viewer’s connection with content, broadcasters and advertisers.

Why is TV becoming an increasingly ‘mobilized’ discussion? Because 87% of people are using their mobile devices whilst watching TV and mobile web users spend more of their media time on mobile than TV. So far, harnessing these behavioural changes hasn’t gone much further than assimilating Facebook ‘likes’

and Twitter ‘trendings’. Even here there remains a host of opinions about what the genuine measures of success are. Wandering into the proliferating social TV ecosystem with such limited objectives will leave most practitioners at the mercy of any number of snake-oil salesmen eager to evangelise the latest engagement platform.

Netflix, LoveFilm, Apple and Sony (amongst others) see a future where content is consumed on-demand or by piecemeal subscription, delivered via IP, and where social media will have a role in enabling discovery and building communities around non-linear content.

Savvy broadcasters see a more ‘corralled’ future for social TV. They believe social TV’s power is in the ability of social apps like Zeebox (in which SKY has a 10% stake) and their own two-screen plays to enhance and reinforce a live TV service.

Both of these agendas have merit and strategically make perfect commercial sense to those businesses.

The spanner in the works is currently in audience adoption. There is widespread market confusion around ondemand service offerings on the one-hand and a lack of ‘stickiness’ amongst second-screen applications on the other. Advertisers, whose own presence on TV will remain critical (both to themselves and to those delivering content) but who will need to adapt accordingly if they too want to ride the wave, are understandably cagey as to how best to exploit the opportunity.

Content Marketing The use of direct branded media communications by non-media brands has been around for many years of course, ranging from customer magazines to networks of websites and branded TV stations. Today though, the gap between media channels and the advertising brands that commercially underpin them has never been less clearly defined.

Content marketing means producing and leveraging one’s own branded content for marketing purposes, rather than buying advertising time and space on someone else’s media. This content can take on many different forms, including some very familiar to us but also the growing ‘social’ channels: live web events, VIP areas, brand ambassadors, blog posts, photos, videos, how-to guides, Internet radio, and so on.

There are many drivers behind the growing interest in this area; diminishing returns from traditional advertising, control of the consumer experience, information demand and the general explosion in social media but perhaps the biggest influence is the impact on search optimisation. Understanding where these influences sit in your own priority list is a key first-stop as you can achieve returns in branding, membership, lead-generation or straightforward commerce gains when content marketing is positioned correctly.

This is still a developing area and we continue to learn from our experiences and those of others, but the one paramount rule for any brand active in this area will always remain true – your content must have real value for your consumers, all of the time. telemedia issue 31

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PRINT

Beyond the app T Most print media companies have embraced the app as a way of serving up content to a new, digital-savvy audience. But the digital world is constantly shifting and if any of those companies had any thought of resting on their app-shaped laurels, they are in for a rude awakening.

Matthew Leach reports

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ough times lie ahead for publishers, thanks to the disruptive influence of digital technology. Media companies are struggling to use these new channels effectively to engage readers with compelling content, instil brand loyalty and develop new, much-needed revenue streams.

Mark Challinor, director of mobile at Telegraph Media Group, warns: “The fundamental thing is that if traditional media companies stay as they are, then there will be casualties. They need to prove they are not just about print, but are true multimedia companies. As far as the Telegraph is concerned, print is still vital, but it is just one part of the mix. Mobile platforms have come to the fore. But we need to monetise the mobile space in a more structured way.”

One company that is working with print media companies to extend their digital offering is mobile agency Wapple. The company is helping Shortlist Media’s weekly publications, Shortlist and Stylist, distributed throughout London underground, urban metro centres and hotels, to hit its mobile-savvy customers. Adam Maxted, a consultant at Square Media Consultancy, currently consulting to Cellcast TV and Wapple, explains: “For companies in general, digital strategy needs to be crossplatform – print, mobile, web – reflecting the fragmented media market place – and also, as customers now choose how and when they want to reach you, each channel can appeal to different socio-economic groups.

For example, newspaper tabloids typically have a higher AB profile online than they do in the paper. Tablet apps will reach the higher income-earning consumers.

“Stylist and Shortlist are free distribution magazines, with digital extensions offered through their web sites and now they have added mobile web sites, which automatically redirect you if searching from a mobile device. Their model is to make money from ad revenue, targeting young urban commuters with good disposable income. To exploit mobile advertising, they have partnered with YOC who serve their banner adverts.”

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Maxted agrees that print media companies must look beyond the app. “In London, for example, there is a higher use and penetration of smartphones and tablets.

Then companies will typically use an app-focussed strategy, a good example being the Metro. But Johnston Press, one of the largest regional newspaper publishers, would tend to adopt more of a mobile web strategy as a higher proportion of their readers will be using older feature phones compared to the latest smartphones.”

One way that this is being done is to use the digital and traditional channels to actually sell things. In August, Mobile Money Network announced it was working with Associated Newspapers to develop reader insight and create new revenue streams using its instant checkout technology. The partnership allows ‘Mail Shop Instant Mobile Checkout App’, powered by SimplyTap, to enable purchase directly from the Daily Mail and the Mail on Sunday, dedicated shopping supplements, the Mail Shop online and from within the app itself, using the in-app Marketplace.

Nick White, marketing director of Mobile Money Network, explains: “We see mobile as the glue between print and digital rather than just another channel. Kevin Beatty [CEO of A&N Media] had this vision; people are on the Tube with a smartphone and a Metro, inspired by what they see, but they can’t engage and respond. It is frustrating for the advertisers and publishers, because they don’t really know about their readership. But smartphone and digital can bridge that gap.”

White explains that there are several ways to sell from print and online depending on the client. MNN uses image recognition and QR codes with Carphone Warehouse and Thorntons. With Associated News, however, MNN embeds an alphanumeric code and a QR code in print. It allows the reader to either tap in the product code or scan the QR code that will take them straight through to checkout.

White adds: “We are finding new revenue streams for advertisers and publishers – that is massive. It is not just building awareness but it is now transactional.”

PRINT However, Jamie Walters, Metro’s product development director, also sees challenges that must be overcome to create new revenue streams through advertising. “One issue is the cost of producing those ads,” he says. “They are expensive to produce and overall the reach across the market as a whole currently is not as big as it is through other media. At Metro, we see it as our responsibility to provide cost-effective yet engaging creative to help our advertisers experiment within this environment, which is something we have done for a number of clients. There is some simple animation that can be data light, cost-effective and very engaging.”

Advice and education of advertiser and agencies by the print media company who knows its product and readership the best, is essential. Telegraph’s Challinor says: “We are helping to educate advertising agencies through roadshows, master classes etc. This is important as traditional print buyers are being told to use mobile/digital so we teach them how to do it.”

Challinor is excited by the possibilities of engagement, on the client as well as the consumer side, that rich media has brought into the mix. He says: “New technology, such as augmented reality, brings print to life. It is something the TMG are offering clients as part of a multimedia campaign. You show clients what you can do with AR and their eyes light up. We have sold two or three campaigns using AR as a key component – one is for Citroen and the other British Lions.”

Blippar is one of those companies that can provide the stickiness and innovative advertising that print media companies and brands crave. Blippar is the world’s first mobile augmented reality and image recognition platform enabling advertisers to reach consumers via newspapers, magazines, outdoor ads and billboards.

Jess Butcher, CMO & co-founder, of Blippar explains: “Image-recognition technology is truly game-changing for the printed format. It offers a new medium for instant content delivery ‘off’ the page, enabling it to jump to life with timely, interactive content experiences for the reader, whether it be a video related to the story, an opportunity to buy the products on the page, ‘visiting’ the travel destination, or magically revealing the crossword answers. We fully expect an imminent future where newspapers, magazines and catalogues are routinely read phone-in-hand.”

Blippar has worked with a number of print publications including The Guardian, The Daily Telegraph, Total Film, Sport magazine to name but a few. But the figures for Stylist’s Olympic edition make impressive reading and shows a publication that invested in the concept by converting a large percentage of pages into ‘markers’ for interactive content. Detailed analysis reveals excellent usage figures from Stylist’s readers.

In the seven days post publication, more than 26,500 unique users used Blippar to unlock the pages – 7% of the magazine’s total readership – and on average each person used 5.8 blipps each, which equates to a staggering 152,863 blipps in total. Out of the magazine’s 64 free pages, 21 were turned interactive. Repeat blipps were

high, with 71% of users blipping more than one page.

Data capture is crucial for any print media company serious about embracing digital. That loyal customer is key to media owners’ ongoing success. The more they learn about how, when, where and what content they engage with, the more chance there is of success, the wealth of data also brings its own headaches.

Conrad Bennett, VP of Technical Services EMEA for analytics company Webtrends, who were instrumental in helping the Telegraph understand its iPad users, said: “There are many more opportunities for collecting and analysing data. The problem with some print media companies is that they are not used to having feedback on how people interact. By understanding how people are consuming content, we make changes.

But companies must have a clear idea of what it is they want to measure once they have the data and who is going to sit down and improve things. It still requires a lot of effort.”

