Telemedia Magazine - issue33 by annika micheli

issue 33

Connecting consumers to media, content and billing Welcome to planet payments

or is it a world of pain?

Ticket to ride Virtual ticketing blasts off

S G N I R

D N U O R

Permission to land How to engage with your customers

D L R O W E tion a s H i l a T e internatiaonnd what it Th dia e ou m e l of te means for y

preview Inside PLUS: AffIliate marketing > Wifi to the rescue > m-Adult regulation > M2M opportunities > Data and CRM

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features The world of worth

The international premium rate market is a shining beacon of hope during these gloomy economic times. And it is mobile data and the emerging markets that show the greatest growth potential. Matthew Leach reports

The world is not enough

The increasingly international nature of the telecoms market has brought with it bountiful opportunities for the telemedia industry. Unfortunately, where there is money to be made there are the unscrupulous who want a piece of the action and have no problems resorting to fraud to get it. Matthew Leach reports

Let’s get quasi-physical

In certain countries it has become the norm to buy quasi-physical goods such as tickets, parking and tolls on the mobile bill, but EU directives on e-money and Payment Services look set to make that an even more distant proposition unless action is taken now. Here, Rory Maguire, Managing Director of AIME, outlines what the industry is doing to make this work

Banking on m-payments

The world of payments and m-payments is forcing some radical changes within the banking sector as they finally realize they have to adapt to survive. Paul Skeldon takes a look at how the m-banking world is changing and what it means for technology and service providers

Searching for the sweet spot

Delivering personalized experiences is key to marketing and commerce in any field, and with consumers increasingly willing to share their data with brands it should be a no-brainer. But as Michael Schirrmacher, UK Sales Director, Webtrends, points out, brands aren’t getting it

Keeping pace with customer experience

While there is much to be said for brands and businesses profiling their customers, the challenges in supporting this for comms service providers are huge – and getting bigger. Gordon Rawling, Senior Director EMEA Marketing, Oracle Communications, outlines how CSPs need to adapt

Build loyalty and they will come

Once you understand your consumers and know how to manage your relationship with them, how do you get them to keep coming back? Loyalty. That’s how. But it’s much harder than it looks. Paul Skeldon explains

Just the ticket

Mobile ticketing is becoming increasingly prevalent in this age of rising smartphone penetration, and when NFC-enabled phones eventually become the norm, paper tickets will seem positively prehistoric. But this is just the tip of the iceberg, says Matthew Leach

Something in the air

Marketing and engagement are changing dramatically, so brands and SPs have to change too. And helping drive that change are new approaches to using network technology – especially wifi. Phil Gault, Director of Strategy, Sponge, explains what it means

M2M: From management to monetisation

We now live in the post mobile era: mobile comms is no longer about voice, text and even messaging, but is now about machines talking to you and to each other. And it provides a huge opportunity for service providers. Gordon Rawling, Oracle Communications, takes a look at why it’s important and what brands and businesses want to do with M2M – and why it matters to you

Jumping through new hoops

Online the ISPs are set to make users opt in to view adult content. Now, on mobile, the British Board of Film Classification is determining what is +18 content and what isn’t. Can this work, wonders Victoria Hawes

regulars 04 Comment Telemedia is going international –

but there are clouds on the horizon

05 How affiliate marketing is getting Opinion: Affiliates people into hot water

Payments 06 Analysis: Barclays Bank goes live with a new

version of PingIt – is this the future of payments?

TV 07 Analysis: How to grab, edit and share live TV as it happens

Chat 08 Analysis: How adding pictures to live chat boosts retention and ROI

09 Select Digital revamps

Analysis: Telecoms SMS and interconnects

Agenda 10 What the powers that be have been up to

42 Directory The industry’s only listing of who does what

46 Keeping tabs on the movers and People shakers

show preview DESTINATION AMSTERDAM

As the great and the good of the industry converge on Amsterdam on 16-18 October, we take a peak behind the curtain as to what plans are afoot telemedia issue 33

COMMENT

elemedia is becoming mainstream. The ideas of engagement-led services and the attendant mobile marketing, commerce and payments attributes that go with it are becoming the bedrock of today’s interactive services for media companies, retailers, and beyond. And it is not only spreading through consumer bases at home, it is increasingly becoming an international marketplace, seemingly free of

s– issue set e s e e h r All t ore – a d at m and e debate edia to b d Telem . Worl sterdamket Am our tic y o B ok today!

paul skeldon

borders. While this is good news for the industry in many ways, in others it is a time of huge upheaval. The days of having this space to ‘ourselves’ – of it just being an industry that serviced the needs of others – are at an end as big brands, banks, operators and service providers all muscle in to make this happen. And this growing interest and growing battle for the pounds, dollars, euros and sheckles in consumers’ bank accounts is attracting a raft of interest from the powers that be that try to regulate these services. There is now everything to play for. While many worry that this seismic shift in how the industry is constructed and operates, how it is perceived and how it is regulated offers some fearsome challenges (not least combatting the growing number of fraudsters attracted to a business that is globally booming), really it offers the opportunity for those willing to take it to create a whole new business paradigm and apply the lessons learned over the past three decades to creating some truly awesome products. Take payments as an example. The idea of paying using a telephone has been pioneered by the telemedia industry, but it is now the topic of debate among such mainstream industries as banking, retail and the world of global super-brands such as Apple, Google, Facebook and even Yahoo! This month sees the launch in the UK of Barclays Bank’s latest version of P2P payment app PingIt, which has now been extended to paying for goods straight from adverts. It is also just months away from being rolled out as a payment tool to be used to revolutionise the check out process in shops. Similarly, Paypal has rolled out its ‘pay by face’ check in to check out services in the US and UK in what could be a major land grab for the company. Others are hard at work trying to do the same around wallets and other products, not least telemedia perennials Oxygen8 in partnership with MPayMe. But while this shift is happening, the EU has decided to look very closely at payment services – in addition to the ‘work’ it is already doing in e-money – and the potential prognosis isn’t good. They, in a nutshell, appear to want to stop your paying on your mobile phone bill. While this is not a major part of the mainstream debate about mobile payments, sticking the cost of something onto a phone bill is quick and easy and should be one of the options open to consumers. The key to m-commerce in its broadest sense is choice: a consumer should be able to pay via their phone, and to chose within that where to stick that charge. Payforit has done sterling work in getting as far as it has – and any on-bill charging for physical or quasi-physical goods is going to have its work cut out competing with the banks and the brands – but it still has a long way to go. Similarly, the regulation of everything from marketing to adult content is all changing – with some often poorly thought through schemes in place to tighten it up. Unusually, at a time of huge financial strain and post recession need, regulators are seemingly trying to stymie efforts to make things grow. We live in interesting times.

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

telemedia issue 33

the small print

Cometh the hour, cometh the regulations

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, Alexandra Franklin, 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 The Man Don’t Give a Fuck, Super Furry Animals Wake Up Call, Drongos for Europe What we’ve been amused by Family Tree What we’ve been following The impeding war in Syria/World War 3 What we’ve been reading about War, destruction, the end of capitalism – and football

Telemedia Magazine is published every six months and circulated in print to 8,000+ qualified readers and downloaded in digital format to 17,000+ requested readers. Business Address: Ground Floor, Virginia Cottage, Nash Lane, Scaynes Hill, West Sussex, RH17 7NJ, UK. Web: www.telemediamagazine.com Circulation enquiries to: Geraldine O’Sullivan geraldine@wtevent.co.uk

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Opinion Analysis

ANALYSIS

Regulation

Affiliate marketing is a great way to drive consumers to services, but recent problems that have led to some unexpected fines has really set the cat amongst the pigeons for telemedia companies. Ahead of the special session at World Telemedia Amsterdam, Paul Skeldon looks at what has been happening

any aggregators and service providers have been plunged into confusion over the summer as problems around affiliate marketing for services have landed firmly at their doorstep, with regulator PhonepayPlus warning them that they have to know if any affiliates’ marketing services for their clients are scamming consumers. Fines have already been issued and other legal proceedings are on going as we go to press, Telemedia has learned. The problem centres around service being marketed through smaller affiliates and individuals who are using the opportunity to offer prizes in return for sign ups to subs services that often turn out not to exist – without the knowledge of the service provider or the aggregator. However, these L2 and L1 companies are being held responsible. There is also the growing problem of individuals acting as de facto affiliates on sites such as Facebook, where they are offering fake promos and luring consumers unwittingly into subscription services. The problem has been further compounded by PPP discovering that malware from Russia called Ransomware has also seen a rise in online affiliate scams and a huge number of complaints to the regulator from consumers. In this instance, PPP’s monitoring evidenced affiliate marketing that appeared to utilise a form of malware known as ransomware to lock consumers’ internet browsers and force them to interact with online offers which directed them to the Level 2 provider, Greenwhale Holding “Funlodia” subscription services. Industry trade body AIME is concerned that with PPP issuing fines and looking into the affiliate marketing issue, many aggregators are going to be forced to abandon affiliate marketing as it is impossible to cost effectively track all of them on such

tight margins. PPP has issued guidance notes on affiliates and recognizes that the problem of tracking what is happening to traffic. In it, it said: “The advantage for PRS providers in using affiliates can be two-fold. Firstly, they can gain access to marketing tools and techniques that they may not have in house. Secondly, because affiliates are paid on a performance basis, the merchant only pays for results and does not risk being saddled with marketing costs that are unrelated to commercial performance. “However, there are also potential risks to signing up with affiliates that merchants need to be aware of. Given the way in which they are paid, affiliates have strong incentives to drive consumers to purchase the relevant PRS service. This can be a good thing if it is done legitimately, but it can also incentivise less scrupulous affiliates to mislead consumers in order to increase their revenues. This can be particularly the case where affiliates are small and have no particular interest in maintaining relationships or a brand reputation in the UK. “The risk for PRS providers contracting with such affiliates is two-fold. Firstly, their brand can be damaged by being associated with such misleading practices. Secondly, under the Code of Practice, providers remain responsible for the promotion of their services, even where it is carried out by a third party. Therefore if an affiliate promotion has breached the Code, then the relevant provider will be deemed responsible by the PhonepayPlus Tribunal and may be subject to fines or other sanctions.” But a response from Zamano to the guidance suggests that it is harder to pull off that you’d think. “There is a lot of action that can be taken to manage the affiliate marketing process and minimize risk, but it is impossible to track every element of the promotional process from when the consumer first sees the affiliate controlled

pages, through the final PRS promotion. So, for example, an L2 can approve pre-lander pages, track them via referrer links and monitor these links on an on-going basis to check for compliance. What cannot be done is to monitor what he consumer sees before the pre-lander or their journey to the prelander. General live web monitoring can be done, but this is needle in the haystack stuff and it is very difficult to replicate a customer’s journey. The problems caused by affiliate marketing from small companies and individuals is on the rise and was highlighted in Telemedia some months ago by Rory Maguire, who is now Managing Director of AIME and is keen to get all interested parties around the table to discuss how to develop tools and strategies to ameliorate the problem. In fact, he has fallen prey to the issue. “Some time ago, I was searching the internet to see if I could find a digital version of a long abandoned vinyl album,” he says. “I found to my joy, that someone had digitised it and I could have the MP3 tracks for free – all I had to do was complete a survey. On clicking the “Survey” button, I was led to a separate site and a Payforit page for a subscription service. There was no link between the digital album, the survey and the subscription service, but they wanted to charge me a subscription of £8. Realising that I could send STOP after the first payment, I calculated that £8 was a reasonable price for the digitised album. I did not want the subscription product on offer, but after my £8 charge, that’s all I got and not the album. I had been misled. “In the complex way these relationships work the owner of the digital conversion probably received ad funds (cost per click) from the survey site without delivering any goods. The survey site was an affiliate and was getting paid by the ad network, which was then getting paid by the owner of the subscription service. “As an old hand in the industry, I felt humbled by being conned so easily, but as a regular consumer I would have complained. If there enough complaints like this then it raises red flags, possibly leads to a regulatory investigation and potentially gives us all a bad name,” he says.

AIME and World Telemedia are working together to put on a session at World Telemedia Amsterdam on 17 October to discuss the issue. See wtevent.co.uk to book your place telemedia issue 33

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ANALYSIS

to payments apps is nothing new. Earlier this year, Oxygen8 formed a partnership with MPayMe to create a similar payment tool that uses QR to initiate the payment. The difference here is that it allows the user to then decide how to pay: bank account, stored credit card, Payforit etc… The difference, however, is that Barclays has the reach – millions of customers and hundreds of thousands of merchant clients, not to mention the fact that non-Barclays customers can also use PingIt – to make this really fly. And frankly, having seen it in action, this is what mobile payments needs to be. Simple, linked to my bank account so that I can just pay. It is also simple and secure, which helps. The use of QR is also very interesting. At the launch of this new version of PingIt the assembled tech press was dismissive: but consumers love and understand them and in this instance they are an excellent way to initiate the process – and they are cheap for merchants to produce: they are just ink. So is this the future of mobile payments? I think so. Integrate other payment tools into PingIt style service that works right across all bank accounts – and stick it behind a massive brand, like, oh say Apple or Google – and boom, mobile payments are here. Standard.

he race to dominate the mobile payment’s market took a lurch towards the traditional banking market in September, when UK bank Barclays launched the latest version of its – until now – peer-to-peer payments solution PingIt that allows consumers to buy directly from adverts in magazines, on billboards and even on TV. The technology also allows utility companies to integrate mobile payments into bill payments and, eventually, could see a revolution in the checkout process in stores. And how does this all work? Well, it uses QR code scanning. Barclays has integrated a scanner into the PingIt app, but more significantly has plugged itself into merchants back end APIs so that the whole consumer experience takes place within the PingIt app. This means that the whole thing is secured by PingIt’s security, but also makes the process one that is rapid and simple to use – allowing purchases to be made with six clicks, five of which are the security PIN. The service is an interesting departure in the mobile payments space as it not only simplified payment, but the use of QRs means that advertising collateral can be turned into a direct sales channel, catering to impulse purchases and suddenly adding value to static advertising. But of course the application of QR scanning

payments

Opinion Analysis

M-payments goes mainstream with Barclays launching the latest version of PingIt which now allows merchants to turn physical adverts into a direct sales channel, finds Paul Skeldon

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telemedia issue 33

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Opinion Analysis

ANALYSIS

Live TV is for sharing – that’s what all the stats are pointing to and why Grabyo has launched Grabyo Studio that allows broadcasters of any stripe to grab, edit and share live TV content as it happens

he world revolves around social sharing and the ability for media companies to grab content and share it live is becoming key. And no wonder, according to Twitter 40% of all Twitter conversation around peak time is about TV, while Neilsen finds that 29% of viewers post on Facebook about TV shows. So, Grabyo, a real-time TV clip-sharing platform, has launched its offering for broadcasters with Sky’s coverage of transfer deadline day. Grabyo Studio, which enables broadcasters to grab, edit and share TV clips in real-time across social media and their own websites, will be used by Sky Sports to drive online conversation around one of the biggest days in the football calendar. Following the recent launch of its consumer-facing TV clip-sharing platform, Grabyo Studio now enables broadcasters to select and share TV clips in real-time via a browser-based interface. Clips can be previewed and edited before being shared with hashtags and a description across Twitter, Facebook and their own websites. Thanks to Grabyo’s integration with Twitter, users can

view clips as Twitter cards without leaving Twitter, as well as directly within Facebook’s newsfeed. Grabyo Studio’s focus is on simplicity, ease and speed – ensuring that broadcasters are the first to share clips, enabling them to drive social media engagement and grow both their linear and on-demand TV audiences. Leveraging the viral reach of both Twitter and Facebook, Grabyo Studio ensures clips are seen and shared by as many viewers as possible. In addition, Grabyo Studio’s integrated ad serving also enables monetisation of the online conversation around shows, via a branded TV clip experience with video ads. With its launch on transfer deadline day, one of the biggest days in the football calendar, Sky Sports is using Grabyo Studio to share breaking news and other clips from its rolling nationwide coverage in real-time on Twitter, Facebook and skysports.com. Clips also feature Sky Sports subscription ads. “We’re really excited to launch Grabyo Studio on transfer deadline day, one of the most important dates in the football calendar and a major social media event,”

comments Will Neale, founder at Grabyo. “The real-time nature of our platform drives conversation by helping broadcasters publish live TV content onto these platforms faster than ever before. Broadcasters not only retain ownership of their content by releasing it before others, but also have the opportunity to monetise it with ads. We’re working with a number of broadcasters to launch real-time clip sharing on a wide variety of programmes in the coming months.”

