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Mobile advertising hasn’t yet met its true potential. Despite the best efforts of brand managers, advertising agencies, search engines, social networks and a host of ad-tech startups, it simply isn’t fulfilling its potential. In 2012, mobile accounted for only 2.4% of total ad spending, according to EMarketer, and is expected to reach an 11% share only by 2016.
The challenge for mobile advertisers is to win over subscribers, but it’s just not happening fast enough. Just 9% of consumers indicated they have a very/somewhat favorable attitude towards mobile advertising, well below the 49% favorable rating for TV or 22% for online display, according to a Milward-Brown AdReaction report released last November.
Hit-or-miss mobile advertising
Part of the problem is engaging with consumers on a smaller screen, and all the complexities of designing effective ads with the specific requirements of different mobile devices. In addition, the smaller screen limits the number of ads that can be viewed at one time, increasing the importance of each ad being spot on. Without the benefit of user profiles, irrelevant ads are delivered that can annoy and alienate consumers.
Operator in the middle
Mobile operators can play a critical role in making mobile advertising more effective.
First, they have access to aggregated data about a subscriber’s Web and application usage, location and other real-time metrics which can be used to increase the effectiveness of advertising, while keeping subscribers’ privacy secure. This information is a combination of subscriber profiles collected as part of their billing systems, and mobile data analytics regarding users’ intent and interests that is collected at the core network. Operators can trade relevant, anonymous information with advertisers and content providers and provide real-time indications regarding the most appropriate ad or content to present to subscribers. If properly leveraged, this can become a gold mine for advertisers and mobile operators.
Second, operators also have control over security and privacy of the subscriber, which is very important to the end user who may agree to opt in to relevant advertising. The use of customers’ personal data requires their approval, not just for legal reasons but also to avoid offending customers who might view targeted ads as intrusive. Having a central location accessible to all advertisers gives the operator the role as gatekeeper, ensuring subscriber satisfaction by filtering out irrelevant ads, which can be a valuable service for consumers.
Third, and most importantly, operators have the commercial relationships with subscribers which enable them to give bonuses, and other rewards for disclosure of their interests and other data that can lead to better targeting. This can be the key for bringing back trust and, by bringing consumers into the dialogue, improving the targeting and relevance of mobile ads.
Operator sponsored mobile ads
There are several operators who have already committed to taking a central role in advancing mobile advertising. Last December, Verizon Wireless launched a service where user information, including location, Web browsing and mobile app usage data, is used in order to serve appropriate ads with incentives and the ability to control privacy choices.
In addition, Deutsche Telekom is launching SpecialOffers as a “mobile advertising-on-demand” service, for customers who supply demographic and lifestyle characteristics about themselves to receive ads tailored to their preferences, interests and needs. Customers who register are entered into a competition to win prizes, mobile handsets, tablets and more.
However, in order for operators to utilize their access to their data, several different systems need to be integrated and analytics need to be applied to enable advertisers to target each segment. Some of the Internet proxy systems placed in the core network that are used to speed up mobile browsing can also analyze traffic and provide the breakdown on browsing behavior to improve targeting. This type of analysis enables ad networks to aim before they shoot, saving time and money, while improving ad effectiveness and the user experience.
Once the data is packaged in a way that is easy for ad networks to use, a mobile advertising system can be put in place with the subscriber in the center. By enabling consumers to define their preferences, or having their approval to share their personal data, trust can be maintained to build customer loyalty and improve the effectiveness of mobile advertising. Bridging the gap between subscribers and advertisers, operators can close the loop and make mobile advertising an effective and trusted way to reach potential customers.