MNN’s White insists data capture is a big part of the partnership with Associated Newspapers. “When customers join, they register their name, address and payment details, plus, once they have given us their postcode, there is other third-party data that can be used,” he says. “In time, transacting using content and newspapers, you build up a history of transactions right down to the product level, and what else people are looking at. We assimilate this information in order to gain more customer engagement, more cross-selling and up-selling – but at the end we provide the information to the client and help the client.”

For third-party content providers these are exciting times, but the challenges is to adapt to them and find the right opportunities to exploit. “Opportunities like mobile couponing, which would be location-based, teaming up with specialist voucher providers,” Maxted says. “It is likely that popular premium content areas like dating and gambling will be added to such sites in future, where it is all about acquiring new customers and third-party brands being prepared to pay for them.

Maxted believes that “there is also a premium opportunity for up-sell, where traffic could be redirected by linking from a media title’s mobile website to a gambling or dating brand’s site and the media title would be paid for the click-throughs, or on a CPA basis. It is all about matching the relevant premium content to the audience of the mobile site and offering compelling, convenient proposition that can be experienced now”.

Consumers are hungry for fresh, innovative, compelling and interactive content and if they can’t find it at one company many will happily try another. There is no point in a business dipping its toe in the digital waters, it has to plunge in, no matter how scary it might seem.

That is not to say jump blindly, new opportunities in data capture means that print media companies with even the most basic digital offering can obtain data that will be crucial in developing a digital strategy for the future. telemedia issue 31

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TV

The Second

Screen What comes first: revenue or land grab?

Everyone is watching TV while fiddling about with a smartphone but how can media companies, advertisers and the telemedia industry tap into the second screen phenomenon and make some money?

Nick Moreno, head of market intelligence, Red Bee Media offers his analysis

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telemedia issue 31

T

he broadcasting industry is, quite rightly, getting excited about the potential that second screens have for delivering content to viewers. The trend is fuelled by the increasing penetration of smartphones, tablets and other connected devices, for which all the major research companies forecast significant growth over the next few years. That’s getting companies worried or excited, depending on your point of view.

But threat or opportunity, the key question that keeps raising its ugly head is: just what revenue will be earned from content delivered over second screens, and how will it be earned? There’s money to be made (or lost) in those darn second screen hills, and the traditional broadcast players don’t want to miss out on the gold rush.

But speak to five different people in the industry and there are five different opinions of how money might be made. All-you-can-eat subscriptions versus pay-per-view versus ad-funded versus e-commerce opportunities. Of course this assumes that the second screen is used directly for viewing content but, as Zeebox and others are betting, it doesn’t have to be this way, and the second screen can provide added value while watching simultaneously on the first screen/main TV. It’s interesting to see how some people respond to the issue of second screen monetisation. Quite often the people most vehement about one revenue model or another are those who have legacy first screen business models to defend, or who are new OTT players who have made a substantial bet on how best to win revenue.

There’s nothing wrong in having strong views one way or the other, but the undisputable fact – until someone disputes it – is that the second screen phenomena is still in a very early stage. Figuring out the best way to monetise second screen viewing is not something that can be definitively answered now.

Indeed it could be argued that it’s a question that doesn’t need to be answered at all, as many different revenue models may well be able to exist at different businesses at the same time.

Or put another way, figuring out now how to monetise second screen content viewing may be the wrong way to approach the challenge of second screens.

Of course some people say that for all their popularity with younger demographics and the technically savvy, or rich – at least until the Kindle Fire, a cheaper version of the iPad or the Microsoft tablet is released in the UK – they take up a limited slice of people’s time, and nowhere near the amount of time spent on linear viewing. That’s true, but as the analysts and research companies say (and their predictions always turn out to be true, don’t they?), second screen usage will only increase, and it makes sense to figure out a strategy for your business now.

TV While the penetration of second screens is rising all the time, in that respect it strikes me that this period is very similar to the early days of the internet, where nobody knew much about how monetisation would occur, but that surely it would occur given the rapid growth that was happening.

That’s why there’s much to be said for the philosophy of forgetting about second screen revenue – this is a land grab, and what’s key is getting viewers into the habit of viewing your content on second screens.

And that’s all that matters. Get people watching your content on your broadcast-quality online video player or TV Everywhere offering – it’s eyeballs that count and nothing else at this moment in time. 20 second pre-roll adverts that may or may not be skippable? Forget about them. Registration processes that take more than a nano-second to complete as a viewer? Bin them.

Content is king and will always be king, so get your precious content out there in a professional, easy-to-view way for viewers and you’ll reap the revenue rewards in the long-term. Yes, Netflix is cheap in the UK, but the content it offers is not a patch on what’s available on linear channels.

I know that at this point people will be shouting out – what about our valuable content, what about rights issues, what about this and that? Viewers care nothing about those issues. They have a growing

appetite for viewing content on the second screen, and whomever can provide it – legally or illegally, paid-for or free – will find an audience willing to consume. I’m not saying put all of your most valuable content out there for free, but put as much content out there as possible. Make people love watching your content on the second screen.

The early internet pioneers cared little about revenue. I used to work at a venture capital fund at the height of the late 1990s internet boom and almost every revenue model that was put forward turned out to be wrong. Fair enough – a lot of companies that came in at the top of the bubble went bust, but I’d argue that many, if not all, of those companies that came through the dot-com crash of 2000 and are thriving today were not those that fretted about revenue models, but those who focused 100% on providing what people wanted.

They just gave people what they wanted and how they wanted it, and the losers in the race for eyeballs faded away, never having to bother about how they could monetise users since they no longer had any.

I know it’s not as simple as that for broadcasters and platforms with legacy first screen revenue models and long established ways of doing business, but if the second screen trend is considered from a land grab point of view, then new approaches to, or strategies for, the second screen may become apparent.

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tv

Get smart, get connected

W

hile consumers have gone mad for second screening, the next stage in the development of TV as we know it has quietly got underway.

Connecting TV to the web is a no brainer, but it shifts how TV is consumed, how advertising works, how apps developers think and how online and mobile commerce operate.

According to Juniper Research, the number of residential TVs connected to the Internet via different platforms such as Blu-ray players, set-top boxes and consoles, and also via built in wireless or Ethernet connectivity, will reach almost 650 million by 2017.

The analyst also finds that Smart TVs are becoming mainstream amongst consumers, similar to smartphone and tablet adoption. Even though the replacement cycle of TVs are longer than for, say smartphones, the report forecasts strong growth over the forecast period.

“What things like Google TV offer is a way of targeting advertising, apps and services very closely at consumers so that it is relevant and what they want,” says Sri Sharma, MD of NetMediaPlanet. “Having Google involved suddenly means that there is a whole lot of data being brought to bear on ‘TV’ advertising that wasn’t there before, and this will have a huge impact on how advertising works and how apps are developed for TV – for all platforms, with TV included – and how ‘couch commerce’ may pan out.”

Google TV – which is an early entrant to market, but clearly shows how this may work if others like Apple and the like enter the fray – puts YouTube very much at the centre of its offering, but as it starts to attract more users it will start to be able to pull in more advertising and more apps developers.

According to Sharma, this in turn will see retailers, brands, media companies and everyone else developing offerings for TV as well as for smart devices.

“So far, connected TV has failed to attract significant advertising revenue, in part due to the fact that reach is low and, because it is currently difficult to measure content consumption,” warns Emma Wells from TV content discovery software company TV Genius. “But with BARB’s [Broadcasters Audience Research Board] announcement that they are going to start measuring TV viewing on the web, tablets, and laptops, this is a problem that will probably be solved this year. As a result,

connected TV advertising could take off this year.”

So, what will connected TV advertising look like?

Connected TV places the world of online video on the TV screen. Online video offers a new platform for a new form of advertising. In May 2011, Hulu’s OTT service generated the highest number of video ad impressions, 1.3 billion, out of the total of 4.6 billion video ads viewed by Americans. Additionally, online video viewers actually have a much better recall of advertising; 53% of consumers find online video ads less annoying than during live TV – indicating real potential for growth.

Second screen will also be a huge player. 70% of tablet owners and 68% of smartphone owners use their devices while watching television. But the tablet isn’t a threat to TV – instead it offers a new channel for targeted, personalised advertising.

According to recent research by Yahoo!, two in five consumers say they are interested in content relevant to the commercials they see. Since many connected TV’s are being built with the ability to interface with the second screen, advertisers will have the ability to easily know what is playing on the TV, and offer related content.

Connected TV brings this interactive advertising much closer to reality, with TV apps, and the ability to add services like Fling to the hardware. Yahoo! is pioneering broadcast interactivity on their connected TV sets that automatically detects what a viewer is watching, enabling publishers and advertisers to deliver content and commercials tailored to that viewer’s interests.

With broadcast interactivity, TV programmers can engage and retain viewers in a whole new way. They will be able to create TV apps that let viewers vote for a reality TV participant, get more information about characters, play related games and videos, or make e-commerce purchases while watching a show.

With $6.50 of every $10 of advertising budgets spent on television, it’s clear that TV remains the most important and cost-effective advertising channel for companies looking to reach massive audiences. But as connected TV reaches the mainstream, expect to see TV advertising transformed.