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telemedia issue 33

EXHIBITION, Seminars & Networking 16 - 18 October2013 nh barbizon Palace Hotel amsterdam

Meet serious business parties in Amsterdam 16 Oct.

17 Oct.

17:00 - 18:00 “RUFF RIDERS” WELCOME DRINKS Welcome the “Ruff Riders” as they complete their epic 210km journey from London to Amsterdam by bike – raising money for The Bobby Moore Fund in memory of Alex Ruff. Wear CURLY WIGS in homage to our friend’s unique image! Prins Hendrik Restaurant, (opposite Hotel

EXPO HOSPITALITY Thanks to the generosity of our sponsors, World Telemedia 2013 offers more delegate services, exhibits and hospitality than ever before. Make sure you make full use of the specially designed meeting and lounge facilities.

18:30 - 20:00 OPENING EXPO DRINKS Starting as we mean to go on with networking events of the highest quality, all delegates are invited to meet for a welcome drinks reception in our fantastic new venue. NH Barbizon

EXPO BAR, LOUNGE & VIP HOSPITALITY – IT’S TELECOM 2 TOWERS The Expo Bar & Lounge will be open throughout the show, serving a full range of drinks plus free tea and coffee. So arrange your meetings in the lounge area or simply rub shoulders with the people that count - by “doing business at the bar”.

Barbizon)

Palace Hotel, St Olof’s Chapel / Expo Lounge

21:30 - 23:30 INTERNATIONAL PREMIUMS’ WELCOME PARTY Delegates can really look forward to seeing how International Premiums will top their fantastic opening party at WT Marbella last year! Look forward to great entertainment, free flowing drinks and wonderful cuisine. SupperClub - upstairs

20:30 - 22:00 MOBILE LIFE PARTY Expectations will be high that the networking events in Amsterdam will be second to none and we’re delighted that another repeat sponsor will be aiming to build on their reputation at WT Marbella. Delegates will be invited to enjoy a great hospitality in Amsterdam’s most colourful district. Player’s Bar

BLIND SPEED NETWORKING – “MOVERS” MEET “SHAKERS” It is not what you know, it’s “who” you know and this very popular event delivers 6 new contacts in just 30 minutes. Forget S the simple buyer / seller relationship - this format ensures that > > you expand your business network and gets you closer to the • < solutions you’re looking for. 12:00 & 15:45 (17th October) and < S 14:30 (18th October). NH Barbizon Palace Hotel, St Olof’s ES R Chapel / Expo Lounge s P

Visit wtevent.co.uk for full networking information

k t rin Oc D 7 po on 1 > x rE 0 •> so 9:0 < n o 1 Sp :30 S< S E 17 PR

O ST

Opinion Analysis

ANALYSIS

chat

In chat pictures are being used to boost hold times, improve customer retention and up ROI. Is this the future of chat?

hat service providers are getting a much needed boost to ROI through better hold times, customer retention and return rates thanks to a novel new service from live chat provider Luv2Chat. Luv2Chat has tweaked its system so that chat operators – that’s the girls – with assigned personas send pictures of themselves (or “themselves”) to the caller’s mobile handset to personalize and enhance the caller experience and to act as a compelling hook to the caller to stay on the line and indeed to form attachments so that they call back. Regularly. According to Luv2Chat, this not only extends the duration of the original call by creating a higher level of engagement, but also it increases customer retention by up to 70%. Regular callers accumulate their own picture library of girls available on the service and can

easily remind themselves of their personal preferences. The incorporation of simple click to call functionality adds ease of access to chat for impulsive callers, says the company. “In a world where there’s not a whole lot of good news about live chat services, Luv2chat is committed to introducing new and exciting features to its services and increasing our face-paced UK growth,” says Richard Smallbone from Luv2Chat. “And if you want to see where interactive 121 services are going in 2014, catch us at World Telemedia Amsterdam.”

According to Luv2Chat, this not only extends the duration of the original call by creating a higher level of engagement, but also increases customer retention by up to 70%

telemedia issue 33

Opinion Analysis

ANALYSIS

telecoms

A new breed of telemedia company is shaking up the services world and Digital Select is a prime example, as it revamps SMS chat platform and sets up direct BT interconnect

eading PRS provider Digital Select has secured a direct interconnect into BT at Telehouse in London Docklands, and has revamped its SMS platform to offer customers big and small, faster and lower cost premium rate numbers and a host of innovative SMS services. Digital Select is in the process of porting all its OFCOM numbers to

the interconnect and is expecting to start offering services mid-September. The direct BT interconnect means that the company can build its own IVR and services rapidly and accurately. It also means that Digital Select gets the full interconnect rebate, which it can pass on the improved commercials to its customers, offering lower costs and higher rebates. The interconnect and IVR can also run all manner of specialist set ups, including free intro messages for PRS numbers, so that consumers aren’t charged to listen to the pricing information before the services starts. “This is quite unique in the market and is a great USP, along with lower costs, of our services,” explains Digital Selects Shaun Freeman. “And locating at Telehouse in London Docklands means we have very resilient redundancy so we can absolutely minimize the risk of any down time.” While the company has been working on the BT direct interconnect deal, Digital Select

has also been revamping its SMS platform, making it faster and much more manageable by users running chat services, competitions, voting and other services. Among the key new features on offer is the ability to manage service set ups on the fly, such as clients creating their own competitions, and to get stats instantly at any point. It can also automatically pick winners in competitions as soon as the closing deadline has been hit. “This keeps the picking of winners completely independent and rapid,” says Freeman. “ The SMS platform also features a master account login for company level, sub accounts for operators (and operator overview stats), as well as letting operators be assigned to certain keywords/services, or a mixture/all keywords. “The SMS Chat platform can operate on a Dedicated or Shared SMS Short Code allowing you to setup this service without the fees of a dedicated code,” says Freeman. “The whole SMS platform rebuild is based around speed: speed to create services, speed to change services on the fly, speed to pick winners and speed to get stats.”

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telemedia issue 33

industry AIME AIME Enters Last Quarter On Full Steam The summer months are reported to be the ‘quiet months’ for the Industry, but no one at AIME took notice of the memo as we have been busy preparing for the next quarter with a new arrival to the AIME Team, new emerging Industry issues and new initiatives on the horizon. Networking and New Arrivals Our first activity in September was the Indian Summer Networking event (with the last of the summer’s hot days) that drew in over 90 member representatives, catching up with Industry peers and with AIME’s activities. The event couldn’t have gone ahead without the kind support from Cellcast and Oxygen8. The start of September also marked the end of Toby Padgham’s seventeen year reign as AIME’s Managing Director, with Board Member Rory Maguire stepping in to steer AIME for the next six months while the board formally recruit a new Managing Director. Toby remains on the Board as an Executive Director and is still very much at the core of AIME’s vision and objectives. Industry Issues and Initiatives There is a long list of activities for Rory and the team to dive into starting with two potentially significant issues that AIME has identified. A redraft to the EU Payment Services Directive has seen Europe threatens to potentially wipe out significant sections of the existing mobile and fixed line services market. AIME immediately produced a whitepaper to summarise the issue to Government and Members, analysing the potential damage the PSD redraft could cause. We’ll be meeting with the Financial Conduct Authority and the Treasury at the beginning of October to lay plans of action for this matter and have received support from the mobile network operators (MNOs) regulatory body, the Mobile Broadband Group and from PhonepayPlus. The second potential issue that has been bought to AIME’s attention is the recent decision for the MNO’s digital content rating body to be transferred from the self regulated IMCB to the British Board of Film Censors. This could potentially

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result in a rating change for some digital content currently available – something AIME will be discussing alongside Members during a workshop requested by AIME and hosted by the BBFC on the 26th September. AIME’s work continues with the OFT’s consultation on ingame purchases particularly when marketed to children is due to be released at the end of this month. AIME has already pre-consulted with the OFT on their concerns and will be providing assistance to our Members on understanding the requirements for the consumer journey, carrying out appropriate checks on app developers and developing best practice. One issue that AIME has resolved for Members is the Business Innovation and Skills Department (BIS) Draft Consumer Rights Bill, which threatened to place unreasonable refund requirements onto digital goods. AIME’s consultation response met effective action from BIS who added a new Digital Content category to the draft bill, with emphasis placed on replacements rather than refunds. Forums and Working Groups Two forums will meet before the end of September, with the Voice Services Working Group coming together to discuss Voice Short Codes, Higher Rate Premium Rate Services (HRPRS) and also AIME’s response to proposals to restrict customer service numbers to standard rate prices. One of the main goals of this forum is to support a trial for early introduction of a higher PRS tariff (over £1.53) that would otherwise be delayed by Ofcom until May 2015. The Payforit/In-app Forum will be discussing successful environments for Payforit, updating of Payforit v 4.1 and changes to in-app purchasing announced by Google. The short-term objectives of this forum will be discussed, but the emphasis remains very much on long term driving of Payforit and other mobile charging opportunities for the industry. If you may be affected by any of the issues discussed here, you can write to AIME via Telemedia@aimelink.org

industry MEF MEF research identifies more needs to be done to build consumer trust in apps MEF has published analysis into how the top 100 free mobile apps* inform consumers about their use of personal data. More than a quarter (28%) of the top 100 apps available from the App Store and Google Play still don’t have a privacy policy as well as areas for improvement mobile apps can present privacy information in a non-consumer-friendly way. The research follows MEF’s Global Privacy Report supported by AVG Technologies from earlier in 2013 which showed that 70% per cent of consumers say it’s important to know exactly what personal information is being collected and shared. MEF’s latest analysis examined when and how a privacy policy was made available; the language used and its length. - Only one in two apps (55%) offer a privacy policy prior to download in the app store This means that almost half the top 100 free apps do not give consumers a chance to make an informed decision prior to downloading. - Only a third (32%) offer access to the policy within the app - 69% of privacy policies are written in long form (more than 750 words) The average policy length was found to be 3,068 words, taking 12 minutes to read (an average ability adult reader can read 250 words per minute). The longest privacy policy was 8,124 words which would take 32 minutes to read. Only 8% were written in less than 750 words. With users interacting with an app for an average of just two minutes per session it is unrealistic to expect consumers to engage with a privacy policy for so long. Simon Bates, Senior Advisor on Policy and Initiatives said: “Consumers must able to make an informed decision about whether or not to download an app. Once it’s on their device, they should be able to access the policy easily, from within

the app. MEF’s global Privacy in Apps Initiative is supported by members from across the value chain to increase consumer trust in apps. It is essential developers are transparent. Privacy policies should be accessible, brief and easy to understand.” Prins Mhlanga and Saleem Mobhani appointed as strategic advisors in Africa, India and the Middle East MEF has appointed Prins Mhlanga and Saleem Mobhani as Strategic Advisors as MEF continues its expansion with a particular emphasis on the Growth Markets including the Middle East, India and Africa. Former Vodacom Managing Executive for Digital at Vodacom, Mhlanga will support MEF’s Africa office which was established in 2012 in association with Vodacom with a panregional mission in Sub-Saharan Africa. Mobhani, former VP for Digital Marketing and Entertainment at carrier Du is appointed to support strategic growth and initiatives in the Middle East and India. MEF’s Middle East Office was established in 2010, co-founded with ooredoo. Mhlanga and Mobhani’s wide-ranging mobile expertise in markets across the Middle East, India and Africa will strengthen MEF’s regional strategy and roadmap for accelerating mobile content and commerce and ensure the sustainability of the global mobile ecosystem. They join incumbent MEF Strategic Advisors Ingrid Silver, Partner at Dentons, Gerrit Jan Konijnenberg, SVP at Vodafone, and Roy Vella, Managing Director at Vella Ventures. Mhlanga and Mobhani’s appointments underpin MEF’s expanded focus as reflected by recent joiners including, Consumer Trust advocates Evidon and TRUSTe, Etisalat and Mobile Technology Tomorrow (MT2) from the Middle East, Twist Mobile in India and banking and finance business AMEX and education giants Pearson.

