How to get ahead in mobile advertising – Oren Glanz, CEO of Olista

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For operators looking for new revenue streams, mobile advertising looks like a sure fire winner. The numbers certainly stack up: for example, a report by Strategy Analytics claimed mobile advertising revenues would reach $14.4bn by 2011. Another report issued in 2007 by Airwide confirmed that brands, the budget holders, are keying into mobile advertising in a reassuringly big way.

The report highlighted the fact that the number of brands planning SMS and MMS mobile marketing/advertising had doubled to 28% in a year, since a similar survey had been carried out in 2006. The report also claimed that many brands had plans to increase the proportion of the budget allocated to mobile advertising campaigns.

Such favourable statistics (of which those given in this article are only a small example) and the optimism that prevails in both industries, makes it very easy to be blinded by a glowing impression of a market sector in which there is real money to be made. As subscriber numbers grow and new data service introduced, the cost of high quality content will increase, causing problems with existing (flat) data plans. For those who want to be competitive, Mobile advertising could be the enabler.

It’s a tantalising prospect for mobile operators and advertising agencies alike, two industries that are keenly aware of the need to find fresh revenue sources. While the interest and the budget is obviously there, its early days and there’s a lot that can go wrong. All it takes is a run of bad experiences, a couple of high profile mobile advertising campaigns to fail, for the bubble to burst.

As with any emerging industry sector, there is a real danger that operators and advertisers alike will become overly enthused by the combination of technical possibilities and freshly minted revenues. An appropriate note of caution was sounded in an influential report issued by Analysys in which the research firm counselled operators against ‘flooding’ mobile phones with unwanted and irrelevant advertising that would ‘destroy consumer confidence and with it the potential value of the mobile advertising market’.

I agree. I am convinced that the manner in which mobile operators, and to be fair, the advertising industry respond at this make-or-break point in the development of this potentially lucrative sector will dictate the future of mobile advertising.

It is clear that brands, and the agencies that represent them, see mobile advertising playing a specific role within a broader strategy. They see the mobile phone as offering a degree of direct, immediate contact with customers that goes beyond anything they can achieve with any other medium. Given the almost emotional attachment many people have to their mobiles, advertisers realise that the mobile phone can bring them as close as they’ll ever get to having a real relationship with customers.

A relationship with mobile phone users – that’s what advertisers want for their money. And who better to help them build that relationship than mobile operators who are the people with a direct insight into mobile phone users’ behaviours, likes and dislike. Mobile operators unquestionably have a unique perspective on the online lives of mobile phone users, so who better to ask for guidance?

The reality is, of course, that many operators don’t have the adequate technology nor do they have the processes in place to provide advertisers with anything like the insights that are expected and, in fact, are essential. Operators need a strategy that enables them to understand how consumers adopt and use new services.

Service Adoption Management (SAM) gives mobile operators an almost forensic insight into the mobile phone users’ experience, pinpointing precisely what, when and how they access the web and other value added services (VAS). It is also invaluable in aggregating groups of mobile phone users according to criteria based on actual behaviours and buying patterns.

Let’s