The real power of connected TV lies in its ability to fit into the transmedia ecosystem, allowing TV advertising to evolve along with the fast-paced world of technology.

While second screening is the trop du jour in media circles, web-connected TV – and the apps that can be built on them – looks set to usher in a new wave of interactivity around both TV and the web.

Paul Skeldon tunes in

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All grown up

adult

28

The adult industry, once a sure-fire money maker, is feeling the pinch online, but as tastes and attitudes change, mobile adult is finally starting to gain ground and make some money for both the telemedia industry and the adult content providers. Paul Skeldon reports

G

iven human nature, who’d have thought that the adult industry would ever face ‘hard times’? But thanks to the confluence of recession, new technology and the tendency for everything to err towards free, things aren’t as great in adult land as they once were.

Unless you are looking at mobile.

As with mobile gambling before it, we have been talking about the rise of mobile in adult for many, many years. But, mirroring gambling again, adult on mobile’s time seems to have finally come.

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Many of the drivers are the same: the devices and connectivity are there to make this very visual medium work. Costs of data are also driving it. But there are many other, perhaps more subtle, forces at work with adult.

Currently, Juniper predicts that mobile adult will be worth $1 billion by 2015, with mobile video traffic accounting for 69% of all mobile data traffic by 2014, according to Morgan Stanley. Right now it is starting to grow, driven by the fact that adult content providers can charge for mobile services, where a lot of revenue is being hammered by free ‘tubes’ online.

But the other forces at work here include a shift in how mobile adult is marketed and who it is being marketed to. While hardcore porn, sex chat and video chat – including interaction with adult TV services – are largely still the preserve of men, there is a growing move to try and market adult services at couples and even women: the 50 Shades of Grey effect (see page 30).

And much of this mobile adult growth is coming from video and tablet use, suggesting that the way adult content is being consumed is changing – but that it is also driving all forms of mobile adult services.

The growth in the tablet user base will cause the number of users of mobile adult video content on tablets to triple by 2015, a new report from Juniper Research finds. This trend is repeated across all forms of mobile adult content on tablets with the number of mobile adult subscribers and mobile adult videochat users also tripling by 2015.

But Juniper admits that there are barriers to the growth of mobile adult services. While the numbers of users accessing mobile adult content on tablets will grow rapidly, the fact that a significant proportion of tablets are shared devices will restrict growth. The move towards ‘multiscreen’ experiences also means that consumers may be reluctant to purchase content solely for the tablet. In some regions, legislation and social attitudes towards adult content will also restrain the growth of the mobile adult industry.

Despite the many restrictions to growth, the adult industry is forecast to generate significant revenues from tablet devices. Tablet owners are generally more affluent than the average user, and are more likely than smartphone users to own a credit card – even in emerging markets. This means that tablet users are likely to spend more and more often on mobile adult content than the average smartphone user.

According to report author Charlotte Miller: “Tablets combine the privacy of a smartphone with a large screen, particularly suited for content consumption. It is clear that, as with many other types of content, users

adult of mobile adult content will want to access content on their tablets as well as on smartphones and PCs.” And there is another good reason to shift from PC to mobile. More than a third of adults in the UK would support a mandatory block on adult websites a survey commissioned by Recombu Digital for The Daily Telegraph found.

Only 6.7% of respondents admitted they would ask for porn filters to be removed from their accounts, while 13% indicated they would not opt in to see adult materials.

While the UK Government is currently carrying out a consultation on the matter – opposed vigorously by the majority of ISPs – the poll of 2,000 adults in the UK found that about 25% of respondents join internet service providers in opposing such a plan. But 37% were in favour. A further 18% declined to state their position.

The British government has asked the public whether broadband ISPs should be forced to block any content at all. If consumers approve of automatic blocking, the government also wishes to know what kinds of materials should be blocked and under what circumstances individuals might be allowed to unblock part or all of the restricted material.

With existing protections on mobile from operators this could be a boon to mobile adult. That said, with increasing use of wifi – especially at home, through an ISP – there may yet be more hurdles to leap to make mobile adult fly.

What is mobile adult?

This typically consists of SMS chat and adult jokes. SMS chatting is a prominent but declining mechanism for the delivery of adult material and is closely linked to PSMS for the sending and receiving of messages – and for the billing of subs services. Its biggest pro is that it works with any device, but smartphones are starting to end its reign as the once mainstay of adult mobile.

Images Adult content offered by operators often features animated or plain images of porn stars and celebs, although all sub categories such as amateurs, teens, lesbian, gay and fetish are all starting to become much more prevalent as they are on the web. You name it, you can get images of it. It is typically billed using PSMS, but also through subscriptions and online card payments.

Erotic Games Typically adult-orientated versions of existing mainstream games. For example, poker games are often adapted as strip poker games, requiring little modification by developers. However, adult content is restricted by apps stores so content here is not a prevalent as it was a few years ago.

Video services Adult video streams are offered as standalone services, as add-ons to mobile adult TV services and digital TV services, website subscriptions and the like. Video chat is also being added to these services, as well as being rolled out as chat services in the more racy end of the chat and dating market.

These more ‘personalised services’ are high value and lucrative right now.

Mobile porn 2.0 Defined by Juniper Research as the mobile adult extension of m-web into UGC and social based services these are the mobile extension of online tubes and are an attempt to try and monetise these often free services.

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adult

Fifty Shades of Success for Adult Mobile

Julia Dimambro, founder and CEO of Cherry Media argues that understanding the 50 Shades of Grey phenomenon is the key to understanding how mobile adult services are going to make money as women take control

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he opening ceremony of the London Olympic Games was, in part, a monumental celebration of all things British and more specifically, anything that had firmly put Britain on the map. Four decades of amazing musical history was featured as was Tim Berners-Lee, the original inventor of the World Wide Web, whilst Harry Potter author, JK Rowling, delivered a reading about Britain’s amazing body of children’s literature.

Nowhere in this cavalcade of ‘feel-good Britain’, was any credit given to the English authored and fastest selling paperback of all time: 50 Shades of Grey – a British marvel that has taken the world’s female population by storm, as well as the male population, but not necessarily for the same reasons, to become a global phenomenon in less than six months.

Unless you’ve been living under a rock, it will have been impossible to escape the media frenzy and bandwagon sensation surrounding this amazing novel. Not because of its literary credibility, but because of the sheer impact it has had in bringing what is effectively ‘porn’ into the mainstream spotlight in such a spectacular way.

Adult entertainment, and more specifically fetish, domination and sex toys are now not only cool, they are one of the most talked about and discussed topics

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of the day. Hurrah!

It is reported that the author of 50 Shades of Grey, middle class, British mum of two, E L James, is now making $1 million a week from her erotic trilogy and on the same day that ‘Team UK’ broke its gold medal record for the last 100 years, 50 Shades of Grey became the fastest selling paperback of all time, swiping this accolade from the likes of Harry Potter and the Da Vinci Code.

So great is the consumer ‘spell’ of this book that a hotel in England has replaced in-room bibles with this erotic bestseller in the bedside drawer.

Why this book and not hundreds of others that have been written along the same thread has become so big remains an enigma. Most people will tell you it’s not only badly written, but it is also poorly edited and the book’s central character, Anastasia “Ana” Steele, a 22-year-old college senior who is still a virgin, bites down on her bottom lip with such regularity, that it’s a miracle it’s still on her face.

One of the very first discussions I had about this book was with a mobile exec, responsible for running one of the most successful on-deck adult channels in the UK and he highlighted a point that has stuck with me as this tale of social contradictions unfolded - women secretly long to be dominated and bossed around by men, especially in the bedroom.

adult As a female owner of a business that sits between two male-dominated industries – Mobile and Adult - it made me wonder how and why this book is highlighting larger social topics for the world’s female population.

For quite a few years now, we’ve been shouting about ‘having it all’. Generation X women (this is where I sit, without wanting to give you an exact age) were the first generation not expected to stay and home and raise a family like our baby boomer mothers before us.

Most of the world’s top female executives are married, have children and continue to ‘manage’ the household. When I say ‘manage’ I mean in terms of organising what needs to be done, who needs to do it and ensuring it’s completed to keep things moving along as they should.

Every minute of a woman’s day is about having things under control, ‘on the list’, delegated or done.

Our entire lives are about project management – whether personal or professional, big or small. It’s a part of our genetic make-up.

So I find it quite easy to appreciate any women’s subconscious desire to have a man take (total) control once in a while, and the bedroom is a safe environment where they can finally let down their ‘in control’ façade and just lie back and be told what to do without having to think about it or organise it. It’s like a little holiday from all the remembering, actioning or delegating.

Talking with various ‘mobile mates’, I get the feeling that although it’s probably not the main factor for its success, 50SoG delivers something for this subconscious desire within the context of total fantasy.

Is it a simple form of escapism from the slightly offtarget results achieved in our quest for ‘equal rights’?

Did the book maybe tune into a current feeling of overkill in the equality battle for females around the world?

The book’s social and sexual impact is so potent that it’s reported to have put the spark back into thousands of lacklustre marriages, not only in terms of stimulating more interest in sex from the gals, but also adding a little dash of kinkiness to marital bedrooms all over the world.