PhonePay Plus (PPP) Potential breach of the Consumer Protection from Unfair Trading Regulations 2008 by competitions, prize draws, and/ or repeat download services that carry a repeat charge This compliance update is relevant to all providers of premium rate services (PRS) competition, prize draw and/or repeat download services that carry a repeat charge, which meet the description of consumer risks set out below, and to the Level 1 providers and Network operators through which these services are provided. PhonepayPlus recently carried out its Emergency procedure (“EP”) against a number of PRS quiz, competition and content download services that were promoted using affiliate marketing. The relevant Tribunals were held on 25 July and 8 August 2013, and the adjudications were published on the PhonepayPlus website on 22 August 2013. The majority of services involved in the recent EP cases were competition or quiz services which were widely marketed using online affiliate marketing techniques. Such services typically offer a cash prize or the latest tablet or smartphone device as an inducement to enter, and suggest by answering a simple question, along with supplying a mobile number “you can have a chance to win”. These competitions can have an extended entry period of up to 3, 6 or 12 months and are priced in varying ways. Entry to the service often involves a recurring charge, most often subscription, or demands repeated entries leading to accumulated costs over time. The issues identified below during the investigations and adjudications have also been observed with subscription services that enable users to download content to their mobiles. Final statement regarding Information Connection and/or Signposting Services published PhonepayPlus published a final policy statement following its consultation on Information, Connection, and/or Signposting Services (ICSS). PhonepayPlus received a number of responses and, based on a consideration of the evidence presented, gives notice that providers of ICSS will be required to seek prior permission to continue to operate ICSS. Applications for permission must be received by 11 September 2013. A Notice setting out the requirement, and the conditions under which permission will be granted, is attached at Annex A of the Statement. Emergency procedures launched PPP has launched several Emergency Procedures over the summer, many connected to “ransomware”, subs services and the problems encountered around affiliate marketing. Ordanduu Gmbh, Optimus Mobile GmbH, Bafona Ltd’s “Zovut”, R&D Media Europe, Jesta Digital GmbH, Gico Europe LLP, Bitstacker Limited, Greenwhale Holding Ltd, Global Billing Solutions and Hectiq B.V, have all been looked into.

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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PRS

World of worth The international premium rate market is a shining beacon of hope during these gloomy economic times. And it is mobile data and the emerging markets that show the greatest growth potential. Matthew Leach reports

ccording to Analysys Mason’s forecast report, Global Telecoms Market Trends and Forecasts 2013-2017, the global market for telecoms services generated retail revenue of $1.54 trillion in 2012. Emerging markets, such as China, India and Brazil, as well as mobile data, are predicted to drive global telecoms revenue up to $1.7 trillion by 2017. One company constantly on the look out for new international markets is Telserv, which has a presence in 140 countries, supplying domestic premium rate numbers, freephone and GEO numbers between operator and reseller. Telserv Chief Commercial Officer, Marco Dunhof, said: “There are a lot of opportunities in the premium rate market, which is why Telserv has set up in all these different countries. We sort out all the contracts and interconnections with the operators. There are opportunities in markets where there are not many people doing telecoms business already such as South Africa, Eastern Europe – Bulgaria and

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Romania, Brazil and North Africa. “Our resellers are not just interested in doing business in the top 10 countries; they want to do business outside Europe, which is why they take numbers from us. Markets such as the UK and Holland are stable markets, but they are not growing. In the Middle East, Africa and Eastern Europe the market is open. There is no economic crisis because they have not known any different.” Danny Marino, the Chief Business Development officer at txtNation, which provides mobile billing and SMS messaging services, insists that companies are constantly evolving their services to deliver relevant content in cross-border scenarios. Marino explains: “There is still a huge opportunity in the content space for service providers who have something unique to offer. We’re now seeing offers for unique custom, often user-generated content, which works well. For example content providers who offer localised content – such as Bollywood content providers in India, who package their content for international sales to immigrant consumers in other

PRS markets. “The regulatory landscape has changed so much that we don’t see too many subscription services anymore, like the typical ‘win an iPad’, splash page promotions. It now tends to be more stable micropayments for digital products and services that work well – membership payments for access to dating, social media, gaming sites – where payments also are taken for virtual goods, profile upgrades and more.” For Josef Bruckschloegl, CEO of Kwak Telecom, one of the main opportunities in the international premium rate market is the “globalisation of the media business.” He said: “Ten years ago the domestic television stations’ need for response and interactivity was satisfied by domestic premium rate numbers. Now we see more demand for international solutions for a global market – companies like Bloomberg need international number ranges. Therefore, you either need a lot of domestic numbers or one or two international premium rate numbers. “You save money by using international premium rate, for example, if you have a TV spot on satellite going out to say 65 different countries, you need 65 response numbers. If you have one number it is much easier and provides optimisation of the whole revenue stream. One or two numbers decreases advertising effort and saves time and money. This is happening more and more.” According to Tim Williams, CEO of Felix Telecom, what works well is television and web-based advertising and the services that are driving the market are “customer information services, competition lines, friendship lines, chat services and adult services.” Bruckschloegl agrees that TV is key to successful services in the international arena. He said: “We have found TV works well, no matter what the content is. There is plenty of people content – psychology hotlines, people talking about their moods. We have discovered that the volume on premium rate numbers for adult content has decreased because of access to free content on the internet. But we are seeing a huge trend in ‘winning games’ – lotteries, quizzes promoted on an SMS basis.” This content is also popular in the less developed territories. Bruckschloegl says: “We found that adult content and ‘win’ games work just as well in the emerging markets – the Middle East, Northern Africa, Southern Africa and South America – as the more developed countries of western Europe. It is all about diversification of the market not of the services.” But we should not focus solely on emerging markets for increasing revenues; the Nordic countries also provide a welcome place to do business because of the higher out payments. Marino said: “In markets like Sweden and Denmark, where they

have developed charge-to-bill products (Wywallet and 4T, respectively) then the biggest opportunities now are ticketing, transport, vending. Payment for physical goods is possible, and the networks are signing merchants up on much lower transaction fees to enable those deals. “The Nordics is huge for ‘pay by mobile’ in these new offline opportunities. Basically, because they can compete with credit card on transaction fees and mobile payments is so relevant for low value purchases like ticketing for transport. It’s convenient, fast and accessible.” Felix Telecom’s Williams highlights blocked number ranges in certain territories as having a detrimental effect on international business. Williams said: “What is really holding the international premium rate market back is blocked number ranges. Countries, such as Iran, are not keen on you taking money out of the country. They are also uneasy with the fact that they have no control of the services and that it is outside their jurisdiction.” Telserv’s Dunhof agrees that working in the Middle East does throw up unique challenges and insists that to succeed in that region you must prove to the authorities that you are not some fly-by-night business but that you are in it for the long term. Dunhof said: “The Middle East is a very difficult market because of regulation. You must do your due diligence, prove you have enough money, and you must show you are in it for the long term.” Regulation is a difficult balancing act. Too much and it can stunt business growth; too little and unscrupulous individuals can take advantage. Fraud is a problem in the increasingly borderless world of the international premium rate market, where increasing innovation makes it hard for regulators to keep up. Kwak’s Bruckschloegl said: “The market is being held back by the bad reputation of a lot of services and players within the market. This has had a negative effect on the access to number ranges. Big carriers are increasingly scared of fraud, which means some routes are not open because of hacking; the more bad entities in the market the more the market will see consolidation.” Dunhof insists Telserv will not touch the international premium rate numbers and stick to domestic premium rate to minimise the risk of fraud. He said: “Our traffic is good, it is clear. We have people watching our traffic for abnormalities. We also have built in algometric systems so that if something happens an alarm will go off. First, we will look at the line, then call the reseller and tell them to contact their client. We give them half an hour to act. We are fast to warn the customer. We don’t wait for the operator to contact us because by then it is too late.” Marino believes that companies must keep their eyes on the ball when doing business internationally, but insists regulation has been effective, even telemedia issue 33

PRS in this increasingly complex international market where jurisdiction has become an issue. He said: “When we work with clients to roll out services in other markets then we consult with them on detail as to how to localise their services and make them relevant, both in respect of pricing and compliance. “Regulators and networks are becoming more and more active in auditing services and managing compliance issues. As well as aggregators maturing their own processes – due to better, more enforced responsibilities – as level 1 providers to ensure merchants work according to local code.” Single number services on pan-national regions can only be a positive for the international premium rate market. These services have been run in the Middle East for game shows such as ‘Who wants to be a millionaire’. The single number can access 22 countries in the Middle East and is advertised on stations like MBC (Middle East Broadcasting Corporation), which broadcast via satellite into the region. Williams said: “On the SMS side, the international market has a role to play as a single long number for SMS can be given and the provider can determine the country and network that the SMS originates from, and reply with a local SMS service to get the billing services started with the end user. “If we can provide a single number which is accessible for more regions, that will allow us to then engage with the user on PRSMS on a local basis,” Williams added. “Also from a number of countries we are able to collect a small revenue from the international text message.” For Bruckschloegl, regional single number services are all well and good but the ultimate goal must be a “global single number service.” He said: “Single number services are meant to be global not just regional. Regional single number services are a step in the right direction as it provides better and more widespread access. However, the ultimate goal must be to establish globally accessible numbers, which can serve global services such as Astra and Hotbird (satellite TV) and other global offerings like Adult content. “A global single number service is the Holy Grail. Not only would it make it much easier for customers to build advertising campaigns, but hijacking would be controlled more easily by collaborating with retail operators in several countries, there would be clear negotiations on caller cross rate. If you had one single number, a person could tell the operator here is the number range, this would increase market transparency and greatly reduce hijacking.” International SMS payments are seen as helping to drive international business as they allow merchants to enter new markets and monetise their services almost immediately and more easily than any other payment mechanism. However, payment on international SMS only happens when there is an

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interworked agreement between the two countries. Then there can be a settlement and money can be transferred. Williams said: “All cross-border micro-payment systems are a good thing and will become more prevalent. The joy of running with SMS is the fact that most people on the planet now have a phone and everyone that you want to enter into a billing arrangement with will definitely have a phone. So it is a very powerful mechanism but it still needs to be thought through.” Daniel Hems, txtNation’s Business Development Executive, warns that the best payment method in the international market depends on the service and the channel through which the customer is being engaged. Hems said: “For mobile – SMS payments and direct billing is an obvious choice and performs very well. Especially where ‘pay by mobile’ systems like Payforit offer MSISDN forwarding so that mobile numbers can be identified on a customer’s visit to the pay screen, enabling a single click purchase flow to complete. “With the explosion of apps in the last few years, then in-app purchasing through SMS has grown massively. This works particularly well where app developers/publishers release content, which could be downloaded to devices anywhere in the world. International SMS payments give them access to customers that would be difficult to match if relying on coverage support through Google and other app billing solutions.” Growth will depend on what region you are doing business in. In the more developed markets – North America, Western Europe, Central and Eastern Europe and Developed Asia-Pacific – mobile handset data and fixed and mobile broadband will drive growth areas, thanks to higher data usage and increased penetration of smartphones and broadband services. In the emerging markets – Latin America, Middle East, Emerging Asia-Pacific and North and SubSaharan Africa – mobile voice revenue are crucial to growth because of the lack of telecoms infrastructure. Many in these countries are still unserved customers. However, mobile technology is also increasingly seen as a way of providing the unbanked with access to money services. An often-used example of this is the M-Pesa mobile payment system launched by Safaricom, Kenya’s largest mobile-network operator, back in 2007. The system provided the unbanked of Kenya with a method of payment, creating positive change for the population. Around two-thirds of Kenya’s adult population have subscribed and 31% of the country’s GDP is now spent through mobile phone. As Williams says: “Mobile phones are the great enabler, it brings those on the fringes in from the cold, enables the unbanked to get into banking and changes people’s lives.”

Felix Telecom IPRN, Audiotex, Premium Rate, SMS Solutions

Felix Telecom is expanding. If youâ&#x20AC;&#x2122;d like to enjoy the benefits of working with a team of experts that have been leading the way in audiotext since 1994 - get in touch.

Contact sales@felixtelecom.com www.felixtelecom.com ME

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PRS

The increasingly international nature of the telecoms market has brought with it bountiful opportunities for the telemedia industry. Unfortunately, where there is money to be made there are the unscrupulous few who want a piece of the action and have no problems resorting to fraud to get it. Matthew Leach reports

s the telemedia business gets ever more international, as we have seen, the risks associated with traffic hijacking, hacking and fraud are also growing. So it is important to understand these issues and tackle them. To set the scene: there are two main scenarios for fraudsters to generate high margins from call hijacking, also known as ‘short stopping’, ‘number plan misuse’ and ‘non-legitimate destinations’. The first is the redirection of normal customer traffic. The way it works is an individual will approach a carrier claiming to be able to offer them a cheaper rate on a certain route, resulting in the carrier sending them the traffic. The fraudulent party will then divert the carriers’ traffic to a destination ending with a ring tone followed by a recorded message to keep the caller on the line for as long as possible. This can cause real problems as the fraudster will typically look for audiotext traffic and dump real traffic. The second scenario involves pumping traffic from a compromised PBX or mobile phone. Through low pricing, the fraudster will ensure that they are en route for a destination and will choose some unallocated numbers in the destination network. Their partner in crime will generate high volumes of calls to these unallocated numbers, which are all answered with long durations. Other carriers that receive these calls will either fail them as ‘unallocated numbers’ or return an ‘advance routing’ signal, which sees the traffic go to the fraudulent supplier. It is hard to detect because if the traffic is mixed in with legitimate traffic to the destination, normal average reports of the Average Length Of Call (ALOC) and Answer Seizure Rate (ASR) will not reflect the high answer rate. The end result is that the fraudster, who hijacks the traffic, gets a higher volume of chargeable calls and margin per minute. The carrier and their wholesale telemedia issue 33

PRS partner are left to pick up the pieces with customer complaints, disputes with partners in the supply chain and a tarnished image to deal with. The end customers and retail service providers also lose out because they are charged for services that they did not use. According to figures in a report from the International Interconnection Forum for Services over IP (i3 Forum) in May, the Communications Fraud Control Association the five main types of fraud that was reported to them in 2011 were: • $4.96bn from compromised PBX/Voicemail systems • $4.32bn from subscription and identity theft • $3.84bn from International Revenue Share Fraud • $2,88bn from By-pass Fraud • $2.40bn from Credit Card fraud Two years ago, the CFCA reported that they found the fastest growing fraud schemes affecting telecom operators were PBX hacking and IRSF. However, Josef Bruckschloegl,  Chief Executive Officer Kwak Telecom, a leading supplier of international and domestic premium rate numbers, believes that the industry has got much better at tackling hacking in the international premium rate market, but hijacking remains a real problem due to a lack of transparency and the increasing diversification of numbers. “The hacking situation is stabilizing,” Bruckschloegl says. “This is because the market is more mature. Companies know about hacking and call patterns and therefore it is easier to deal with a hacked PBX. “The situation with hijacking is getting worse because of the diversification of number ranges. For example, in Somalia there used to be one premium rate number range, now there are 10 different suppliers, which make it more difficult for the collecting party. That is why the volume of hijacked numbers is going up and the number of hacked PBXs is going down. It is a question of transparency of the markets, if you have 20 different number ranges in Somalia, it is difficult to identify who is the real owner of the number ranges.” Tim Williams, CEO of Felix Telecom, which specialises in IPRN, Audiotext, Premium Rate, and SMS solutions, insists that this problem will have a detrimental affect on the industry because the percentage of traffic that is being siphoned off could be the difference between the content provider making a profit or going out of business. He said: “To counter this problem you need to develop a relationship with the wholesale carriers, so they know to send your routes to you. The real losers are the advertisers/content providers of the service. If I am having 20 per cent of the service that doesn’t get to me, than that could be my profit gone and I won’t advertise any more. They are basically piggybacking on my advertising.” Although the industry appears to be getting to grips with hacking, it is still a large enough problem to affect even the biggest telecoms operators. In May, BT felt compelled to drop Yahoo Mail and replace it with its

