M O B I L E
A D V E R T I S I N G
EXPERT OPINION:
Personalisation essential to unlocking mobile advertising profits According to a recent Amdocs Interactive Study and Report The heightened interest in more relevant advertising and the raft of recent consumer surveys — revealing people would appreciate (and hence be willing to accept) mobile advertising aligned with their preferences – combine to underline the pivotal importance of personalisation. The excitement in mobile may be relatively new, but players in the online space are well aware of the business benefits personalisation delivers. In the online space personalised recommendations (similar to the Amazon model) – once a source of competitive advantage – are in fact becoming table stakes. The real edge is in strategies that personalise the whole experience, from advertising to purchase.
The contributing authors are Matt Anderson, Head of Product Marketing, Amdocs Interactive (top) and Peggy Anne Salz, Chief Analyst, MSearchGroove
The opportunity Advertisers increasingly view mobile as a viable channel. It gives them access to more eyeballs – there are over 5 billion mobile subscriptions globally as of Q3 2010. It offers an opportunity for advertisers to engage with consumers more frequently and intimately, as handsets are a highly personal medium that consumers carry with them wherever they go. The ability to harness subscriber intelligence and locate consumers’ whereabouts also offers a potential goldmine for targeted advertising. On the flip side, mobile advertising platforms are still relatively immature and lack the metrics that advertisers have come to expect from the online world. Furthermore, it’s uncertain how consumers will accept advertising within this highly personalised medium, and consumer privacy laws will require subscriber opt-in for accessing subscriber intelligence and location for targeting. So, what is mobile advertising and what does it mean to operators from our perspective?
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Mobile offers a number of channels for advertisers – messaging, on/off-portal banners, sponsored search, video, in-game and apps and idle screen. Messaging is by far the largest channel today, capturing over 80% of revenues. The primary business models are similar to the web. Cost per thousand impressions (CPM) are in the low single digits for advertising networks to as much as US$20 to $40 for operators and branded publishers – on average CPM is sub $20. Cost per click (CPC) ranges from $0.10 to $0.50 in the US. So how big is the market potential? According to PricewaterhouseCoopers, global wired and mobile advertising spend is forecast to grow from approximately $59 billion in 2009 to $87 billion in 2013. Gartner forecasts global mobile advertising revenues to grow from $532 million in 2009 to $13.5 billion in 2013 – that could mean that mobile would account for approximately 16% of total internet ad spend in 2013. Growth will be driven initially by ads on mobile websites, but search and map services and downloadable applications will also become strong contributors. And the proliferation of smartphones and affordable data plans are key
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Mobile advertising is a channel through which marketers can advertise via mobile operators’ portals and messaging networks, and off-portal
sites. It offers mobile operators an opportunity to generate new revenue streams from two primary ways. First, it allows them to capitalise on the growing mobile advertising market by selling ad inventory on their portals and delivering ads via their messaging networks. Second, it enables them to sell more premium content and apps on their storefronts and capitalise on off-portal commerce by enabling personalised ads, recommendations and searches.
to growth as well. Gartner predicts that Asia will lead, primarily because people use their mobile phone to access the internet, North America will be second due to its high propensity to promote advertising, followed fairly closely by Western Europe, and more distantly by the rest of world. Amdocs mobile advertising and relevance report People want what they want – and they want marketers to get to the point. It’s even more important not to waste our time when we are on our mobile phones. Mobile advertising should therefore be closely aligned with our preferences. This is where permission-based marketing (asking people straight out if they want to receive advertising and interact with marketers) has obvious advantages. However, personalisation technologies can also significantly increase the relevance of mobile advertising. This is the key takeaway of a recent report from Amdocs Interactive based on an analysis of over 200,000 users over a four month period. Amdocs Interactive, part of Amdocs, Inc. and focused on the value added services market, has developed a suite of solutions in areas such as content recommendation, mobile search and mobile advertising. Sitting at the core of this platform is a profiling and personalisation engine that is capable of capturing subscriber intelligence by automatically monitoring the implicit behaviour of how users use and navigate the mobile web. The solution has been deployed by more than 50 mobile operators around the world. The personalisation engine leverages subscriber intelligence to develop a comprehensive model of a user’s interests and those of other like-minded people (known as UCP – User Community Profile). This model is also harnessed by the Amdocs Interactive Ad Personaliser, a solution that combines the learned preferences of mobile users to identify, select and deliver more relevant advertising. By looking at individual profiles, and profiles of like-minded people, the Ad Personaliser builds up an Ad Signature. In simple terms this signature is what users (UCPs) find interesting about a specific ad and which characteristics drive users to click on a given ad. Because the system learns in real time, it can change the ads shown to people on the fly. It can also pick up on important clues regarding what people like/dislike to determine which audience is right for the message.
Better than demographic targeting The Amdocs Interactive study compared the user response to Ad Personaliser Ads (ads shown because they match the UCP) and ads targeted according to ordinary demographics (age group, for example). The findings: Ad Personaliser targeted adverts were, on average, almost twice as effective as the other adverts. Average % improvement relative to benchmark per targeting strategy 120%
“Successful Mobile advertising needs relevance”
Floor Shows Click Rate of Non-Targeted Ads
100% 80% 60%
5x
40% 20% 0% CRM: Top 3 CRM: Top 2 Locations Ages
CRM: Top Age
CRM: Signature
UCP: Signature
CRM: +UCP Signature
A study of Relevance in Mobile Advertising
The bottom line: targeting according to demographics does not significantly improve user click-through. In fact, ads that matched the UCP Ad Signature achieved five times the improvement in click-through. Our take on mobile advertising The growth potential for mobile advertising is significant. Advertisers are accepting mobile as a viable channel. Mobile operators can capitalise on the opportunity by selling ad inventory on their portals and delivering ads through their messaging networks – as well as realise more premium content revenues by directing consumers to relevant content on and off-portal.
“Gartner predicts that Asia will lead, primarily because people use their mobile phone to access the internet.”
People have come to expect (demand) that their interactions with marketers are efficient and convenient. This trend is driving companies to revamp their online approaches to deliver consumers relevant advertising and retail experiences. On mobile – the fiercely personal device we take with us everywhere – the requirement for relevancy is even greater. Marketers can glean a lot from user demographics. However, personalisation and solutions such as Ad Personaliser go a huge step further. They pave the way for marketers / mobile operators to be potentially more effective by arming them with the analytics and insights to determine (even predict) what audience is right for a marketing message. VANILLAPLUS DECEMBER/JANUARY 2011
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