Even more remarkable, the global stampede back into the bedroom for coupling rather than sleeping purposes is even set to impact the global birth rate. Professor Ellis Cashmore, expert in Culture at Staffordshire University, predicts a spike in the number of new-borns in the next year as a result of the book.

He said in an interview with Mail Online: “With the millions of copies it has sold – it makes complete sense to assume that in nine months’ time we are going see a baby boom.”

And if you think the professor is off his rocker, then just check out the parenting websites, where expectant mums have been boasting in hoards that they have fallen pregnant with ‘Fifty Shades Babies’.

Social e-BDSM: One of the overriding contributors to the book’s success has undoubtedly been social media. ETO magazine reported that 50SoG has been responsible for more online ‘OMGs’ than Object Management Group, Oxford Metrics Groups and Omnicom Media Group combined.

Combine this with the fact that e-books devices provided the opportunity for women to indulge in erotic literature without others around them noticing the title and you have a winner. 50SoG can also add a considerable surge in e-book sales to its list of accolades.

EL James’s agent, Valerie Hoskins said: “In the 21st century, women have the ability to read this kind of material without anybody knowing what they’re reading, because they can read it on their iPads and Kindles.”

As a result, physical and digital versions are neck and neck in the US in terms of sales, with 50 Shades publisher, Vintage, having shifted 9.8 million paperbacks and 9.6 million e-books in the US up to July this year, according to the according to the Wall Street Journal.

There’s no denying that word-of-mouth and social networks have played a huge part in the book’s astounding success. Patricia Bostelman, vice president for marketing at Barnes & Noble noted that “Conversation about the book online has fed many of the sales and it very clearly demonstrates what the blog network can do,” she said. “The word-of-mouth so thoroughly outpaced the availability of the book.”

The New York Times commented that women were saying that the book had gained a huge following amongst work pals and it was really the first erotic novel they have ever discussed publically, whilst Lyss Stern, founder of DivaMoms.com said “It’s taboo for women to admit that they watch pornography, but for some reason it’s okay to admit that they’re reading this book.”

Prim and Proper Porn This social acceptance of the book’s hardcore fetish themes amongst the female population means that it has permeated all walks of life. Previously prim and proper, middle-aged Facebook acquaintances are now bragging about their progress through the book’s content in a remarkably candid and almost proud way.

A friend of mine who works as a primary school teacher in the UK was telling me that her 60 year old work colleague was exclaiming how much she was enjoying 50SoG. Mummy porn has been coined to describe the 50SoG phenomenon, not because it has anything to do with mummies ‘doing’ porn (as one of my gay friends asked last week), but because it’s this generation of women that appear to be the biggest buyers of the book.

As EL James herself says “my books are romantic fantasy stories, which offer women a ‘holiday’ from their husbands.” Cheers to that.

But maybe it’s the business impact that has been one telemedia issue 31

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adult of biggest surprises of all with this novel. The world of adult entertainment, whether you approve or not, is now firmly lodged in mainstream media and literature and although those of us who work in the industry were only too aware of the huge demand for erotic and adult material, never before has it received such open media attention on a global scale.

More surprisingly still is the overwhelmingly positive media attention it’s receiving. As I said before, not necessarily for the literary talent of the books themselves, but more in terms of 50SoG creating one hell of an enviable success juggernaut, and so amazingly fast. It really is the stuff that entrepreneurial dreams are made of.

The book’s own success is having a commercial benefit for anything and everything featured within the storyline, most prominently the ‘sexual accessories’ used by the book’s leading male character, billionaire and sexual dominant, Christian Grey.

New York’s Babeland sex shop has reported a 30% sales increase in the last few months, and visits to the bondage section of their website have increased by an astounding 81 per cent. Focus has been predominantly on sex toys and other BDSM items explicitly described in the book.

But it’s not just the obvious ‘sexual accessories’ that are benefitting from the book’s avid following.

Hardware stores are also enjoying commercial benefits.

One story that’s gaining considerable online coverage is the increase in sales of rope.

After seeing a sharp increase in requests for cotton rope in his Pennsylvania hardware store, Bob Wipplinger’s wife pointed out that it was probably due to the Christian Grey character in the book using the exact same kind.

More curiously still, Brandon Wade, founder of sugar babe dating site, Seeking Arrangement told Business Insider that of the 1.6 million Seeking Arrangement profiles the term “Fifty Shades” is mentioned on them 28,382 times, Christian Grey is mentioned 23,102 times and Anastasia Steel is mentioned 18,281 times. He claims that 186,000 female members are actively seeking a “Christian Grey” type arrangement.

What can we learn from 50SoG? Interestingly, the phenomenal success of 50SoG has probably less to do with the book itself and its controversial contents, then with a combination of modern day factors that have all contributed to it being in the right place, at the right time, with the right offer and most importantly with the right platforms to spread the word at lightning speed.

Why 50 Shades of Grey and not the array of other similar erotic novels that didn’t even make the ‘midshelves’ because once they were considered ‘too risky’? Because social networking, tablets, kindles and Facebook didn’t have the same social predominance previously as it has in 2012. Would the trilogy have been as successful as quickly if it had been published

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in the mid-nighties? I think not!

In a new world where we all want to be 50 shades of something, a global phenomenon of this scale holds two important points for those of us working in the mobile and/or adult industries.

If I had a euro for every time I have spent convincing companies that there are means and ways to benefit from consumer demand for erotic and adult entertainment without negatively reflecting on their brand or service, I’d be as rich as EL James right now.

This novel has firmly shouted to the world that it’s not what you offer, it’s how you offer it that beautifully bridges that gap between what is and what isn’t socially acceptable on a HUUUUGE scale!

This article should be a screaming advert to every mobile entertainment company out there investing in marketing and/or traffic for videos, images and apps that there is a huge additional revenue stream to be had from mobile erotica if offered and promoted in context with both consumer desires and the neighbouring environment.

But it doesn’t have to be explicit to be erotic.

Understanding this statement could offer many companies almost immediate additional revenues right now!

Female Porn Power As you can imagine, over the years I have been asked so many times about adult entertainment for women and what form it should take. One of the things I would always discuss was the erotic literature. Men are more visual when it comes to sex, women like to use their imagination and find out what’s behind the visual exterior.

I normally use the example of a bar. If a man sees a woman in a bar, he normally only has to look at her to know whether or not he wants to have sex with her.

If a woman sees a man in a bar, she might think he’s cute, but she’ll have to talk to him for a while to find out if he’s an idiot or not before deciding whether she wants to take it further.

Us gals may not have quite got it right on all levels yet when it comes to real equality, but we’re still very much coming out of the kitchen with a disposable income of our own and new freedom in sexual expression and that, my entrepreneurial friends, is something worth looking into!

The bottom line of all my rantings? Adult entertainment is taking on new forms, creating new audiences and most importantly new economic opportunities that just weren’t there 5 years ago!

Meanwhile Tube sites and illegal licensing are eroding online sales. Mobile devices are bringing new means of immersive fantasies to new audiences and it doesn’t have to be overtly ‘porn’ to generate millions of dollars.

Plus, if you get it right, there are almost endless possibilities for ‘knock-on’ merchandising. Yes, the future’s bright for adult entertainment, albeit with a dash of Grey.

adult

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igures from PhonepayPlus seem to bear out the affiliation between chat and daters and social networkers. The regulators’ annual review of the market, Current and Future Markets for PRS, 2011, show that last year 23% of premium rate service users discovered the service on social networks, compared to just over 4% in 2010.

One company that has dipped its toe into the chat and dating market is SOA Networks with Tick and Snap. It is billed as the ‘anonymous pairing app’ and combines a strong element of social media to the dating phenomenon.

The app allows a user to browse their phone book and Facebook contacts, ticking everyone to whom they are attracted. If both users tick each other there is a ‘Snap’ and the interested parties are notified. If there is no match, the user remains anonymous, avoiding any awkward moments. When ticking a contact the user also has the option to leave a clue – adding an element of fun and intrigue.

Sam Seller, director of SOA Networks, explains: “Tick and Snap is very different from other dating offerings, where you talk to people you don’t know. Everyone, everywhere has a contact in their Facebook friends’ list that they fancy. The app acts as an icebreaker and because it is anonymous avoids the element of rejection.”

Seller takes the long-term approach to monetising the app. “Our strategy is to grow things before we start charging money. At the moment, it is free to download, but you can make money through I-ads, which you are paid per click.

“The only thing we are charging for at the moment is if the user leaves a clue, the receiver has to buy the clue for 69p through the in-app purchase on the Apple Store.”

Zoosk is one of the big players in online dating. It bills itself as the ‘romantic social network’ and claims to have 50 million registered users. The company has also embraced social media, cleverly positioning itself so that it can be accessed either by the main site or through apps on networks such as Facebook, Bebo and MySpace.

TheComplete.me is another dating site that has borrowed elements from social networks to make its proposition more appealing. Its USP is the FraME, which lets users express their interests and hobbies visually, on the same principle as a Pininterest board.

Social dating is about bringing together elements from different platforms to provide that engagement, sense of community and stickiness to make the site fun to access and interact with.