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own email service, BT Mail, for its six million broadband users because of complaints of hacking. The move to BT Mail with its built-in anti-virus and antispam software ended a 10-year relationship between BT and Yahoo. There are two levels of hacking – hacking the PBX and hacking switches. Hacking through the PBX is mainly seen when fraudsters have found vulnerability in the security system that has been overlooked by the manufacturer. The hacking of a switch is a higher level of fraud and is much more complex, but tight monitoring of traffic enables it to be stopped. For hacking, a fraudster gains access to a PBX telephone system by breaking into the system and gaining the admin password. Once in the fraudster can set up call forwarding or a dial-through system to a highpriced destination. The attacker is then able to originate high volumes of calls to the infiltrated telephone system, usually using an IP-based source to avoid the chance of detection, and the system will forward the calls on to the expensive destination. The more sophisticated fraudsters possess programme software, which can initiate calls automatically, cutting out the need for the attacker to generate incoming calls. This has also been seen on smartphones, which have been affected with malicious software. This scam allows the fraudster to call particular destinations for free or at a much lower cost. He can then offer it to others (call-through services) or profit from a revenue sharing approach with a premium rate services operator. They are not the only ones who can benefit from this fraud – the terminating operator can charge for the calls and increase its revenue, and Value Added Services companies can earn a fee per minute or per call. Often there is co-operation between the fraudulent party and the termination operator/owners of the numbers (destination) in some cases to launder money. So what is the solution to these problems? Bruckschloegl estimates that Kwak Telecom have lost around 15% of its overall traffic to hijacking. Although it is very difficult to spot hijacked traffic there are measures you can take. He said: “Kwak Telecom combats hijacking by a lot of manual controlling and closer co-operation with carrier partners, number owners etc. to be sure collection on number ranges is accurate. “We work closely with our customers, to make sure calls are going to the right service, making sure it’s connecting to the right IVR not someone else’s. Sometimes it is difficult to see if there is a problem because they can copy your IVR. So you must always check your CDR (Call Detail Record). Check with the carriers that they are seeing the calls, so if it is hijacked you can act fast.” Williams adds: “If you are dealing with credible providers, they will co-operate with the police. If you are seeing multiple calls from a single CLI, then call the CLI and see what happens. Hacking is a criminal offence and needs to be treated as such. Basically

PRS someone is stealing from whoever owns the switch or PBX.” Bruckschloegl believes in the fight against fraud there is only so much checking that could be done by machine, but there has to be a human element to ascertain the “hard and soft facts.” Bruckschloegl explains: “Kwak has attack systems which monitors CLI and the call patterns, we also have 24-hour monitoring which can look at certain issues, look at the carrier, call the number, find out if it belongs to the customer. If the machine identifies something suspicious, the hard and soft facts need to be ascertained: has the customer being involved in fraud before? There needs to be a second level of checking, where the IT is not sharp enough.” For Marco Dunhof, chief commercial officer at Telserv, despite setting up businesses in and providing ‘domestic’ premium rate numbers in over 140 different countries, the company made the decision to avoid international premium rate numbers market because of the danger of fraud. Dunhof said: “Fraud is the reason we deal with domestic premium rate not international premium rate where you get a lot of fraudulent traffic. It is because of this danger of fraud that we would not supply, for example, an airline with an international premium rate numbers, because say a fraudulent party’s number is blocked and it is in the same number range as the airline, it will cause untold problems for the airline which has printed the help desk number in all the brochures. “To avoid this situation we would advise the client ‘please take the domestic number not the international premium rate as it will be closed down.’ If you had a number that was closed down, it is bad for your reputation, and it might not just be one country that you lose but a number of countries will lose trust in the company.” According to Analysys Mason’s report for the UK’s premium rate regulator PhonepayPlus International scale issues of non-compliance with Premium Rate services, brought out last year, the increasingly internationalised nature of fraud means that regulators face a number of challenges to address the issue effectively. The report states that supply chains in PSMS short codes are not only long but also often cross borders once or more between aggregators and fraud originators. This means international co-operation is required to carry out a comprehensive investigation and the possibility of enforcement. In some cases, the jurisdictional limitations mean that regulators cannot even investigate certain frauds. In addition, multi-country PRS aggregators allow content providers to target multiple countries by providing local PSMS short codes or voice numbers for each country, centralised monetisation, through a single contract. There is concern from some regulators that international PRS aggregators have in the past, knowingly or unknowingly, facilitated international PRS malpractice.

There are also disparities in the way PRS is regulated from region to region. The report highlights the fact that, to the best of its knowledge, the UK is believed to be the only country that has formal regulation for direct carrier billing, through its Payforit scheme. The UK mobile micropayment scheme, created and supported by all of the UK mobile network operators (MNOs), enables consumers to use their mobile phone account or prepaid balance to transact securely and safely when purchasing content and services on the internet. Kwak’s Bruckschloegl, however, rails against the idea that it is a problem of regulation insisting that fraud could be eradicated swiftly if some of the big players in the industry were not turning a blind eye to the situation. He said: “There is not a problem with the regulation, the law is very clear and very strict. The regulations are given, you are not allowed to hack and hijack. It is

The problem is that certain entities are collecting money from parties without proper documentation. Otherwise hijacking would not happen. It is about end-to-end responsibility a question of punishing these guys accepting the traffic – the premium rate number sellers who have both eyes closed, big entities, big carriers who have collaborated in the fraud. “You have regulation, a clear infrastructure, you have paperwork for the authenticity. The problem is that certain entities are collecting money from parties without proper documentation. Otherwise hijacking would not happen. It is about end-to-end responsibility.” So what is the best way forward? The key is communication not just between the regulators in different countries but also within the industry. There are companies out there, such as Aribbacom, which has been set up to help fight against hijacking. But too often the industry players are not doing enough. There must be an element of self-regulation. The job of the regulators is becoming harder and harder thanks to technological innovation, jurisdictional challenges, not just from country to country but also industry to industry. For example, some of the telecoms fraud has a money-laundering element to it and could come under the financial services authority’s jurisdiction. Sharing of intelligence and looking at fraud on a case-by-case basis at international level is a step in the right direction. Best practices must also be discussed between regulators in an effort to outwit the constantly-evolving fraudsters. But at the end of the day regulators can only do so much and it is the industry that must step up and take a stand before it is too late.

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quasi-physical

PAYMENTS

Let’s get

or a long time, Swedish people could jump on a bus and pay for their bus fare with their mobile phone after grabbing a quick snack from a vending machine and both transactions would arrive on their telecoms provider’s bill. Dublin based drivers can charge the M50 toll road to their mobile bill instead of hunting for elusive cash and blocking up the toll gate and for a long time. Dublin parking meters were enabled with text based payments without credit cards. Neither of these was an early implementation of m-wallet, but an extension of the same facility that mobile consumers use to buy a music track, game or video. Or, to put it in the argot of the MNOs, using the mobile bill to purchase “quasi-physical goods.” So what was stopping products such as this from being available in the UK? Could AIME with its broad reach of membership apply some influence across the value chain and could this facility extend into other products like digital vouchers to trade for your morning coffee, or a snack, or e-tickets for the cinema, or other reasonably priced ticketed events? So, earlier this year, AIME arranged for senior managers of the four UK mobile networks to meet with key players from the mobile payments industry, a legal expert and a consultant to examine the potential for a growth in services using mobile payments for such quasi-physical goods. Most of the MNOs in the room were willing to trial new opportunities and new business lines. Some concerns were raised about investment in these areas when the UK’s spread of contactless transactions through credit and debit cards (moving ultimately mobile devices) could compete – ignoring for the moment that unbanked and under 18’s will not be able to use contactless payments for some time yet – but the main blockers were two pieces of European financial regulation that were lurking in the background and providing a potential barrier: The E-money Directive regulations and the EU Payment Services Directive. Both regulations provided an exemption for network operators if they used the telecoms based payment facility in particular ways. Start to use prepay cash for goods instead of minutes and e-money issues may arise. Start to provide a payment facility between a consumer and a merchant without “adding value” and potential issues with the European Payment Services Directive can emerge. Push

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things too far and mobile operators may have to become either e-money licensees or Payment Service Providers (PSPs). Ask any telecoms provider if they are able to segregate their billing for consumers so that third party products they purchase fall under a financial wing of the operator and telecoms billing falls under the telecoms wing and they will go very pale and look at you with pity due to your lack of understanding. Ask an operator to separate a pre-pay top up into money for minutes, text and data and a reserve for spending on the busses and they really will think you are smoking something… It is feasible that some time in the future, a telecoms provider will have a financial arm (some do already) and can put third party products through its financial services, but until 100% of the mobile population have m-wallets and credit or top-up cash accounts, there is nothing to replace the ease and convenience of making small value spontaneous transactions onto the monthly bill or from your pre-paid credit using 09 numbers, shortcodes or Payforit. The 2007 version of the EU Payment Services Directive (PSD) essentially obliged any party operating in the EU that was not a licensed bank or an e-money issuer and was providing a payment service, to become a registered and regulated Payment Service Provider and be subjected to financial regulations that protect both the consumer and the merchant. However, PSD had some exemptions that allowed certain services such as store cards non-bank ATMs, telecom operators and others to continue their existing business lines. Over the years and due to some exploitation of the exemptions and due to significant changes to payments technology across Europe, a rewrite was scheduled to close emerging loopholes. Loopholes in exemption wording allowed the rapid emergence of credit card sized gift cards that you can find in greeting card shops and supermarkets. The intermediary between the retail store selling the cards to the consumer and the merchant offering the gift card face value, if not operating under financial regulation could cause issues with cash flow and financial reserves. This was probably the reason that administrators for HMV and Comet last year stopped taking the branded gift cards for a period, causing significant consumer issues and bad press. The administrators could not guarantee that the consumers’ payment for the gift card had flowed through to the retailers’ bank accounts. Similar issues existed in Europe and the exemptions have been

PAYMENTS reviewed along with a general review of PSD. Unfortunately, despite the reported “extensive public consultation,” AIME does not believe that the proposed rewrite to some of the exemptions were given the public scrutiny that they deserve or by the sectors they exempted. In July, AIME gained its first viewing of the revised PSD as it was making its way into the European Parliament for ratification after the summer recess and immediately had concerns with both the proposed tightening up of the exemption for telecommunication providers and the wording around who actually constituted a Payment Service Provider. On the assumption that telecommunication providers (both fixed line and mobile) who are providing a “payment service” are potentially captured by PSD (taking money from the consumer and passing it to another party that has provided a service or product to the consumer is a payment service) the reworded exemption significantly narrowed the field for what could be provided under the exemption.

Digital Content Previously, the exemption covered goods and services consumed via telecommunications or its devices. This has been narrowed to only “digital content”. We are sure that voice based (analogue) services fall out of the definition of “digital content” along with services where the product is not strictly digital but is a facility e.g. voting on TV, competitions and charity donations. This wording presents lack of clarity for the industry and will open speculation on what services are, or are not, digital.

AIMEs intention is to lobby the UK government to improve clarity of the wording providing the exemption, prior to the revised PSD being ratified by the EU. Afterwards, it will be impossible for the UK government to re-interpret the exemption to anything that is different or inferior to its current interpretation. AIME has estimated significant market losses as a result of the PSD exemption wording if left unchanged.

Worst Case Scenario The current annual net revenue for the voice services market for 09 Premium Rate and 118 Directory Enquiry services is £350 million. If voice services fall outside of the exemption, a bulk of these services may disappear. While it may be possible to argue that Directory Enquiry services operate under a termination fee and not strictly a payment to the merchant, this becomes harder for 090 premium rate services causing a potential £178 million loss. The current annual net revenue for Payforit and Shortcode mobile services is £360 million. Approximately £240 million could remain after “nonancillary” and non-digital services are removed representing a £120 million annual loss and suppression of growth. This is just UK. Magnify this issue across 28 European countries and potentially €4 billion is at stake.

Next Steps

AIME represents all UK mobile operators, some fixed line operators and a bulk of the service industries that either supply the services or enable the services that may be affected. AIME has consulted with PhonepayPlus and the mobile operators’ regulatory Ancillary Services body, Mobile Broadband Group to ensure our interpreThe exemption statement also talks about where the tation and concerns are aligned. While we may have digital content is provided as an ancillary service to the telecommunications provider’s service. While we believe some minor differences of opinion on interpretation of the “ancillary” element of the exemption our major conthat the intent of the wording is that the payment servcerns are aligned. ice is ancillary (i.e. not core business), AIME is conAIME has written a White Paper on the potential cerned that the interpretation of this wording may cause issue, which can be downloaded from www.aimelink. telecommunications providers to disallow non-ancillary services. As most telecommunications providers do not intimately know the services that are at the end of a shortcode, on a Payforit transaction or on a premium rate number, blocking “non-ancillary” services may be hard to implement. The victims are likely to be any service which does not look like a typical communications service, e.g. virtual currencies, gifts, voting, gambling, games, charity donations and others.

