Advertising migrates to mobile

On this blog, Tomi and I have described the migration from Interruption to Engagement.

We have shown, that via economics, culture, society and technology.

So it came as no surprise to me today to read in the Economist the following

Advertising on mobile phones is a tiny business. Last year spending on mobile ads was $871m worldwide according to Informa Telecoms & Media, a research firm, compared with $24 billion spent on internet advertising and $450 billion spent on all advertising. But marketing wizards are beginning to talk about it with the sort of hyperbole they normally reserve for products they are paid to sell. It is destined, some say, to supplant not only internet advertising, the latest fad, but also television, radio, print and billboards, the four traditional pillars of the business.

But lets have some context first in our post Thinking about the idiot box we quoted Jim Stengel CMO for Proctor & Gamble. Stengel said

In 1965, 80 per cent of adults in the US could be reached with three 60 second TV spots. In 2002, it required 117 prime time commercials to produce the same result. In the early 1960s, typical day-after recall scores for 60 second prime time TV commercials were about 40 per cent and nearly half of this was elicited without any memory aid. Currently a typical day-after recall score for a 30 second spot is about 18- 20 per cent and virtually no one is able to provide any form of playback without some form of recall stimulate.

The number of brands and messages competing for consumer attention has exploded, and consumers have changed dramatically. They show an increasing lack of tolerance for marketing that is irrelevant to their lives, or that is completely unsolicited. Traditional marketing methods are diluted by a hurried lifestyle, overwhelmed by technology, and often deliberately ignored.

How about this, that in the UK google makes more profit than broadcasters ITV, Channel 4 and Channel 5 put together. ITV lost £50m in advertising revenue in 2005 and broadcaster Channel 4 predict they will go into the red for the first time in 20 years. 5 leading media groups including ITV have seen their share price drop between –9 to –30 percentage points since January 2006.

We are witnesses and we are the midwives to a new world, a new way of doing things, a new way of creating media, communications and commerce. As, the author Alan Mitchell once wrote, “if traditional marketing were a thing in its own right would anyone want to buy it?” The answer to that 99% of the time is No

So where does that taking advertising $$$, well lets consider that there are 3 times as many mobile phones in the world than there are TV sets. Out with our calculators. :-)

The Economist article points to the rise in mobile advertising spend

At the moment, most mobile advertising takes the form of text messages. But telecoms firms are also beginning to deliver ads to handsets alongside video clips, web pages, and music and game downloads, through mobiles that are nifty enough to permit such things. Informa forecasts that annual expenditure will reach $11.4 billion by 2011. Other analysts predict the market will be as big as $20 billion by then.

What is also equally important is that mobile is the 7th Mass Media, and is designed to be a 2 way+ communication device. At this point not only is advertising money beginning to redirect itself from traditional media, but it will also start to redefine itself, because the technology platform allows this to happen.

Advertising migrates from Interruption to Engagement or what is described in the Economist as Relevance. But its more than relevance it about being timely, relevant and contextual. Its abut Just in Time vs. Just in Case communications. This is the new media and business ecology of the 4C's: Commerce, Culture, Community and Connectivity. Our theory which we describe in Communities Dominate Brands.

Smart always outperfoms dumb.

And of course Blyk is part of this new world of relevant, timely and contextual communications. Its where the content is the advertising and the advertsing is the content, its where the conversation is the advertising and the advertising is the conversation. The potential for value creation is massively enhanced.

In September Blyk, a new mobile operator, launched a service in Britain that aims to do just that. It offers subscribers 217 free text messages and 43 free minutes of voice calls per month as long as they agree to receive six advertisements by text message every day. To sign up for the service, customers must fill out a questionnaire about their hobbies and habits. So advertisers can target their messages very precisely. “Britain is the largest, but also the trickiest European ad market, so if it works here it will work everywhere,” says Pekka Ala-Pietila, chief executive and one of the founders of Blyk.

We blogged about Blyk in BB & AB: Before Blyk and After Blyk and Blyk, Blyk Blyk, what makes it tick? Answer me quick, is it really that slick?

Of course that means a different mindset. A different Paradigm. Interruptive communications was always premised on the deal that you get to watch free content in exchange for watching, reading, viewing, scanning, ignoring commercial messaging. And the Economist points to the dangers of marketers thinking... oh great, now I can just do the same thing as I have always done, interrupt but on mobile something that is far more personal. But this is simply not the case, and is not the means to realise such a great opportunity.

This is the great mistake that many people/companies make and are making. So these lessons will be learn't, what works and what does not.

The one area however that the Economist article did not touch on and is an area of important commercial significance, is the ability, to create highly detailed and accurate community maps that chart the interactions that people have with each other. This is called Community Marketing Intelligence And this can be monestised.

Community Marketing Intelligence is the method of extrapolating valuable information from social network interactions and large data flows that can enable companies for example; to launch new products and services into the market place at greater speed and at significantly lower cost. This is a very new area of research. But for example Swisscom achieved a 90% uptake in sales after trialing a launch of a new product into the market place using Alpha User scoring.

It has been described as the Black Gold of the 21st Century

Its not the strongest or most intelligent that survive but those most adaptive to change.

we say Engage or Die

Comments

[Graham Hill]

Tomi

Another great post.

I am not particularly interested in having ads pushed to either of my two mobile phones. I have nothing against advertising, in fact, I am a strong supporter of businesses being able to advertise freely, just not in my face. And that's the problem. The history of advertising strongly suggests that that is exactly what will happen. Mobile telcos will rent access to my mobile phone to the highest bidding advertiser to push whatever they want to sell in my face. Don't be fooled into thinking that the ads will be relevant; the mobile telcos and their advertisers don't know anywhere enough about me, my buying behaviour and the situation I find myself in at that particular moment in time, to have a hope of knowing what is relevant to me. The existing tragedy of the advertising commons will rapidly expand to become the tragedy of the mobile advertising commmons.

What would make me change my mind? The only thing would be giving me complete control over what ads I am sent and a reward for provided access to my mobile phone, irrespective of whether I looked at an ad and clicked through or not. This could be done centrally by the mobile telco through an ad serving business rules engine that I could use to dynamically control the rules that decide what ads I would accept. Rewards could be deducted from my monthly invoice. Ultimately, this could be done with ad managing software installed on my mobile phone that I could use to control the ad serving rules directly.

The idea that the customer should control their own marketing destiny is taken up further by two blogs: Doc Searls' ProjectVRM blog (http://blogs.law.harvard.edu/vrm/) at the Berkman Center for Internet and Society at Harvard University and Alan Mitchell's Right Side Up blog (http://www.rightsideup.blogs.com/) at the Buyer Centric Commerce Forum.

Graham Hill
Independent CRM Consultant
Interim CRM Manager

[Graham Hill]

Tomi, I mean Alan. Oops, Sorry.