Will Douglas, business development manager of xonadu, whose flagship product is a premium SMS peer-topeer dating service with real users, does not see social media as a threat.

“In spite of the myriad ways to date and connect that did not exist a few years ago, xonadu’s SMS chat and

Chat, dating & social media A match made in heaven… dating thrives. In fact, social media has opened up new ways for re-sellers to promote our white label SMS services. Media like Facebook adverts and promoted tweets can drive consumers to a text-based product even if it means coming via a Facebook app, web app or mobile app.

“Ultimately, consumers still attach a premium to receiving a text message on their phone from somebody they don’t know. On our dating service, the peer-to-peer SMS conversations that unfold are immediate, addictive and often more intimate than anything dating site messaging services provide. It’s a hit for most of our users which goes some way to explain why our ARPU figures are in rude health and why were in talks with dating clients about integrating our peer-to-peer SMS into their websites.

“In terms of adult operator based virtual chat, it seems there will always be a male consumer demand for this kind of service. No other dating service can provide instant adult content straight to the SMS inbox of a mobile.”

Douglas does admit, however, that there could be some regulatory issues that arise from the increase in social media. He said: “Social media does bring with it regulatory issues that from a white label perspective we are very aware of – rogue re-seller tweets, or unscrupulous ads failing to explain pricing and terms and conditions are something we’re anxious to avoid. But proper due diligence in the first place should eradicate this kind of behaviour.”

Douglas insists what has worked for xanodu in terms of embracing new technology is “device agnostic web apps rather than enduring development costs and approval lead time of mobile apps.” He adds: “We’ve increased the number of women on our dating service with a free web-to-SMS web app – ‘Chirps’ – which allows female users to send free messages to the phones of our male users.”

One new innovation that could make a difference to the health of the dating industry as a whole by enhancing trust and safety, is SafeKnight. The creator of the app, Chris Hawthorn, has poured £45,000 of his own money into the product.

Moved by the abduction and murder of Sian O’Callaghan after a night out in Swindon last year, Hawthorn wanted to find a preventative measure for people who find themselves in a vulnerable position, perhaps after meeting someone on a dating website or through using social media.

… or mortal enemies?

Matthew Leach looks at how social media has changed the chat and dating landscape and what it means for the adult telemedia business

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Advertising

On

message

Mobile advertising is finally starting to gain some traction with consumers, with many people preferring it as a text or MMS message than anything else… and location is proving to be key. Paul Skeldon reports

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esearch into UK consumers has revealed that 45% of are willing to accept branded communications via mobile if delivered according to their opt-in terms – a figure that rises to 55% if the company is perceived as a ‘trusted’ brand. And retailers are among the most trusted, giving them an early adopter advantage in the mobile marketing space, finds research, commissioned by Velti, and conducted by MobileSquared.

The study found that a UK consumer will sign up to receive communications from on average just three companies, making first-mover advantage critically important for brands hoping to exploit this lucrative mobile marketing channel. And who are those trusted brands? According to the study retailers (25.6%), financial services firms (16.9%) and travel companies (16.5%) are all well positioned to be a ‘trusted’ brand and exploit the mobile opportunity.

The study also finds that UK consumers are open to frequent mobile marketing messaging – 37% of respondents are open to receiving messages from a

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chosen brand on a daily basis versus 24.6% who prefer a monthly message. Some one in four UK consumers (24.5%) would like to receive branded communications at anytime (weekday or weekend, morning or afternoon).

“The research we’ve carried out challenges perceived mobile marketing thinking and puts consumer demand for marketing ahead of supply,” says Barry Houlihan, GM, Velti. “In fact, UK consumers are far more open to branded communications than many companies believe – provided their delivery preferences and opt-in choices are respected and the brand earns the all-important trust of the consumer. Mobile is increasingly central to any branded communications strategy given its real-time results and relevance across multiple delivery formats. It is clear that the time is now for brands to innovate and explore the business benefit it brings.”

Perhaps one of the most surprising findings of the research is that many consumers seem to like simple messaging – SMS and MMS – as the medium to receive these ads. Velti/MobileSquared found that 36.9% of consumers prefer to receive messaging on a mobile (SMS – 24.3%, MMS – 5.1% and mobile optimised email – 7.5%), whilst 78.3% prefer email. Yet we know that emails are increasingly being opened on a mobile device (in excess of 20% and growing rapidly), therefore it is vital that these brand communications connect the end consumer through to a fully mobilised experience.

Three quarters of consumers will now take action after seeing location-specific mobile messages, with 80% of those responding best to local information, the latest quarterly Mobile Audience Insights Report from JiWire in the US.

Advertising The top three actions include clicking on locationspecific ads (31%), searching for the nearest location (21%) and/or conducting additional research (21%).

Behaviour further varies by smartphone device type.

After clicking on an ad, iPhone users are most likely to conduct additional research (22%), Android users search for the nearest location (25%), and Blackberry users immediately make a purchase (21%).

“It is exciting to see how important location-specific messaging is to consumers today,” says David Staas, senior vice president of marketing at JiWire. “As the on-the-go audience demands locally relevant information, brands need to focus on reaching consumers in and around their locations.”

This is backed up by research from Juniper Research which finds that the real growth in mobile advertising will come from location-specific mobile messaging advertising.

Juniper report author Charlotte Miller notes that: “Sending adverts using mobile messaging gives advertisers a simple, cheap and effective way of reaching consumers. Adding location technologies is an even more powerful proposition, particularly for transactional advertising as marketers can reach consumers who are near a location where they can purchase.

Knowing that the recipients of an ad have actively asked to receive it and will in all liklihood open it is also particularly attractive.”

SMS ads have significant benefits for marketers. While they may lack the rich media content of other advertising formats, they are very familiar to consumers and have a much higher chance of being opened, even if unsolicited. SMS ads are also a low cost option for those seeking large reach; in the UK, for example, a bundle of 1,000 text messages costs around £0.05 (8¢) per message, falling to around £0.03 (5¢) for larger bundles.

The idea of location-based SMS is something that is likely to raise questions of privacy amongst consumers. However, operators are extremely sensitive to this and the schemes which already exist, such as O2 More, are opt-in and the consumer can choose which types of offer they would like to receive. These types of schemes will become more common as operators attempt to look for revenue streams beyond voice and data but it is unlikely that schemes will become optout or compulsory.

But it is perhaps the proliferation of devices that is really driving the growing acceptance of m-advertising. Mobile advertising network AdMobi’s latest Mobile Media Consumption Report finds that, in the UK, mobile advertising influences 48% of consumers on their purchasing decisions. Compared to Q4 2011 more late-technology adopters are embracing m-commerce, and of those yet to use it, 45% expect to do so within the next twelve months.

Advertisers cannot afford to ignore the mobile opportunity, with the majority of the UK population now mobile data users with almost half acknowledg-

When social, mobile, ads and offers come together

O2 has launched a ground breaking new social media initiative seeking customer suggestions for brands O2 should secure for Priority Moments. Using its social media platforms O2 will be inviting shoppers across the UK to tell them which brands they would most like to receive experiences and money saving offers from.

O2 will use these suggestions to campaign on behalf of customers to create exclusive great value deals from the top brands via Priority Moments. The campaign marks the first time a major brand has used crowdsourcing to secure deals from other companies, on behalf of its customers.

Launched in July 2011, Priority Moments delivers money saving deals and enhanced everyday experiences from leading brands to O2’s 22 million customers across the UK. Since launch Priority Moments has provided O2 customers with access to over 3,400 offers from more than 300 brands across the UK, providing a total saving of over £7.5m. Recent offers have included some of the UKs best loved brands such as Ocado, HMV, Odeon, BHS, Toni & Guy and Accessorize.

The new campaign builds upon this success and uses it to help O2 to approach new brands on behalf of its customers. To suggest a brand, O2 is asking customers to tweet the name of the brand and/or deal they’d like to see using #o2prioritymoments, or to write their suggestions on the O2 Facebook page at www.facebook. com/o2uk.

O2 marketing and consumer director, Sally Cowdry, explains: “Priority Moments is all about creating great experiences and adding value for our customers. Now we want to take that a step further by asking them to tell us what brands they would like us to approach for new offers via Priority Moments. We recognize that times are tough and budgets are tight across many UK households so this is a further demonstration of how we’re listening to our customers and promising to deliver on their behalf. So whether it’s helping towards a family day out or providing extra value for a shopping trip we’ll be campaigning to provide more great offers for O2 customers.” ing the influence of mobile media in their purchasing decisions.

The increase in devices upon which mobile content can be pushed and engaged through appears to be driving this shift in behavioural purchases. The survey found mobile (48%) only marginally behind mainstream TV advertising (55%) and on a par with PC-based advertising (48%) as far as impacting purchase decisions.

This influence is directly relating to brand sales both on and offline, with a fifth of respondents stating mobile advertising influenced their subsequent in-store purchase, and 21% stating it influenced them to buy via their mobile.