The current annual net revenue for the voice services market for 09 Premium Rate and 118 Directory Enquiry services is £350 million. If voice services fall outside of the exemption, a bulk of these services may disappear

Spending Caps The final concern was over a new monthly transaction cap of €200 per consumer. In the main, as very few consumers exceed this value on services it should not be an issue, but the cost to an operator of implementing a hard stop at €200 for third party services, would be penalising and disproportionate for the exemptions intent.

org (under initiatives/forums) and this has been shared with as many interested parties as possible. AIME will be meeting with the UK Treasury and the Financial Conduct Authority in early October to determine what actions the UK will need to take to protect its businesses and will report back to Telemedia publications and AIME members.

telemedia issue 33

PAYMENTS

Banking on m-payments

he rise of mobile payments is shaking up a wide variety of industries. Retail, digital entertainment and the media are the obvious ones, but the raft of new mobile payment tools is also having an impact on banking: and this is now seeing the battle as to who actually runs payments get interesting. Currently there are three broad types of nontraditional player impacting the payments world that was once solely the preserve of the banks. Firstly, retailers and brands are starting to leverage their customer relationships. Wal-mart in the US is a great example. It has opened a bank in Mexico and is looking at expanding this into the US. In the UK, supermarkets Sainsbury’s and Tesco also now run banking services, attempting to link together customer loyalty, payments and banking. Secondly there are a raft of up and coming innovators such as PayPal, Amex, The Lending Club and Stripe, Square and even Paddle. These are compa-

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nies that are all highly innovative and looking to take a slice of the transaction market. Thirdly, there are the companies that are really reshaping how people think about banking, the best example being Starbucks. In Q1 2013 $1billion was deposited on its pre-pay loyalty card. That’s $1billion that would normally have been in banks. And no one is going to put money on to something like that unless they really trust the brand. This is the kind of thing that is reshaping the retail banking industries – brands outside banking that consumers trust enough to hand over this kind of money and use. “Only time will tell how successful they will be, but they do command great brand loyalty and trust,” explains Rick Woodham, Head FSG BSG Group – Asia J&K at financial technology provider FIS. “Personally I believe that most of these companies will become front end players that consumers use to manage the use of their bank accounts to make payments. People really trust their banks. They know that essentially banks have the security and set up to make it as secure as possible and that their money is safe.” But these new players – and new technologies – are going to have a far reaching impact on banking as we know it, believes Woodham. “The influence these new players will have on banking is that it will focus banks on customer service, interaction and experience,” says Woodham. “What PayPal and

PAYMENTS Starbucks have successfully done is offer a great and simple customer experience. Banks have traditionally been very rigid in their services and systems and customer experience has perhaps suffered. Banks now realize that they have to improve how they interact and service their customers and this entails going omni-channel.” It is hard to read anything about retail without having to understand the idea of ‘omni-channel’ and this is one of the fundamental shifts in consumer habits that is seeing retail banking change. Omni-channel is not about ‘anytime anyplace’ it is about understanding customer intent and it is not a one-size-fits-all offering; they have to tailor channel experience to the customers. “You need to be able to offer the customer channels and services they want. Amazon has been extremely successful because it offers the users what they want where they want across platforms,” says Woodham. “It’s not about whizz-bang technology but about looking at the customer as the channel.” One of the key technologies that is creating the consumer hunger for an omni-channel approach – and one of the key technologies that make it possible – is, of course, mobile. And stepping into this omni-channel world is Barclays Bank with the revamped version of its highly successful PingIt service. Where once it was mainly just a P2P payment tool, the new iteration launched this month in the UK, allows consumers with the app to scan QR codes on adverts, utility bills and even on TV and then buy those goods using PingIt – which essentially means if you are a Barclays customer, with your bank account – in six clicks (five of which are your security number). This turns adverts into a direct sales channel, which is something that mobile payments has until now merely promised to do, and allows consumers to buy in whole new ways. But this is only the start of how m-payments is going to gain ground in 2013/14. Oxygen8 has already formed a partnership with MPayMe to offer a similar wallet experience that uses QR codes and in White Wallet in Sweden has already been allowing consumers to check out in supermarkets by scanning a QR code with the Wallet app. But really payments is going to be about choice, believes Maria Grant, Head of Product Development, Oxygen8 Group explains: “The approach that consumers want is one where they can choose how to pay from a single payment app. That is where Payforit, credit and debit card, loyalty points and even PSMS all fit in. They have to have that choice at the point of payment. Concentrating all these into a single payment tool is our long term strategy.” And the battle is on between banks, brands and service providers to make this happen. According to a study in the US by Cognizant and Monitise, consumers are increasingly expecting banks, rather

than anyone else, to help improve their mobile lifestyles by providing anytime, anywhere capabilities, customized user experiences, shopping and social features, and value-added services. This, the study states, represents a new opportunity for retail banks to drive customer loyalty, attract new business, and generate more revenue. “Amid the growing proliferation of digital channels and rapidly evolving consumer behavior, retail banks can no longer afford to adopt a one-size-fitsall approach in devising and enhancing their mobile strategies,” said Vin Malhotra, Consulting Partner for Banking and Financial Services with Cognizant Business Consulting (CBC), Cognizant’s consulting practice. “Providing innovative and personalized mobile services based on consumer segmentation will enable banks to not only run better by maximizing their investments, but also run differently by strengthening customer engagement and driving greater adoption of mobile banking for competitive differentiation.” Lisa Stanton, President of Americas at Monitise adds: “Smartphones and tablets are quickly becoming the main contact point between consumers and financial institutions. Integrating value-added services such as mobile payments directly into a bank’s mobile application doesn’t just build customer loyalty, but it also grows revenue and fights the growing threat of disintermediation.” This process of rethinking how existing technology can be repurposed to meet the demands of the omni-channel consumer is also extending to some unexpected areas too. “Banks still have much to learn: they have a vast amount of technology already in place and a huge amount of information about customers that they aren’t leveraging,” says FIS’s Woodham. “For example ATMs don’t tell you anything. They could give you a much more personal experience and allow you to do a lot more. I think one of the greatest banking innovations of recent times doesn’t involve the web or mobile but ATMs. In Japan you can now use an ATM to apply for a loan, get loan approved and take out the money. This is clever, customer centric use of existing technology.” So where does this all leave banks: are they slowly being cut out of the loop? Will the future of banking be something centred around technology brands such as Apple and Google, Vodafone and Amazon? FIS’s Woodham agrees: “It’s not a bank or nobank option, really it is about partnering. Banks are likely to get pushed into the background at bit. They will end up handling the mundane parts of consumer banking behind these brand front ends. Many banks recognize that and are looking more now at how they take what they do and use Google to get it out there. Banks and brands now have to work together to develop the right services for the customer. That is the biggest change of all.” telemedia issue 33

EXHIBITION, SEMINARS & NETWORKING 16-18 October 2013 NH Barbizon Palace Hotel, Amsterdam

Destination Amsterdam

platinum sponsors

BUilding on the success

of the Marbella event last spring, World Telemedia Amsterdam is now gearing up to deliver a wider range of insight, learning and case studies for the industry, that this time will see drill down into not only the vertical markets where telemedia can be put to use, but also in looking inwards and the very workings of the industry in turbulent times. Outlined here is the show programme and of course a call for your input to make it the show that you want it to be. This year we are majoring on the issues facing the telemedia industry – particularly the issues around international markets, traffic and of course fraud, crime and arbitrage. We will of course also be looking at how telemedia technology is being used in everything from chat and dating to retail, gaming and marketing. The event will also feature, running alongside it, the second mAdult Summit, looking at how to capitalize on growing numbers of smartphone users if you work in the adult business – both from a content point of view and a billing and service provision environment.

sponsors

Powering Mobile Billing in Latin America

LEARN • DISCUSS • INSPIRE Everyone attending the conference at World Telemedia Amsterdam 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 telemedia 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, services and tools of the telemedia trade through a series of case studies, live demos and more on the show floor.

LEARN

DISCUSS INSPIRE

CALL FOR PAPERS There’s still time to get involved. What we are looking for: • Leading case studies across the topics laid out in the conference programme showcasing new technology and service use, new revenue streams • Key clients within the print, TV, online, adult, gaming, gambling, advertising, marketing and retail industries to co-present how telemedia is revolutionising these and all other vertical markets • Telemedia industry experts in international markets, arbitrage, security, fraud, hijacking and business models • Experts in mobile payments, regulation, marketing • Any brilliant ideas we haven’t thought of! CONTACT paulskeldon@me.com

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

www.wtevent.co.uk

telemedia issue 33

EXHIBITION, SEMINARS & NETWORKING 16-18 October 2013 NH Barbizon Palace Hotel, Amsterdam

Conference TELEMEDIA BUSINESS OPPORTUNITIES

Draft agenda STATE OF THE TELEMEDIA MARKET

overcome them • The role of regulation • Where technology fraud goes next

Telemedia services are changing as consumer demands, devices and the way the international telecoms market changes. We kick off with an overview of where telemedia has been and where it is heading – and what opportunities it offers.

IPRS • International PRS market opportunities • Assessing pan-national regions such as the Middle East for single number services • Arbitrage and traffic security • International SMS payments

OPPORTUNITIES FOR IPRS IN WHOLESALE MARKETS • How does wholesale affect your IPRS business • How does traffic flows globally • How to avoid hijacking • How wholesales markets are changing • What opportunites these changes offer

BUSTING THE AFFILIATE MARKETING FOR PRS ISSUES With record fines for the UK industry and confusion as to who is responsible for handling affiliate marketing – and paying for breaches – we get the key players together to discuss the issue. PLUS special invite only ‘closed session’ lunch to really get into the issues

NEW TECHNOLOGY SCAMS AND FRAUD

BEATING THE TRAFFIC HIGHJACKERS • Traffic flow and where the jackers fit in • How hijacking works • How to prevent hijacking

M2M PSMS OPPORTUNITIES • Tracking everything from packages and vehicles to your kids • How to monetize tracking applications • How to use SMS to generate communication between systems • How SMS can be used to update social media sites • Using SMS to pay for web access, access to venues and any other ‘content’ • SMS as a verification mechanism

CALL MANAGEMENT SYSTEMS • What’s on offer call management-wise • How to do it on a budget • Do it yourself or outsource… • … and what are the ROI implications on doing each? • How do you build your own call management system?

SPEAKERS INCLUDE: David Ashman, Director of Industry Affairs, AIME Mark Birkett, Square 1 Communications Josef Bruckschlögl, Kwak Telecom Danny Marino, txtNation Louisa Harris, Director, Velti Pay Speaker from PPP Speaker from EE

Each year it seems another person in our industry feels the terrible effects of cancer, but on the 8th February this year, the Telemedia world felt a collective sense of loss at the news that our dear friend Alex Ruff had died aged 45 after an 18 month battle with cancer. Alex had been the life and soul of numerous World Telemedia events (parties) – many of which have of course been held in Amsterdam. So after consultation with his family and in response to the many individuals that have approached us , we’d like to dedicate this year’s show to his memory and launch “The Ruff Riders Appeal” to support The Bobby Moore Fund for Cancer Research UK which raises money for research into bowel cancer. Starting on Tuesday 15th at Telecom 2’s offices in Canary Wharf, London, representatives from a wide range of Telemedia companies will embark on an epic 210km bike ride to Amsterdam. There will also be a second meeting point approximately 10km outside of Amsterdam where additional participants can join the group on rented bikes, taking a canal side ride route through Vondel Park and into the city. We have also extended an invitation to Alex’s many friends and colleague across mainland Europe to coordinate a similar event on his beloved motor cycles. Both groups will complete their journey at the NH Barbizon Palace Hotel at exactly 17:30 on the 16th October – where gathering supporters will cheer them all home in time for welcome drinks. World Telemedia 2013 will officially open later that evening. All participants and supporters will be asked to wear curly wigs in homage to Alex’s own unique image – providing us (and Alex’s family) with some unforgettable photos to enjoy for many years to come. Free drinks will only be given to those wearing a curly wig! • Become a rider 190km or 10km • Sponsor the riders • Promote the appeal • Welcome with a wig Please note this event is not exclusive to World Telemedia attendees, so please do spread the word throughout your personal and professional networks.

• What the new frauds are • How to

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

www.wtevent.co.uk

telemedia issue 33

OPPORTUNITIES IN TV, PRINT & MEDIA

• Latest trends in Print, TV, radio and media interaction • Where social media fits in with telemedia monetization • Revenue models • Upselling from freemium models • Exploiting second and third screening • Exploiting online services

RETAIL & COMMERCE

• Latest trends • Market opportunities for what you do • What retailers are looking for • What consumers want

GAMES & GAMBLING

• What games companies, gambling operators and events companies are looking for • The opportunities in payments, ticketing and service delivery • Market opportunities for your existing tech

ADVERTISING AND MARKETING

• Latest technology • Consumer interaction with ads • Social media • Traditional telemedia in new roles

TICKETING & LIVE EVENTS

• How to use SMS, PSMS, IPRS and more to create interactive offerings around live events • Where M2M SMS helps ticketing services • How to create marketing and revenue opportunities with mobile telemedia around live events • Extending the event beyond the confines of time – and how to make money from it

CHAT, DATING & SOCIAL MEDIA

• What are the trends in chat and dating… • … and what do they mean for traditional telemedia players? • Where are the new opportunities… • … and how can you exploit these openings? • What role does telemedia play in social media P2P interaction? • Where Chat and dating fits in with other verticals.

BILLING & PAYMENTS

• Latest trends in billing, payouts and billing services across platforms • How consumers are using payments • Where Bitcoins and other virtual currencies fit in • Mobile wallets? Really? • Payforit4 verses other payment tools • Where telemedia billing fits in with Apple, Amazon and PayPal

mADULT SUMMIT

VERTICAL MARKET OPPORTUNITIES

EXHIBITION, SEMINARS & NETWORKING 16-18 October 2013 NH Barbizon Palace Hotel, Amsterdam

BUSTING THE MOBILE MYTHS

• 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

• 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 & CONTENT

• A breakdown of the value chain for adult on mobile • How different business models service this 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 • Working with operators

MOBILE PAYMENTS • Credit card versus mobile billing • Overview of the different mobile payment tools available • Direct operator billing verses third party tools • Economic 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)

Speaker Line up at www.wtevent.co.uk

PAYFORIT4 SPECIAL WORKSHOP Our team of PAYFORIT4 experts set out to show you how the payment tool has developed, where it is set to go next and what it offers all vertical markets.

Speakers include: Rob Thurner, Burner Mobile Adam Maxted, VP Sales – media, Velti Speaker TBC, OpenMarket Glen Elliott, Probability Anthony Baladi, Velti Tom Omeara, Strategy Eye Lilach Bullock, Socialable Tim Green, Mobile Money Revolution Tony Pearce, GamesGRABBR Speaker TBC, EE Monty Munford, Author, Journalist and Centurion Speaker TBC, Vodafone

Note: this is a guide to the speaker line up only and is not to be used as a guide to the actual event on the day as this has been printed many weeks before the show line up is finalised

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

www.wtevent.co.uk

telemedia issue 33

summit of the century

EXHIBITION, SEMINARS & NETWORKING 16-18 October 2013 NH Barbizon Palace Hotel, Amsterdam World Telemedia is pleased to announce that it is partnering at this year’s World Telemedia event in Amsterdam on 16-18 October with the leading Digital Entertainment Industry networking group The Centurions, to co-present the Centurions’ annual European Summit as part of the World Telemedia conference programme. Filling the afternoon slot on 17 October, the Centurions Summit provides existing Centurion members with a thought leadership programme that will give them insight into the latest thinking in social media marketing, mobile payments, new technologies for digital entertainment and venture capital/investment strategies. And the session is open to World Telemedia delegates too. Everyone taking part in the two and a half hour summit will learn the latest thinking in digital and investment and how to apply it to their business. It is also an ideal opportunity to lead into some quality networking between leading telemedia industry players and the digital entertainment world. Speakers lined up so far for The Centurions Summit at World Telemedia Amsterdam on 17 October will be:

Social Media No smoke and mirrors allowed, only the whole truth and nothing but the truth. Lilach Bullock, Socialable

Venture capital and funding for your business Raising capital to expand and develop your business is essential. Here we learn how to get what you need. Tom Omeara, Strategy Eye

Mobile Money Creating and using effective mobile money solutions is going to be key to the next wave of m-commerce and payments. Learn where its going from one of the world’s experts Tim Green, Mobile Money Revolution

Digital Entertainment Panel Discussion Our speakers get together to talk about the impact of digital entertainment on the m-commerce market and what opportunities it offers everyone in telemedia and beyond. Featuring Tom Omeara, Strategy Eye Lilach Bullock, Socialable Tim Green, Mobile Money Revolution Tony Pearce, GamesGRABR Hosted by Monty Munford MORE SPEAKERS TO COME

JOIN THE CENTURIONS AT WORLD TELEMEDIA 17th October @ 16:30 - TELEMEDIA VERTICAL MARKET OPPORTUNITIES TRACK Leading Digital Entertainment Industry networking group The Centurions co-present their annual European Summit as part of the World Telemedia conference programme. Centurion members AND World Telemedia delegates meet to learn and discuss how to apply the latest thinking on digital and investment to their businesses. Speakers and sessions include: Social Media - Lilach Bullock, Socialable VC and funding - Tom Omeara, Strategy Eye Mobile Money - Tim Green, Mobile Money Revolution Digital Entertainment Panel – also features Tony Pearce, GamesGRABR / Hosted by Monty Munford www.wtevent.co.uk/wt_2013/seminars_Day1.html In association with

SPECIAL OFFER to Centurion Members contact info@centurionsconnected.com for details

telemedia issue 33

DATA

Searching for the

sweet spot Delivering personalized experiences is key to marketing and commerce in any field, and with consumers increasingly willing to share their data with brands it should be a no-brainer. But as Michael Schirrmacher, UK Sales Director, Webtrends, points out, brands aren’t getting it

n an increasingly competitive marketplace, businesses are striving to deliver valuable, relevant and personalised experiences for customers online. Whilst 74% of businesses know the benefits of personalisation, only 19% are actually doing it, according to eConsultancy. Consider then that 75% of consumers are willing to have retailers or brands use their personal information if it results in an improved shopping experience and it quickly becomes clear that a disparity exists. The difficulty here is that the ‘right’ experience can differ for each customer. Consumers today are far more empowered and have come to expect speed and ease-of-use through all available commerce channels. This is where behavioural segmentation and targeting comes into its own. By enabling businesses to deliver content and a tested and proven online experience, segmentation can identify and engage high-value customers with the most relevant content across a multitude of digital channels. This information can help prove, or disprove, the current marketing strategies of a business and guide future planning through a deeper, more accurate and evidenced understanding of customer behaviour. Behavioural segmentation can be achieved by using data collected from the customer, such as device type, language, geographical location and specific visitor behaviours whilst active on the site. Recently released solutions have that the ability to capture all of the customer’s actions in real-time, as soon as they occur. For example, John searches for holiday packages in America using a search engine, his actions are noted as soon as this search takes place and every page thereafter. Once John has viewed three or more products he is scored as a high-value customer, triggering a highly relevant offer based on his in-session behaviour, such as “book an all-inclusive holiday to LA today and receive 20% off.” Businesses also have the ability to combine historical, offline and in-session data to achieve a unified view of customers and deliver highly targeted and relevant experiences in real-time. Social media can play an important role in segmentation and targeting as visitors that are active on social platforms may be less responsive to classic direct marketing strategies. Therefore it may be beneficial to give those users access to inside information and exclusive promotions – instilling a sense of partnership between the user and the brand. Email plays a similar role as

telemedia issue 33

recipients can be segmented according to their actions, for example unresponsive, opens or clicks. These segments can then be targeted in new, more effective ways to achieve the business’ goals, such as presenting a more attractive and relevant subject line to increase the click-through rate. One way of analysing the data collected is through building visitor segments based on real-time insight. Analysis of the data collected can help a brand to discover new opportunities for segments that perhaps had been previously overlooked, and through utilising newly available solutions you can integrate demographic and offline visitor records with the stored online data to segment complete customer profiles and drive action. Data enables businesses to create customer segments in real-time and supports marketing decisions based on up-to-date and current visitor insight. Solutions that offer real-time analytics ensure all results from queries on data are current, rather than historical. There are also tools available that enable businesses to build both simple and multi-dimensional segments, allowing them to explore the characteristics and actions of online visitors and customers. Brands can use data collected from the behaviour of individual visitors to produce the most accurate segments possible, targeting them with content and promotions that offer a personalised and more positive experience. Data can also be used to provide relevant content for customers through the use of historical and current insight. For example, a customer browsing holidays in the Mediterranean will receive relevant offers and experiences based on in-session and historical behaviours – such as an email containing a promotion for “50% off holiday packages to Spain” – this can encourage the customer to complete the transaction process. Using data in this way can decrease the amount of emails considered to be ‘spam’ to customers and encourage recipients to open and take advantage of the offers, reassuring them that the communications are likely relevant and of benefit. Companies are able to identify high-value customers through visitor scoring, a point-scoring system that uses the behaviour of the customer to indicate the likelihood of conversion. However, this mostly occurs after the visitor has left the site and whilst this is handy for re-targeting, there are solutions available that allow in-session, real-time scoring for precision targeting before the user leaves,

DATA which can lead to a significant increase in conversions and revenue. In addition to this, brands are able to build more comprehensive segments based on multiple services, including past, recent and live activity, as well as any offline data, allowing the brand to target the correct content to each visitor immediately. Offline data can include data sourced from customers shopping instore through customer card accounts or loyalty card schemes that record purchases made, and the time and location in which this took place. With this combination of data, companies are able to build a behavioural pattern for each individual customer and use this information to provide more relevant promotions and offers based on their activity both online and in-store.

Benefits There are many benefits of using data for segmentation and targeting efforts in order to create more personalised experiences online. Relevance is key for consumers and businesses alike, particularly when it comes to promotional content. This can span all digital channels and the customer’s lifecycle. Xonadu Advert - Half Page - Telemedia Magazine - version 2.10.1 Another benefit is the ability to serve multiple marketing efforts by different team members that are

creating and using different segments simultaneously based on their specific campaign objectives. This benefits the efficiency of the business and allows each team member to work individually at the same time, but striving towards one common goal. Additionally, companies are able to save money on marketing efforts by targeting each segment specifically, rather than sending marketing materials to every customer regardless of their relevance and simply hoping for the best. Segmentation and targeting solutions enable a business to provide content, promotions and experiences that are finely tuned to the attributes and behaviour of website visitors. Brands can use in-session data to provide the right experience for each visitor while they are live on the site, dramatically increase the likelihood of converting the visitor to a sale and preventing them leaving for a competitor. This analysis combines historical, offline and in-themoment data to improve both the performance of online and offline marketing programmes, as well as enhancing a brand’s understanding of customer relationships across multi-channel engagement. Using data to provide a personalised experience for customers and visitors can enhance the shopping process, which in turn Date: 28/03/2012 09:47 benefits the brand reputation, conversion rates and revenue.

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CRM

Keeping pace

with

customer experience

here has never been a more exciting – or challenging – time to be a communication service provider (CSP). The rapid adoption of connected devices such as smartphones and tablets has created an unprecedented window of opportunity to increase revenue and services. But with so much up for grabs, the industry has never been more competitive. To be successful, CSPs need to stand out and differentiate their offering to consumers, partners and content owners. Analysts at CCS Insight expect nearly one billion smartphones will be sold this year. By 2017 it expects nearly five billion smartphones to be in use around the world. As a result, the volume of data being managed by CSPs will grow dramatically through this period not only creating a sizeable revenue opportunity, but also increasing the technological and customer service challenge faced. It is critical, therefore, that CSPs have in place the right customer experience programmes to not only attract customers, but also to retain those they already have. A recent Oracle study, entitled “Global Insights on Succeeding in the Customer Experience Era,” found CSPs risk losing up to 20 per cent of their annual revenue if they provide a poor customer experience. In today’s challenging economic times

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this is a significant amount to risk for want of a relatively simple solution. Encouragingly, CSPs recognise that their customer offerings need to change, and 18 per cent are planning to increase their spending on the relevant technologies in the next two years, while 14 per cent already have an advanced initiative in place. With an increased focus on enhancing the customer experience, what processes should CSPs be prioritising? First and foremost, CSPs need to get the basics right, and establish a strong foundation of core services that provide customers with the experiences they have come to expect. To truly engage users and turn them into brand advocates, CSPs must ensure that they remain price-competitive, maintain a stable and reliable network, and offer customers the flexibility they need to enjoy their services with minimal hassle. CSPs also need to deliver a consistent experience across all customer touch points, be it in-store, online, through social media, or over the phone. However, according to the Oracle study, a quarter of CSPs cited siloes within their organisation as an obstacle to delivering a satisfactory experience, suggesting there’s much room for improvement. Today, customers want to interact with brands at the time and place that suits them, which means that CSPs will benefit from having integrated solutions capable of providing a holistic view of the customer lifecycle regardless of whether users interact with a brand via a multi-channel communications platform or directly in-store. Access to increasing amounts of customer data and a complete view of the customer lifecycle empowers CSPs to rapidly launch new services and offerings unique to each customer. For instance, if a CSP is able to identify that a customer regularly downloads data rich content they can offer to change their tariff to suit their consumption habits, or even offer the chance to download the content at a later time at a reduced rate to manage load on the network and overall experience. This level of personalisation – and the speed at which it can be carried out – not only enhances the customer experience, but CSPs’ revenue also. Likewise, orders must be fulfilled quickly in line

CRM with customer expectations. Customers expect things when they want them,

from the moment they order them, especially when dealing with providers of digital services which should be available at the switch of a button as far as consumers are concerned. Finally, CSPs need to find a way to stand out in an increasingly crowded marketplace. One way this can be achieved is by working with other industry players, such as handset manufacturers and application developers, as well as content owners, rights-holders

and retailers to offer a unique service that cannot be received anywhere else â&#x20AC;&#x201C; from partner discount schemes to added value extras such as competitions and VIP experiences. As the telecoms market has changed, so have customer expectations. If CSPs are going to realise the opportunities available they need to rapidly respond to changing market conditions, offer personalised and unique services, and make full use of their data to deliver a superior customer experience. Failure to keep pace with this change could be potentially fatal in current economic conditions. After all, if you stand still while everything around you moves forward, youâ&#x20AC;&#x2122;re effectively going backwards.Â

If CSPs are going to realize the opportunities available they need to rapidly respond to changing market conditions, offer personalised and unique services, and make full use of their data to deliver a superior customer experience

telemedia issue 33

Build loyalty & they will come

engagement

or many businesses the debate has long been whether to build an app or a mobile website. Then vendors, naturally, started pushing the idea that any self-respecting retailer needs both – one for the passing trade that hits through search and one to service those loyal regulars who want a deeper, richer experience. But as the mobile commerce ecosystem as evolved and developed it is becoming increasingly clear that anyone who has dipped into m-commerce is finding that actually monetizing both their app and their website isn’t as straightforward as perhaps they first thought. The truism of “build it and they will come” isn’t quite as true when the market is as crowded as it is today with apps and m-websites. So now the m-commerce world is being sold a whole new concept: monetization advice. As more companies have rolled out apps in particular, but it applies to m-web too, they have found that getting traffic to them and then getting people to actually transact on them is proving very hard to pull off. And many app developers have started

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to not only help design and develop apps for brands, but also have started to build into that process how to make these apps attractive, how to encourage people to find them and how to get them to keep using them. And its more difficult than you’d think. A survey by tracking company Adeven reveals that two thirds of apps in the app store get little or no downloads at all. These ‘zombie apps’ get fewer than 100 downloads a day (most get far, far fewer, says Adeven), which make them unsustainable as a business. But these zombies clutter the app store and can make it hard for your app or brand to rise to the surface. Furthermore, a recent Flurry Analytics report found app retention levels can fall sharply after the initial install – to 24% after 3 months and just 4% after 12 months. In fact, this summer research by eBay and Conlumino – commissioned to celebrate the former’s app’s fifth birthday – found that 64% of apps that started development were either never finished or were rejected by app stores. And apps aren’t cheap: the average price of a basic app is now around $18,000 (£12,000) and more advanced apps are an estimated $83,000 (£55,000). eBay and Conlumino believe these failures account for around $4.85 billion (£3.19 billion) of development costs globally. Mind you, at least these brands are spared the ongoing costs of updates and overhauls to cope with new devices and major operating system upgrades, which can cost up to 42% of the original development cost. “Clearly this shows that retailers are racing to take advantage of the opportunity to engage with consumers via their smartphones and tablets,” says Fadi Shuman, CEO, Pod1. “Yet what it also shows is that too little thought is being put into whether an app is the right

engagement way to move forward, or indeed looking at how one is going to be executed and supported effectively.” Olivier Ropars, senior director of m-commerce, eBay Europe, is more direct: “Sales of mobile devices have rocketed and smartphones are the mission control for our lives. They are always on, always with us and changing everything, including how we shop and pay. Many brands and retailers have created apps, but driving regular traffic to the app is another matter.” And that is the big vexation right now: how do you get people to your app, and to keep coming back to your app and spending through your app? The problem lies to a large extent with the apps stores themselves. “It’s important to remember that app stores are walled gardens – and they are currently hugely overcrowded,” says Shuman. “Only the really stand out apps or those with the most marketing budget to push them forward will succeed.” And to part of that stand-out – and indeed part of how any app will make money – is how well it works and whether or not it actually transacts. “Apps are an expensive thing to create, and ecommerce-enabled apps even more so – although apparently only around 18% of retail apps are ecommerce enabled,” continues Shuman. “Surely, you have to question the point of having such a powerful ecommerce tool and making it ‘information only’. I think what this means is that brands need to have a far more critical approach to apps, rather than just thinking they need to jump on a bandwagon and create one just because everyone else seems to have one. They need to really think them through.” Of course getting someone to actually know your app exists is really one of simple marketing. But even that is fraught with difficulty in a world where everyone is bombarded with marketing messages. Apart for geographical or time context, mobile marketing alone is not enough. And even if marketing does get your app downloaded, getting it used – repeatedly and profitably – is just the first very small step. To this end, app development company Grapple has set up a division aimed at helping brands and retailers make their apps and mobile sites make more (Some! Any!) money through applying a range of tools centred around marketing, optimization and CRM. And of course the measurement of how effective mobile is to a retailer across all channels, since in the omni-channel world the journey can start on one channel and end on another and the ‘value’ of each channel therein needs to be assessed and apportioned, believes Grapple. Grapple’s approach takes in three key elements of the consumer usage profile of the app. “We aim to help retailers and brands in three ways,” explains Adam Levene, Chief Strategy Officer, Grapple. “App discovery strategies to help cut through the crowded app market place to maximise downloads through both organic and paid marketing; retention to minimize churn with the implementation of a managed-