“These results demonstrate that mobile advertising is finally, rightfully, taking its place alongside traditional content such as online and TV when it comes to directly influencing consumers’ purchasing decisions. The findings show that archaic perceptions of mobile advertising being intrusive are long gone, and as such is fantastic news for brands and publishers alike,” explains Lee Blyth, head of UK sales at InMobi. “The onus is now on brands and content agencies to build on this by creating compelling, engaging media to capture consumers’ attention and ensure the mobile can truly become the personalised platform we have all been hoping it will become.” telemedia issue 31

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Marketing on the move

How to make m-commerce work for you

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Everyone wants a piece of the m-commerce pie, but the real key to it is affiliate mobile marketing. Here Timo Ronkainen, global head of mobile, Tradedoubler lays out his four point plan for making it work

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etailers of physical and digital goods and services looking for new ways to drive revenue, secure competitive advantage and build relationships with customers cannot afford to ignore the potential of a European consumer mobile shopping bill of e14.6 billion by 2012 and the Forrester view that m-commerce sales are set to grow 40 per cent each year for the next five years.

To seize a share of this market, retailers need to understand the mobile landscape and how to make the most of it. It can be immensely difficult to know where to start, what to do and where best to invest resources.

Since introducing a mobile affiliate programme last year we have worked with advertisers to identify and define the essential steps required to get to grips with mobile commerce. Having developed successful revenue-generating campaigns for clients such as The Body Shop and Jessops, here are some of those critical steps.

tion – such as a bank or utility – may wish to focus in the first instance on providing high quality customer service over a mobile device.

It is also important to remember that the growing trend is for people to use more than one mobile device, including the growing use of tablets, in different places, at different times and for different things. For a mobile proposition to work it needs to interact seamlessly across all these platforms – a tall order today for many retailers.

Once you have decided exactly what you want to get out of your mobile venture, you can then concentrate on making sure it works for your users.

Step 2: Focus on functionality

What works for your online site, will not necessarily work on a mobile device. The need for a stripped down, clear, intuitive user interface cannot be overstated. The faster and easier a customer can get to the information they want on a mobile device, the more likely they are to complete a purchase. Frustrated cusStep 1: Get the proposition right tomers will, in the end, simply go to a competitor site The first thing retailers need to figure out is exactly or you will lose them partway through a sale. what their mobile objectives are and how mobile marTo decide on the format, layout and content of your keting and sales fit in with their business goals. There is no one-size-fits-all solution, no simple right or wrong mobile site you need to understand the devices your target customers are most likely to be using. when it comes to deciding what to focus on. Decisions Research suggests that most m-commerce today is need to be based on your target audience, the nature of your product and the type of devices you wish to focus undertaken on an iPhone, with the number of Android users increasing rapidly. iPads and other tablets are on. threatening to become the m-commerce device of For example, many organisations feel they have to choice over the coming years. This fragmentation of have an ‘App’, because everyone else has one. That is platform and operating system will only increase as not the case, it all depends on what your proposition smartphone and tablet ownership moves from the curis. A travel firm, for example, may opt for an App that rent ‘early adopter’ phase to become mainstream. Early serves more as a mobile brochure, with visuals and video links and other rich information; perhaps comple- adopters are much more tolerant of less-than-perfect sites and are often happy to work things out for themmented by a mobile-optimised website that focuses on selves. This is something that will change dramatically location-based services such as the nearest hotel, and when the less technology-minded mainstream audience offers transactional capability. comes on stream in the next few years.

A retailer with a strong offline presence may wish to Retailers also need to understand exactly what their use its mobile affiliate marketing to drive traffic to the nearest store, perhaps including special offers or incen- target audience uses mobile devices for. In a world of tives that can be redeemed in store. A services organisa- 24/7 media and instant communications, people turn

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marketing to their mobile devices for two things: to save time or to spend time. Saving time by buying train tickets on the go or spending time checking Facebook or playing games. Which of these behaviours is most relevant for your business?

other suppliers through a number of devices. For the retailer the challenge is to ensure they offer a seamless yet tailored service across all these platforms. Mobile must be part of a holistic marketing plan that includes online and offline channels.

Mobile commerce is the future. We are already seeing around six per cent of traffic coming from mobile Step 3: Drive and measure traffic devices, and with 6.7 billion devices expected to be After making sure that your mobile offering works and connected to the internet by 2014, the mobile market is relevant to your audience, the next step is to drive for retailers will only get bigger and more complex. traffic to your site or application – and to make sure Important contextual information about individual conyou can track and measure activity and flow. sumers, such as their location, demographic, interests You can drive traffic in a number of ways, for examand behaviours will enable retailers to give consumers ple by building an affiliate programme that encourages potential customers to click through to your site, bring- the customised offers they demand. However, marketers will need to ensure that every consumer can decide ing more traffic and transactions. If you have an App on how much personal data they are prepared to share. it is vitally important to get on to the ‘Top Ten Charts’ Security will remain a critical area. Some of these such as those on iTunes. This will expose your site to obstacles will fade over time as people become used to new potential customers. mobile purchasing; others will require concerted action.

In affiliate marketing, advertisers to need to work In the wake of this mobile storm, purchasing will closely with their mobile publisher network to implehave become a multi-device, multi-channel journey. The ment pay-per-click (PPC) campaigns that are adapted benefit to retailers will be a world where their products to how people surf using mobile devices. Our mobile and services are intelligently marketed to consumers’ affiliate program also includes our unique Application Download Tracking (ADT) that enables retailers to mon- personal devices, increasing the likelihood of conversion and purchase. For consumers, a world where they itor the success and ROI of their mobile App. can enjoy contextually relevant content and marketing about the products and services they really care about.

Step 4: Integrate everything One thing is for certain, however, sitting out the M-commerce is not a stand-alone channel. As mentioned above, consumers now engage with retailers and storm is not an option.

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openmarket.com/europe +44 20 8987 8855 Text sales to 88600 Email sales@uk.openmarket.com Copyright 2011 OpenMarket Inc. All rights reserved. OpenMarket is a business of Amdocs.

telemedia issue 31

37

Advertising

Germany Leading the way in

European m-marketing?

Mobile advertising is booming in Germany, with innovative new ways to tap into a very mobilized consumer base – and it is driving m-commerce.

Talya Shoup Burnett reports

38

T

he German mobile market is massive and advanced, and with over 51 million mobile users countrywide, it’s also the largest mobile advertising market in Europe in terms of mobile subscribers and revenue. By 2011, the country had already reached a mobile penetration rate of 135%, according to research agency BuddeComm. Additionally, a recent Nielsen study showed that mobile consumers in Germany are more likely than their American, Italian, or British counterparts to make a purchase on their PC after viewing an ad for a product on their mobile, proving that mobile is already proving to be an effective way to connect brands to customers in Germany.

Experts in m-marketing in Germany see interactive advertising – rich media, such as videos and games, geolocation ads targeted to users based on their location, and mobile couponing – growing in popularity in the German market, and they believe it will continue to do so, not only in Germany, but in other markets as well.

According to Sarah Christiansen, public relations manager for DACH (German-speaking countries), the most popular mobile advertising services in Germany are those which connect the consumer to companies.

She views rich media and couponing as popular marketing methods on mobile in Germany at the moment, as both give consumers a direct connection to companies advertising products and services.

“Users here in Germany are doing a lot on their mobile phones,“ she says. “They are playing games, comparing prices, and looking up information on their phones.” She also says that mobile users in Germany are also active on social media, using their mobile devices to keep in touch with their friends and network.

Location-based services are also popular on mobile in Germany, with users on mobile devices being able to find local shops and deals, made possible by advertising with geo-location targeting. With mobile, shop owners are able to benefit from the versatility of mobile and the ability to target potential customers.

“Mobile also gives the opportunity to connect mobile to brick-and-mortar stores, giving shop owners the opportunity to advertise with location-based advertising and digital couponing,” says Christiansen. “Companies such as Lokali, (a location-based app that will be based in Germany) showing users where last-minute food and

telemedia issue 31

drink deals are nearby, will make it easy for ‘regular’ businesses to benefit from mobile advertising.”

Heiko Kasper, director of business development for Sponsormob, also sees rich media as holding growing importance in the German mobile market. The actual connection from customers to brands, and brands to customers, makes rich media so attractive and extremely popular in Germany. “Rich media will soon be considered the standard, not something special,” argues Kasper, who sees growing interest in rich media, including games and videos.

Real-time-bidding (RTB) for mobile is also something that Kasper sees growing. Although real-time-bidding (technology that allows for the bidding and placing of highly targeted and optimized ads on mobile ad spaces nearly automatically), has long-since been used for the traditional internet, it is still a fairly new feature for mobile. This is changing, however, as more mobile advertising companies develop RTB technology. Kasper believes it will change the way ads are placed on mobile long-term as well.

Learning from Germany Companies in other mobile ad markets can learn a lot from their German counterparts, particularly in the areas of usability and in privacy and security. German mobile ad networks are providing companies and service providers with services such as Click-to-Call for mobile and Call-Back, both of which put users into direct contact with advertising companies. The focus is on usability for the consumer and simplicity, so that customers can reach advertising companies conveniently an inexpensively.

The German sense of privacy and its resulting duty to protecting personal data collected by mobile phones is also something other markets can learn and benefit from. Privacy and security policies are taken very seriously in order to protect the personal date of users.