CASE STUDY How Premier Inn monetized its app Hotel chain Premier Inn launched its smartphone app in January 2011, but the hotel operator felt it could do more to understand how its customers are using the app and to adjust the apps design and functionality – as well as the company’s business processes – to make it even more effective. That’s when the company called in Grapple. Over the past three years, Grapple has aggregated data from its clients’ 300 branded applications. Branded applications are those which either offer a utility or make the life of the customer easier when he or she is on the move. Grapple has analysed data from 325 smartphone and tablet devices to enable companies such as Premier Inn to better understand customer behaviour to help them improve sales, customer retention and loyalty. Looking at the data, Premier Inn and Grapple found that people usually book a room in the nearest hotel and they tend to mostly reserve one-night bookings. This information was fed back into Premier Inn’s booking application to boost room reservations. The analysis has also shown that usability and design are very important, which can affect how customers transact with the app. And the upshot? Premier Inn’s app has so far seen 2million downloads and generated around £1million in revenues from bookings – much of this driven by using analytics and CRM to drive usage. The app typically sees conversion rates of around 5.9% – pretty high in the competitive travel sector. service mobile CRM programme; and revenue optimisation to help increase revenues through basket optimisation to increase the lifetime value of a customer.” He continues: “Once consumers have the app they are clearly engaged with the brand, but keeping that engagement going needs work,” says Levene. “Then completing the sale becomes crucial – through any channel – once the customer has become loyal.” According to Levene, loyalty is really the key, but getting people to be loyal and reuse an app is very hard to pull off. Already both Premiere Inns and B&Q have started to use Grapple’s services – and its Insight Engine, which gives data on how native apps are used, something you can’t get from apps stores – to try and create loyalty. “The key is to make it easy to use, and give the consumer what they want,” says Levene. In Premiere Inns’ case this means making the app simple and quick and well designed from both an aesthetic point of view and a functionality standpoint, so that users keep coming back to it, rather than instigating a web search. For B&Q it centres more around making some of the parts of using an app in store something that makes the buying and check-out process more simple. However, perhaps the answer lies in ignoring apps altogether. “I’m not saying don’t do apps, but surely most smaller (and some larger) brands would be much better pushing their money into developing their websites to ensure their multi-channel offering is fully supported across the different device platforms than taking flights of fancy down the app route,” suggests Pod1’s Shuman. “The reality is that, although apps may look nice and be seen as a cool way to engage customers, they don’t work for everyone, and unless you have the resources to support them long term they’re likely to become something of a white elephant.” telemedia issue 33

TICKETING

recent Juniper Research report, Mobile Ticketing Strategies: Air, Rail, Metro, Sports & Entertainment 2013-2018, stated that 16 billion transport and events tickets will be delivered annually to mobile handsets by 2018. At present the more traditional players in the market, such as Ticketmaster, still rule the roost, but the smaller, more innovative, companies are holding their own. One such company is Last Second Tickets. It provides distressed inventory to a closed-user group, using database partners, such as Virgin and EE, which gives them access to around 27 million users. The company focuses on mobile and the mobile channel to sell tickets for live music concerts, theatre, and sporting events. Craig Massey, CEO of LST said: “The vast majority of what we do is via mobile, through SMS and push notification to Apps and mobile Apps. Our model is to provide the unseen glue between major corporations and the entertainment industry. “It’s the smaller and nimbler companies that are providing the innovations in the industry. The likes of Ticketmaster have a vested interest in keeping the status quo, by doing fulfillment of paper-based hologram

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tickets. It is utterly pointless in this day and age of technology and mobile. But they do it because this is where the money is. There is a huge chunk of profit to be made on the postage, which the ticketing company shares with the promoter. “Ticketmaster is great at what it does, but a third of tickets remain unsold. We have developed specialist techniques to protect full-price ticket strategies of venues and promoters. If we want to clear unsold tickets, we dedupe everyone who has paid full price and we also only send to small closed user groups, so 1000 SMS or push notification messages to clear 100 tickets, which are hidden in microsites, and offers can only be redeemed through invitation only. We are also completely anti-SEO by putting offers into secret microsites. We send a one-time URL, which is a unique link, for the ticket offer. If someone tries to forward it on to their friends it comes up ‘Page not found’.” Engaging with consumers on their mobile phone can bridge the gap between the digital and the physical worlds in a way that adds value and can be tailored for individual users and different audiences. OpenMarket’s Head of Marketing and Business development, Adrian Sarosi, said: “A company, brand or organisation can use SMS or push notifications to a smartphone app to deliver useful information and special offers to consumers around a live event according to a number of variables – including time of day and location, or demographic data such as age and gender. “For example, a major global entertainment brand uses location-based text message alerts, provided by OpenMarket, in its theme parks in North America to let visitors know which rides and attractions have the shortest queues during the day. The visitors can spend more time enjoying the attractions and less time queuing, which in turn boosts the park’s productivity. It also contributes to visitors enjoying their time at the park more, making them more inclined to return – and hopefully spend more money.” Fatsoma, an online ticketing platform based in Manchester, has cleverly harnessed the power of social

TICKETING media to sell tickets for event promoters, venue owners and festival organisers, and in October it will be launching its mobile offering. Paul Stacey, Co-founder of Fatsoma, said: “Fatsoma is the middle man between the promoter and the customer. We allow people to sell through peer-to-peer network. It is like a micro-affiliate service. We have over 70,000 people selling tickets to friends on Facebook and Twitter, which generates a lot of traffic and these representatives also get a cut.” Stacey has seen a big rise in mobile traffic on Fatsoma over the last year and the company are now focused on that channel. He said: “We have seen a massive increase in mobile traffic within a year. It is now 50:50 between the phone and the desktop. This is because more and more people have a smartphone and the demographic that we aim at is relatively young and thinks nothing about doing absolutely everything on their mobiles. “At present, we offer apps to the customer, the promoter and the representative. The customer can download a barcode for a gig or club night. The promoter, who has downloaded a different app, can then do phone-to-phone scanning to verify the barcode and accept the ticket. “We are taking the service to mobile in October. The way it will work is that one of our representatives will sell a ticket by sending a text message to the customer who can either pay by cash, or the rep can send a link which the customer will open up and enter in his or her credit card details.” Mobile companies involved in ticketing and live events must beware of killing the goose that lays the golden eggs. At present, the true value of the mobile ticketing process is the integration of mobile ticketing platforms with loyalty programmes. Big mobile operators, such as Orange and 02, have made great efforts to own the ticketing space and provide their subscribers with added value. 02 insist its Priority Service gives subscribers the chance to ‘be the first in line to gigs and events’ with the offer of tickets up to 48 hours before general release. Tickets are delivered via SMS, email and Priority Tickets App. Orange Wednesdays, which focuses on providing customers with discounted film tickets, is in its seventh year and has been a great success, achieving its goals of brand awareness and churn reduction. The service is directly connected to all major cinema chains and more than a million tickets are processed monthly by Lumata, a leading software and marketing services company. Adhish Kulkarni, Lumata’s Chief Marketing Officer, said: “Lumata provides specialist loyalty programmes with mobile operators, by triggering real-time based marketing, or close-looped marketing, using push notifications and SMS on the brand side. “In 2004 Orange wanted to build a partnership with

the film industry. They wanted to make a two-for-one offer available for anyone and everyone on the network, giving them the ability to go to any cinema on a Wednesday and watch a film of their choice. “The challenge was to find then the lowest common denominator to get the ticket in the hands of the consumer. It was using SMS and alphanumeric code, which was only valid for the week. It was made so that it would work on any phone. You either text film or call 241. Subsequently, we have opened up an App to request a ticket.” Although not seen as a direct revenue generator, the benefits are there and money will be made.

Using mobile as a channel for ticketing lets brands use customers’ data and opt-in preferences to personalise their messages and offers – increasing the likelihood of revenue opportunities around live events Lumata’s Kulkarni describes the key benefits for Orange is brand affinity and loyalty, which is important, after all it is much cheaper to keep a customer, rather than acquire a new one. “Orange is squarely in the film space. Assuming everything, such as tariff and handset etc, is OK, the consumers that use the services are much less likely to leave the network, because they are getting £40 worth of film and pizza a month [Orange Wednesdays’ only cross-promotion partner is Pizza Express], creating greater loyalty.” Using mobile as a channel for ticketing services enables brands or organisations to use customers’ data and opt-in preferences to personalise their messages and offers to them. This, in turn, increases the likelihood of revenue opportunities around live events. OpenMarket’s Sarosi said: “In the run-up to a concert or sports event, mobile is ideal for reaching consumers with special offers and other updates, such as when tickets go on sale, plus a link to the website to buy them. And at the event itself, mobile can be used to distribute money-off coupons at concession stands and merchandise stalls that are valid for a limited time only.” Stacey agrees that the more information gained on customers the better the service works. He said: “When a customer initially signs up to Fatsoma, they will be asked what bands they like etc. so we can build up a detailed picture of the customer and personalise the service with specific information or offers. The more they use the service, the better their experience. “Once you have bought your ticket it is all about building the excitement for the event, letting the customer know about the other people they know that are going to the event, pushing out VIP upgrades through group-related incentives.” telemedia issue 33

networks

Something in the air Marketing and engagement are changing dramatically, so brands and SPs have to change too. And helping drive that change are new approaches to using network technology – especially wifi. Phil Gault, Director of Strategy, Sponge, explains what it means

f the myriad new dynamics at play within consumer marketing, two seem particularly significant: first, the accelerating shift from traditional broadcast models to one-to-one, often customer-led communications; and second, the collision and convergence of the physical with the digital. Booz & Co has just released a new study that perfectly illustrates the first point. 37% of the marketers surveyed expect their spend on print to decline by at least 5% over the next two years. TV is broadly flat. At the other extreme, fully 96% anticipate increasing their investment in shopper marketing. And top of the pile is Mobile. 100% say they’ll dedicate more funds to the channel, with three quarters of respondents planning increases in excess of 5%. What we are seeing here is a re-focusing away from the top of the ‘funnel’ and towards those moments when people are actively in the mood to buy; what Google calls the Zero Moment of Truth. Of course, retailers still need to invest in attracting new customers and driving footfall. But that is only a means to an end. Ultimately, what matters is how effectively you convert those shoppers into buyers – or, at the very least, engage them sufficiently so that they identify themselves and grant permission for further dialogue. Here’s a tragic case in point. I was talking to a very senior marketer at HMV not long before they went into administration. He shared the frightening statistic that every year 130 million shoppers visited one of their stores… but 100 million of those visits didn’t result in either a sale or an identifiable data trail.

Making your stores work harder HMV may have been an extreme case, but it’s far from unique (especially as the showrooming phe-

telemedia issue 33

nomenon grows). The challenge is clear: how do you extract the maximum possible value from these casual shoppers? This is where Mobile comes into its own. Consider these two datapoints: 63% of mobile searches trigger an action within one hour (source: Nielsen/Google) 65% of shoppers are happy for retailers to send them content on the basis of their location (source: Cisco) This is a potent combination: immediacy of need plus proximity to the point of fulfilment…plus, of course, the fact that smartphones allow retailers to create fully digital experiences that are contextually specific. To capitalise on this, you need two things: the right content to trigger the desired behaviour; and permission to deliver that content via mobile. Which takes us to the main topic.

Using wifi to drive sales & loyalty Let’s start with a definition of what Wi-Fi marketing means: a 100% permission-based solution in which shoppers register for free in-store Wi-Fi in order to benefit both from the service itself and to receive timely, relevant and personalised content. An excellent example would be the Starbucks Digital Network in the States, which encourages dwell-time by providing free, sometimes exclusive content from high-end providers. In terms of turning shoppers into buyers, this ticks four important boxes: First and foremost, it means you can recognise a customer when they enter your store and communicate with them pre-purchase. It allows you to enhance the shopping experience via digital technologies. It creates a bridge between your physical and digital estates, helping drive your omni-channel proposition.

networks

How Wi-Fi could unlock your most valuable audience apply to individual retailers work equally well for geographical communities. The provision of free Wi-Fi in urban centres is a growing trend. O2 has just announced a major deal to cover the 100,000-strong business community of Canary Wharf. Camden has led a group of 17 London councils, brokering a deal whereby registered devices can access free Wi-Fi for 30 minutes a day (and then purchase additional time from a provider of choice). In Northern Ireland, Bangor has just extended the geographical reach of the service it first launched in 2012. And Mansfield is endeavourMaking it happen ing to raise the £38,000 it needs via crowd-funding The technology to do all this exists today; indeed, techniques. we’re about to launch something very similar for a It’s early days, and some of the initial hopes may major multiple. The consumer appetite also exists. To cite just two examples: IPSOS Mori and The Logic prove over-optimistic. Whilst it certainly won’t hurt, I’m not sure that Wi-Fi in isolation will “keep peoGroup have found that 42% of us want to receive ple in town a lot longer instead of rushing home to offers whilst in the act of shopping, not afterwards; check their emails,” as Sarah Nelson of Mansfield whilst Maritz reports that 73% of people are interforecasts. ested in interacting with loyalty programs via their But there are clear and immediate benefits; a prinsmartphone. cipal one being the fact that Wi-Fi offers local busiThere is one key barrier, however: the nature of nesses a highly targeted (and thus affordable) chanthe deals that have been struck between retailers nel for reaching shoppers in the immediate vicinity. and their chosen Wi-Fi provider. Quite clearly, in I expect the next step to be even more exciting many cases the provider has traded up-front revas businesses group together to enues in exchange for long-run commercial benefits – including insight into individuals’ shopping habits make collective offers that drive local residents back and the ability to monetise that via advertising. into town centres. And it needn’t What this means in practice is that many retailjust be about ‘money ers struggle to get access to the real-time data that off’. With a bit of vision, makes Wi-Fi marketing so powerful. there’s a real chance here This is a challenge, but one that will be overcome. The prize is simply too big. As Graham Cove, to create platforms that can Director of Wi-Fi for EE, puts it: “Properly deployed, inform and assist the community, harness its collective energy and Wi-Fi offers a three-way win for the shopper, the retailer and the provider. To drive both sales and loy- re-ignite civic pride. It’s one way in which the Big alty, providers need to allow retailer branding on-site Society could start feeling a bit more tangible and meaningful. and make it as easy as possible for them to access This would also represent a high-value marketuseable customer data.” At a time when both shops and shoppers need all ing opportunity for brands that want to be seen as community hubs or enablers. This could simply be the help they can get, this three-way opportunity ‘proud local businesses’ like Cardinal Security who needs to be seized – and soon. have stepped forward to contribute £20,000 to the Mansfield fund. Or – as it becomes increasingly true How wifi can help that the service is the product is the marketing – it In the future, Wi-Fi’s potential to drive salience and could be that brands like The Co-Op will see this as sales will make it a key weapon in the trench warfare between retailers. But there’s a related area that the ideal way to put themselves at the heart of the communities they serve. also offers massive opportunity. The principles that