“Privacy and security are something deeply rooted in German culture, and it is good to keep in mind,” Christiansen says.

She asserts that, while mobile has amazing potential, it can also be dangerous, as companies make money with the personal data of users, and most people don’t know what data it is they are sharing over their devices.

In this case, German laws requiring transparency in

Advertising mobile advertising protects consumers from fraud, ensuring that privacy of the mobile users is maintained.

However, despite the shortcomings there may be with mobile payment systems, mobile commerce is already growing in Germany. A study published in February of this year by German auditing firm Deloitte shows that The future the number of mobile shoppers in Germany more than Rich media is most certainly the future of mobile doubled during the six months prior, with more men advertising in German, as well as elsewhere, Kasper shopping via their mobile devices than women. This is and Christiansen agree. The market will see more and further proof that mobile shopping may actually reach more games and videos become popular in mobile the masses at some point. advertising, as it is a medium that resonates well with Mobile advertising is also certain to grow as comconsumers and has strong branding capabilities. “There panies realize that consumers are on mobile, even if will also be a stronger connection to social media.

Everything is more useful and impacting if your friends the companies themselves are not yet mobile. Kasper argues that despite the information in favor of spendrecommend it,” says Christiansen. ing money on mobile advertising, companies are still Mobile payments will also be massive, once better programs and technology are created. Once mobile pay- afraid of allocating larger budgets towards mobile, ment is mastered, Kasper believes that m-commerce will allocating only 1% of their advertising spend towards mobile. become more widespread in Germany and elsewhere, “It’s time for advertisers to go where the consumers as soon as mobile payments are done in a more practiare, and here in Germany, they are overwhelmingly on cal, user-friendly way. their mobile phones. Excellent network coverage and “We have yet to have one great mobile payment system in place, and until the market finds something that good phone plans make it easy for consumers to spend a lot of time on their mobile phones here, and compaworks very well, it will take time for mobile commerce nies need to meet their customers where they are,” he to really take off,” according to Kasper. says.

Large companies are already starting with mobile According to Kasper, companies need to not only payments, with Starbucks in Germany set to introduce rethink their mobile strategy in order to reach consummobile payments in the country by the end of October, ers on mobile, but they need to rethink their current making it the first company in the food industry to infrastructure as well, going mobile, because their cusaccept cashless payments. Mobile payment is also an tomers are already there. area of mobile that has a lot of potential.

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info@trodat.com telemedia issue 31

39

PAYMENTS wallet means it has the potential to be a real game changer in the retail market.

However, NFC-enabled mobile payments only scratch the surface in terms of the services mobile technology can offer to retailers. For the true value to be recognised, businesses need to understand that it isn’t in the ability to just offer a payment service – it is in the customer interaction opportunities it creates.

The term ‘mobile wallet’ is generally referred to payment services operated under financial regulation and performed from or via a mobile device. A recent report by Gartner highlighted that mobile payment transactions are expected to exceed $600 billion worldwide by 2016, up from $172 billion this year.

Despite a huge potential market, focusing on the mobile wallet from a pure payments perspective massively undervalues the impact mobiles can have. It could be said that tapping a phone is as useful as tapping a card, and as such, there’s no real benefit to the customer. However, if a consumer is tapping a phone for payment and simultaneously providing loyalty details and/or redeeming a money-off voucher, while using it to get additional in-store services, it is a bigger incentive for customers and retailers alike.

The mobile wallet enables the collection of valuable data to create customer interaction opportunities for retailers, marketers and advertisers. These interactions can include in-store customer loyalty programmes, vouchers, or location based services for customers.

For example, with an NFC-enabled mobile phone, a customer can tap a poster or product label to view promotional and product information as well as offers and complimentary items for cross selling.

Moreover, offers can be tailored to suit an individual’s shopping habits. When a customer taps a poster with their phone, a repeat customer at a certain store can be offered something different compared to a first time shopper, due to the information gathered from previous mobile interactions. Retailers will be able to use this technology to tailor offers to the individual and build a personal loyalty package and shopping With operators, banks and even Google launching experience for the customer. the benefits, the concept of mobile in retail mobile wallets, how are we going to get consumers hasDespite left many retailers worried, as customers use their using them? Jon Worley, director of business mobiles for in store ‘price checking’ – where customdevelopment – customer interaction, The Logic Group ers view a product in store and then simply go online and buy it elsewhere for less. While this is a growing believes the answer lies not in the money that is in challenge, it can be used to the retailer’s benefit. John them, but in integration with loyalty programmes Lewis, for example, offers free Wi-Fi allowing customers to compare rival online prices and then price match in store. This has proved beneficial for both 2, Barclaycard, Google and most recently RBS, have all announced plans John Lewis and more importantly the customer.

For retailers, data is one of the key benefits behind to persuade the consumer to ditch customer mobile use. The more you know about physical wallets and join the mobile revolution. In perhaps the biggest push your customers, the better they can be targeted with promotions and offers, resulting in a better ROI. Take to date, Visa showcased mobile and voucher sites for example. There are now many sites card NFC payments at the London Olympics, hoping that offer coupons and money back to an anonyto prove that the mobile wallet is here and it means mous customer making it difficult to tie that back to business. All the marketing noise behind the mobile

mobile

wallets

The Value is not in the Money

O

40

telemedia issue 31

payments the person who redeems it. Alternatively, if this is issued through a mobile, it is unique to that handset, so you know the demographics of who is using the voucher, their location and when they use it. Retailers can instantly know if the unique voucher code has worked or not, and by who. By accessing this sort of data it gives the retailer much better control over the marketing budget. But it’s not simply the data they collect on consumers – it’s also the data they can provide to their customers for future tailored deals.

Mobile phones remain a key pain point for the market as there are only 12 or so NFC compatible phone models currently available. Apple often bides its time before diving in to developing tech markets, which explains why it’s largely been on the sidelines in the mobile-wallet game. However, last month, it unveiled a service called Passbook that pulls together loyalty cards, tickets and coupons. But Passbook drew coverage for what it doesn’t do: it can’t link directly to credit or debit cards, so consumers can’t use it to replace their wallets. While Apple has revolutionised a number of industries, it isn’t often the first mover, choosing instead to wait for others to work out the kinks in a market. Once the next Apple iPhone is available, which is expected to have some sort of NFC capability, an integrated mobile wallet is expected to help drive adoption. Meanwhile it is anticipated that other suppliers will significantly increase the population of available NFC compatible models by the end of this year.

Adoption is really all about consumer education and that needs to start by addressing the underlying security concerns. Once users understand and have the confidence that a mobile is safer than a plastic card, due to all the security measures built into today’s mobile devices, we will start to see better traction. Consumers will also need the reassurance that they will be not liable if they fall victim to fraud, it’s down to the banks. The industry can then begin to reinforce the value proposition by introducing vouchers, loyalty services and targeted media.

Major retailers and merchants are already rolling out new pin entry devices (PEDs) that incorporate NFC technology - if only for the contactless credit and debit cards – the same technology can be used in mobile phones. Either way, the Payment Cards Industry Data Security standards (PCI DSS), hold a list of allowable terminals. For security reasons, PEDs must be replaced after a certain period of time, as they fall out of support timeframes. Therefore, most non-NFC PED terminals will be replaced in the next few years.

With the business need for ROI, new costs that can be delayed will often be disregarded. Despite this, the retail landscape will be very different in 2-3 years.

Even if NFC payments don’t quite take off this year, retailers will still need to upgrade their infrastructure; otherwise they face being left behind competitors.

Any new adoption requires justification as to why

it is needed and most importantly how much it will cost. Thus, mobile strategies need to be thought through to help drive adoption, for both retailers and customers. By understanding the in-store customer journey and identifying the key points of contact with customers, the role of the mobile wallet will be easier to define and apply towards improving customer experience. Currently with the mobile wallet offerings on the market, a phone is as useful as a card, and only when an integrated offering is available with steps for education and awareness, will wider adoption be achieved.

Is the future really NFC?

While the debate over NFC and mobile wallets hots up here in the UK, across the pond a silent revolution is starting that may make all of this redundant, writes Paul Skeldon.

Sometime this autumn all 7000 Starbucks stores in the US will ditch their existing point of sale technology and replace it with Square’s mobile card processing technology and smartphones.

Sqaure has been around for sometime and has always garnered much attention without really achieving mass-market penetration. But this deal will suddenly see it catapulted into being a really smart way to pay.

The thinking behind the move by Starbucks is two fold: first it slashes costs, with Square charging a flat fee of 2.75% per transaction(though rumour has it that Starbucks is getting a better deal than this); secondly it cements the idea that mobile payments isn’t what we all think it is.

Starbucks notably bucked the trend in mobile payments in late 2010 when it started using barcode scanning and its loyalty app to facilitate mobile payments.

Now it is using mobile to take the payments from cards. Any day now we will see it doing mobile device to device payment I am sure.

And this perhaps is where mobile wallets will come in. The thinking behind Barclays’ PingIt peer-to-peer payment app is to get people used to sharing money with each other via their phones (and getting to trust the linking of bank details to the phone number). But its real power comes in getting people using it to pay person to merchant. And that will come. Soon.