It generates valuable new metrics: for instance, frequency and length of visit (Wi-Fi knows both when you enter and leave a store). Here’s a hypothetical example for a fashion retailer: on their first visit, the shopper is encouraged to sign up for free Wi-Fi. A voucher incentivises data accuracy, and drives purchase. A message thanks the shopper when she leaves the store, and the communication is continued at home. Finally, a personalised greeting awaits the customer upon her return.

telemedia issue 33

M2M M2M

From management We now live in the post mobile era: mobile comms is now longer about voice, text and even messaging, but is now about machines talking to you and to each other. And it provides a huge opportunity for service providers. Gordon Rawling, Oracle Communications, takes a look at why it’s important and what brands and businesses want to do with M2M – and why it matters to you

n our lifetime many of us have witnessed at close quarters the rise of the internet and the way it has revolutionised our lives and our businesses. And we have all been instrumental in fostering this rise. We’ve shopped, banked, read newspapers, watched television, downloaded music and had conversations, all online. Our participation has been the engine that has seamlessly threaded the internet into our lives and the language of everyday life. But increasingly our active participation is no longer needed for many of the online transactions and interactions taking place. Machine-tomachine communications (M2M) is accounting for ever more internet traffic and is transforming industries such as automotive, healthcare, insurance, logistics, oil and gas, retail and utilities to name just a few. Machine to machine (M2M) communication is what happens when cars, white goods, shipping containers, security cameras, TVs, industrial machinery, drinks coolers — in fact, nearly any fixed or mobile assets — are connected. Using M2M, these assets can send and receive data and requests to each other and to central management systems, autonomously and often in real time, opening up a whole new world of opportunities for business agility and efficiency.

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A recent report and global study by Vodafone found that 55% of respondents rank M2M as a key priority, and 9% go even further — they rank it as their number one priority. Only 8% rank it as a low priority. Leading the race are the 12% of businesses that have already launched their M2M strategy — the pioneers. While 12% is a relatively small percentage, the big picture shows broad interest in M2M. Already more than four out of five organisations have committed to adopting M2M, and 60% have built their initial strategy. Only 17% haven’t actively evaluated it. And this broad interest is largely unprompted — just 26% of our respondents say they’ve been approached by an M2M supplier directly. So who is doing what with M2M right now? According to Vodafone automotive companies are ahead in M2M adoption with 19% of them pioneering it, compared to just 10% in consumer goods. While each industry has its own profile, the same broad “adoption curve” is followed by each; most organisations being either “fast followers” or “embyronics”. Regionally, AsiaPacific is considerably ahead in adoption plans, with 62% launching by 2015, compared with just 35% in the Americas. But no industry is more integral to driving this trend and securing its future than the telecoms sector. Communication service providers (CSPs) are responsible for managing the increasing volume of traffic on their networks, which is related to M2M, and for finding a way to monetise the trend to ensure it is sustainable. Reach and reliability of the network is key and while it would be easy to dismiss that as a given, M2M is a complex beast – especially in industries such as oil and gas or logistics where sensors may be needed in remote and far flung places. They may also be mobile – for example, cars reporting data for insurance pur-

M2M

to monetisation poses – meaning the networks which underpin effective M2M deployments are often anything but simple and straightforward. Similarly, the around the clock nature of M2M means consistency is crucial. Many of the benefits of M2M are related to real-time communications, whether it is tracking vehicles, or shipping containers or taking readings from smart sensors on oil or water pipelines, or in millions of homes; businesses need live data on their assets and networks in order to derive the greatest value from M2M. That means guaranteed uptime is more crucial than ever, coupled with robust business continuity planning. This means CSPs must move from selling bandwidth to selling consultancy and service levels to establish the right networks for M2M customers. M2M presents far more of an opportunity for CSPs than meeting even heightened expectations around connectivity. Connectivity can still be profitable, despite talk of commoditisation, but greater revenues will be derived from the wider service-oriented opportunities around M2M. One area of focus therefore needs to be addressing the industry-specific applications for M2M and providing customers with dedicated support and services for their industry and their needs, such as building-in back end big data analytics and other data center services, or managing partner relationships to simplify billing and the management overhead for customers. Selecting the right partner for the M2M journey is another key decision that must be made. CSPs should look to partner with service and platform providers with a broad offering across the full M2M ecosystem, from the device to the data centre. This means that components and platforms are better integrated and pre-tested to work optimally together, which would reduce the time and cost to roll out M2M applications. Until M2M standards become mature, and “plug and play” capabilities become common, vendors with a broad offering of pre-tested, pre-integrated capabilities will continue to have an edge over niche players. The value of M2M lies in being able to accurately derive value from the data in a timely manner. That means simply getting the data quickly is not enough. CSPs can either implement analytics and business intelligence on their infrastructure for M2M customers or they can watch as M2M customers seek those services elsewhere, reducing CSPs once again to mere connectivity partners while increasing the complexity for customers. Given the sensitive nature of M2M data – and some consumer scepticism of automation – it will also be crucial that the CSP is taking a lead on designing security into the networks and processes at the heart of

M2M. There are opportunities aplenty but CSPs must start to capitalise upon them now. The CSP’s ability to work with its customers to design networks which fulfil the business need, through to delivering the integration of software on the network and in the data centres required to process M2M information will position the CSP as a far more strategic partner for the future. That is naturally a more profitable place to be as the margins on services, such as consultancy are typically higher than those on hardware and infrastructure, due to the sizeable capital expenditure related to infrastructure and the aforementioned commodity issues around pricing. If CSPs get this right, M2M – the next major phase of the evolution of the internet – could be the one which pulls them right back to the heart of their customers’ business.

The business case for M2M

So why would anyone look at M2M technology for their business? According to a study carried out by Vodafone there is a broad spread of reasons why, but typically they focus around traditional core business goals such as reducing costs, increasing productivity and beating the competition. The main reactive force behind M2M adoption is regulation. For example, in the energy and utilities sector, regulators are demanding providers roll out smart metering solutions to better control rising energy costs. Similarly, in regions such as the EU, the European Commission wants car manufacturers to enable their vehicles to automatically call the emergency services in the event of an accident — a perfect M2M use case. Since Vodafone’s sample represents businesses across a range of industries and geographies, it is little surprise that only 12% of respondents actually voted for regulation as their main driver for M2M adoption. But for those industries where legislation does apply, it clearly can’t be ignored. Plans are all very well — but how do they translate into reality? 94% of businesses see some return from M2M, with 36% seeing significant return. Transport and logistics and energy and utilities see the best results; automotive by far the least. Smaller organisations tended to see better results, perhaps reflecting the time it takes for M2M to become embedded in business processes. This level of ROI may be seen as good or bad depending on the individual organisation. Vodafone saw a wide spread or ROI expectations in our qualitative interviews. For example, one respondent said: “Right now we’ve targeted very modest: 7-8% revenue generator once we roll the solution out completely.” While another said: “Usually we try to get a full return on investments within 24 months. We’re a little aggressive but it’s a goal.” Steve Hilton, Senior Analyst at Analysis Mason agrees and adds: “It’s difficult for enterprises to fully comprehend the value of the data they will receive from M2M connected devices. M2M is such a shift in the way we value the objects in our life. M2M can literally give voice to every nonhuman object. And even better, that voice is translated into a language we can understand using data aggregation and analytics. It’s a completely radical concept and it doesn’t surprise me that the costsavings benefits are eclipsed byvother more powerful benefits post-launch.” telemedia issue 33

adult

Jumping through

new hoops

ack when mobile was ‘new fangled’ there was a huge hoo-hah about the regulation of content – especially adult – and, if memory serves, ICSTIS (as the regulator was then known) spent a lot of time arguing the toss that it should regulate it. Instead, the Mobile Operator Code of Practice was drawn up and mobile adult (that’s anything over 18) essentially sat behind a very simple, effective opt in for users. But with the UK government declaring war on pornography – more one thinks to garner votes than to actually tackle anything – this is all set to change. As of the 2 September, The British Board of Film Classification (BBFC) has taken over from the Independent Mobile Classification Board (IMCB) in providing the independent framework that underpins the Mobile

Operators’ code of practice. The move has will see the introduction and implementation on to mobile content of the classification framework used by BBFC to rate movies. The Classification Framework enables mobile operators to restrict access to their commercial content that is unsuitable for customers under the age of 18. The Framework is applied to commercial content such as: video and audio/video material; or mobile games. The framework is also used by the mobile operators to calibrate the internet filters that parents can use to restrict content accessible by children via a mobile operator’s internet access service. In theory this sounds simple, but it throws up two very clear problems. Firstly, it’s one thing to apply these rules to new content, but how on earth will it be applied to the millions of clips already out there? Secondly, much like the UK government’s plan to censor the internet, there is a real risk that not only will adult content in its purest sense be stuck behind age verification and classification rules, but also most mid-shelf and sexual health related content. The first problem is not only a logistical one (though watching every adult clip out there and rating it is a dream job for some intern!), but also a problem that there is the very real risk that we end up with a two tier system where new content is rated and old content isn’t, or a more draconian one where everything is overly censored just to be on the safe side. The second problem leads to one that makes access to helpful things harder – or impossible – removes access to information that may actually help the vulnerable young people it seeks to protect. Both issues make making money from adult services hard to do and could scupper many businesses. However, there is a growing school of though that the solution may lie in paywalls. Stick it all behind a paywall, a la The Sun newspaper, and use that as the barrier, the AV process and perhaps even reverse the growing trend for free content killing the adult industry. But, in the age of the smartphone, access to content on mobile isn’t just about what is served up over 2, 3 and soon 4G, but also web content via wifi. This is where the issue collides head on with government plans to make all access on the web something policed by the ISPs and forcing consumers to opt in. Here then we face an odd paradigm shift, as many presenters in the corporate world like to say. Two sets of regulations about content accessed on the same device by the same people, all of whom will have to jump through several hoops with each regulator to access content they want. Surely this can’t be workable? telemedia issue 33

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telemedia issue 33

PEOPLE Maguire becomes interim MD at AIME Rory Maguire, formerly head of payment services at Three has been appointed as interim managing director of AIME, as long standing Toby Padgham stands aside to pursue other interests. Maguire is pledging to start to lay the foundations of a new three year strategy for the trade association while the hunt for a full time MD is carried out by the board. Within this plan, Maguire is planning to help AIME increase membership as, he says, “this is the only way to fund its activities and return value. Maguire also believes that AIME needs to drive a training programme for members and their customers that keeps them away from regulatory scrutiny and it needs to extend reach into alternative micropayments, apps communities, publishers and other forms of interactive media supply and AIME needs to get better at publicizing it’s achievements and keeping members informed of its good work. Commenting on his appointment, Maguire said: “I have taken the reigns from Toby (although he still holds onto one or two and will remain on the board) at what feels like a very busy time for AIME and its members. Potential issues exist with the European Payment Service Directive under review; further delays to unbundling continuing to impact the introduction of higher rated fixed line services; UK implementation of European consumer protection rights eliminating hidden costs potentially impacts telecoms businesses providing 08 ranges; and continued issues with rogue affiliates dominate the mobile space.” Toby Padgham will be working for himself, Enarpee and AIME.

has taken up the post of Director of Sales at Telecom2 in London’s Docklands. Duncalf has been working in IT and telecoms for more than 20 years. In his new role he will be exploring and providing strategic solutions to call centres, TV, radio, print, and online media, sports organisations, financial institutions and payment providers on a global scale.   Thurner publishes tome on m-commerce and m-marketing Rob Thurner has published his book on m-commerce and m-marketing “Winning with Mobile: Creating a strategy for Mobile Marketing, Mobile Commerce and Mobile CRM”. You can find it on Amazon. Thurner will be talking about his book – and running some of the sessions – at World Telemedia Amsterdam.

MEF appoints strategic advisors in Africa, India and the Middle East MEF has appointed Prins Mhlanga and Saleem Mobhani as Strategic Advisors as MEF continues its expansion with a particular emphasis on the Growth Markets including the Middle East, India and Africa. Former Vodacom Managing Executive for Digital at Vodacom, Mhlanga will support MEF’s Africa office which was established in 2012 in association with Vodacom with a pan-regional mission in Sub-Saharan Africa. Mobhani, former VP for Digital Marketing and Entertainment at carrier Du is appointed to support strategic growth and initiatives in the Middle East and India. MEF’s Middle East Office was established in 2010, co-founded with ooredoo. Mhlanga and Mobhani’s wideranging mobile expertise in markets across the Middle East, India and Africa will strengthen MEF’s regional strategy and roadmap for accelerating mobile content and commerce and ensure the Rattan moves from EE sustainability of the global mobile to Three to head up ecosystem. payments They join incumbent MEF Following the departure of Rory Strategic Advisors Ingrid Silver, Maguire from the post of head Partner at Dentons, Gerrit Jan of payment services at Three UK, Konijnenberg, SVP at Vodafone, and Sharan Rattan is leaving EE to Roy Vella, Managing Director at Vella take up the had of payments post Ventures. at Three. Mhlanga and Mobhani’s Currently Rattan is Sales & appointments underpin MEF’s Marketing Manager - Mobile expanded focus as reflected by Payments New Business at EE. recent joiners including, Consumer She will be taking up her new role Trust advocates Evidon and TRUSTe, later this month. Etisalat and Mobile Technology Tomorrow (MT2) from the Middle Duncalf heads up East, Twist Mobile in India and Telecom2’s sales banking and finance business AMEX Tim Duncalf has left Oxygen8 and and education giants Pearson.

telemedia issue 33

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

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