All this is good news for wallets, but bad news for NFC. You don’t need expensive NFC investment to make this happen. You need the existing phone network, or some wifi. Job done.

So is it game over for NFC? Not if it can harness other ways of adding value. With nothing significantly broken with current payment options, Forrester believes that moving the needle on the adoption of NFC and digital wallets rests on providing consumers a more compelling experience beyond just payments.

“The key long-term driver for NFC technology is that it can enable many new product and service experiences beyond just mobile contactless payments. The list of new use cases is long: convenient transport experiences; next-generation shopping experiences; authentication and identity management solutions; or immersive marketing experiences. NFC will also expand into other consumer and workforce connected devices, facilitating content and app sharing and cross-device experiences,” says Forrester analyst Thomas Husson in his new report, “NFC: What Lies Beyond Contactless Payments”. Husson interviewed more than 20 vendors and end user companies for this report including Deutsche Telekom, Nokia, Orange, Telefonica and Visa Europe.

“The real promise of digital wallets lies within their ability to facilitate payment while simultaneously enabling smarter, more efficient commerce through delivery of value-added services - before, during and after the payment moment,” writes Forrester analyst Denee Carrington in her new report, “Why The Digital Wallet Wars Matter.” telemedia issue 31

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The integration game

m-commercE

42

Ron Curry, UK business unit head – retail, travel and hospitality, consumer goods at Cognizant Technology Solutions, says retailers are right to embrace the new opportunities that mobile technology offers, but believes integration is key

T

he rapid adoption by consumers of smartphones and tablets almost caught retailers by surprise. The mobile phenomenon has permanently altered how people shop; armed with a smartphone or a tablet, shoppers are leading the mobile revolution and retailers are being forced to follow.

Afraid of missing the bandwagon, many retailers are rushing to offer mobile commerce solutions to demanding customers, so far with varying success.

IMRG, the membership community for the e-retail industry, found that UK sales via the mobile channel increased by 353 per cent year-on-year in April, showing critical momentum.

To understand how top retailers have responded to the mobile phenomenon and what customers think of the results, we analysed the mobile presence of retailers featured in the top 100 retailers list in the US, published by stores. org. Our analysis reveals that, although mobility is widely adopted by retailers across the pond, there is ample room to improve the customer experience, from which the UK retail industry can learn.

If you consider how long it took the retail industry to embrace the internet as part of its sales mix, it is surprising that 83 per cent of retailers already offer at least some form of mobile service. Whether a mobile optimised web page, a mobile application or mobile commerce capability, many retailers appear to be very much on the ball; however, they are still taking a fairly cautious approach in many ways.

At this stage in the game, retailers do not show a clear preference in terms of platform with two thirds offering either a mobile optimised site or an iPhone application, while nearly half have developed an Android application. In terms of mobile commerce, 73 per cent of retailers already offer m-commerce functionality with their mobile web offering, yet they are not investing as heavily in mobile applications, with only 53 per cent having developed an Android app and 45 per cent an application for the iPhone.

Erring on the side of caution may be the right thing to do; however, customers are voicing a number of

telemedia issue 31

criticisms regarding retailers’ existing mobile commerce offerings as they believe many vital features are still missing. These include a lack of social media integration, mobile offerings not being localised enough, a lack of helpdesk support for problems with the m-commerce channel, poor use of rich media and inadequate use of barcode scanning technology.

In addition, as technology advances at breakneck speed, customers can be highly suspicious of new developments and retailers need to tread carefully so as not to alienate their most loyal followers. For example, Cognizant’s 2012 Shopper Experience Study (based on data collected across the UK, North America, Australia, China and Hong Kong) found that shoppers are highly sensitive about what information they are willing to share in order to have a personalised shopping experience. The results show that, having retailers track their locations using geolocation services on their phone is hugely unpopular, The heated debate around the adoption of the ePrivacy directive around the use of tracking cookies and their possible effect on privacy, should not be ignored.

Retailers need to improve customer experience through the use of mobile phones, but not at all costs.

At the same time, it is important not to take the eye off the bigger picture, which should be focused on the customer experience.

With retailers rushing to develop a mobile and multi-channel offering, it is essential not to forget that bricks-and-mortar stores are still king with four out of five purchases completed in physical shops. However, even when shopping away from your computer, mobile technology often plays its part, with shoppers browsing retail sites while in-store.

The 2012 Shopper Experience Study found that today’s savvy shoppers are armed with an unprecedented amount of information and the tools to access data at any moment. If physical stores want to avoid turning into being just showrooms, they need to start viewing themselves as providers of solutions, not just products, offering knowledge and advice that is not immediately accessible to the consumer via a mouseclick.

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PEOPLE Thom Beers appointed CEO of FremantleMedia North America FremantleMedia, one of the largest creators and producers of television brands in the world, has appointed Thom Beers as chief executive officer, FremantleMedia North America (FMNA), effective 1 September 2012. Beers, currently CEO and executive producer at FremantleMedia-owned company Original Productions, will be based in Los Angeles and report directly to Cecile Frot-Coutaz, CEO of FremantleMedia.

As CEO of FMNA, Beers will be responsible for the company’s overall management and business performance and will oversee the development, production and business operations of over 600 hours of network, cable and syndicated programming. He will lead a talented and experienced executive team including Donna Redier Linsk, FMNA’s chief operating officer, and Trish Kinane, president of entertainment programming - American Idol, The X Factor and America’s Got Talent.

Red Bee appoints new CEO Red Bee Media, one of the world’s leading media management companies providing multi-platform technology and creative solutions to broadcasters, content rights holders, platform operators and brand owners, has appointed Patrick Tillieux as chief executive officer and a member of the Board of Directors. Patrick will be responsible for the management and direction of Red Bee Media’s business and strategic vision worldwide, leading a team of over 1,500 employees in the UK, France, Spain, Germany and Australia. He will be based in London and will report to Michael Cook, chairman of the board, Red Bee Media.

Cook commented: “Patrick’s appointment comes at a very exciting time for Red Bee Media.

His extensive knowledge and experience of the global media industry will be an invaluable asset as we seek out new opportunities for expansion and help our clients to maximise the opportunities afforded by the collision of broadcasting and broadband. We are delighted to have Patrick on board and believe that he is the ideal candidate to lead Red Bee Media into the next phase of its growth and ensure that the company remains at the very forefront of media technology, creativity and innovation.”

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telemedia issue 31

Oxygen8 CEO shortlisted for 2012 Ernst and Young Entrepreneur of the Year Award Shane Leahy, CEO of Oxygen8 Communications, global provider of integrated mobile solutions, has been shortlisted as a regional finalist in the international category of the Ernst and Young Entrepreneur Of The Year Awards.

Shane is one of twenty-four of Ireland’s leading entrepreneurs that have been shortlisted for this years prestigious award from an initial list of 150 nominees.

This year’s chosen finalists will join the Irish Programme’s extended entrepreneurial community at the annual Entrepreneur Of The Year CEO Retreat in June.

The weeklong retreat, which will take place in Silicon Valley, California, will give finalists the opportunity to further enhance and develop their entrepreneurial skills, increase their business network, share commercial experiences with local entrepreneurs and develop lifelong peer relationships with other finalists.

Shane Leahy, CEO of Oxygen8 Communications, commented: “I am delighted to be shortlisted for this year’s prestigious Ernst and Young Entrepreneur of the Year Award. I am extremely proud of the success of Oxygen8 and of every single person within the Group that contributes to our continuing growth. I want to maintain the entrepreneurial spirit and flair that has been our driving force, but do so in a way that keeps us at the forefront of technical innovation, ensuring maximum productivity and efficiency, keeping our customers at the centre of everything we do.”

The Ernst and Young Entrepreneur Of The Year Award, which was established in the 1980s, is the world’s most prestigious business award for entrepreneurs and is designed to identify, support and celebrate successful entrepreneurs from across the island of Ireland.

Darling departs OpenMarket Andrew Darling, associate director of marketing and communications EMEA at OpenMarket, is leaving the company to pursue new opportunities in the industry.

Darling – a telecoms freelancer of great repute and one time contributor to Telemedia magazine and World Telemedia – leaves OpenMarket after two years with the company, during which time it won numerous awards and took part in many leading industry events.

Telemedia magazine is part of a stable of media products covering the value chain for media and content companies, to third party service developers and providers to network operators and billing companies. Our products comprise: Telemedia-news.com an online news source, updated as the news happens and the home page for all we do

Telemedia Week a weekly email news digest of the news from the week served with an incisive and witty comment on key events

Telemedia360 a monthly fully interactive PDF newsletter featuring comment and analysis behind the headlines and backed up with full web linkage and, new for 2010, video interviews

TelemediaTV our dedicated YouTube channel featuring news interviews, background interviews, conference coverage, demos and all sorts of video material to embellish what we do through traditional media channels

Telemedia360 Blogspot our regularly updated thoughts on what is happening in the fixed line, mobile and web worlds Telemedia Magazine our bi-annual gazette of in-depth industry analysis and comment, industry survey data and research

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