Permission Based is not enough: Understanding mobile advertising

The interest in mobile advertising is growing around the world. I just spotted news on CNN that USA based youth MVNO, Boost Mobile, will introduce advertising. They are not alone. Google keeps saying "mobile mobile mobile" and have been quite open about their new Android operating system, that this will also enable advertising. Nokia has its Ad Service platform. Various operators have announced initiatives for ads, in Japan mobile operator giant NTT DoCoMo has joined with the country's largest ad agency Dentsu for their joint venture D2, the world's largest mobile advertising company by revenues with both domestic rivals having similar schemes; South Korea's SK Telecom has its Aircross etc. There are the. independent providers like Admob, serving two billion mobile ads monthly; ad-based free telecoms provider Blyk already in the UK and launching in the Netherlands; and various service providers innovating in the mobile ad space such as Flirtomatic's First Face auctions and Japan's Otetsudai Networks doing classified ads etc.

It is clear that there is very much interest and development around mobile advertising now. So the very first basic rule is - all mobile advertising has to be permission based. Has to be. Absolutely definitely always on every network and on every service. Permission based. Explicit clear permission from the user. It cannot be unsolicited spam and interruption; the digital equivalent of the junk mail we hate receiving at home in our snailmail. All mobile advertising has to be permission based.

But permission-based is not enough!

It will have to be better than just permission based. Now is the time for you, our reader, to really make a difference, and push your company to understand this distinction. Mobile advertising is going to be the primary engagement marketing platform - because all seven mass media do have advertising (print, recordings, cinema, radio, TV, internet and mobile) but doing interactive campaigns on the first five legacy media is cumbersome. Doing interactive campaigns on the new digital interactive media - on the internet and on mobile - is technically easy. It makes advertising on these two newest media far better than ads can hope to be on the legacy media.

TARGETING

On magazines, newspapers, radio, TV etc, the only way to "customize" an ad, is to target it by the media channel. What age is the viewership or readership or listenership. Consider the programme of the radio channel or TV station - if the show is a youth show - rap music on radio or the Top of the Pops style pop music chart show on TV - then its likely the audience is mostly the youth, and that is where you advertise Adidas shoes or Red Bull drinks etc. A most imprecise method, of very poor targeting accuracy. The ads are still mass audience vehicles. And they are interruptive in nature. Very poor value for both the audience and the advertiser.

Now on interactive media we are learning about interactive marketing campaigns. They can be designed purely for that media - say like Adwords on Google on the internet - or they can be done in conjunction with an old media and a new media - like voting on TV shows through the mobile phone SMS text messaging function. This is not permission based, this is still interruption. It is a less intrusive form of interruption, but it is still interruption.

On mobile - the 7th mass media - we have the only mass media platform which is truly personal, is permanently carried, is always on, has a built-in payment system, is available at the point of creative inspiration, and accurately measures its audience. Only on mobile, can we deliver what Alan Moore calls "Mass Niche Audiences". Targetted audiences within a mass media. The same content can get radically different targeting. I am 48 years old, but I love rap music (yes, thats weird I know). So if I visit my old home town of New York City and listen to my fave rap music radio stations, I love the music, but the ads are meaningless. I am not a teenaged black new york kid who would understand their fashions and passions and interests. Yes, I admire P Diddy but I don't wear his cologne or his Bad Boy label t-shirts etc. Now. I am a professional consultant, my work outfits are all high class suits, Armanis, Hugo Bosses, Canalis etc. So - only through mobile, using mass-niche targeting, I can be given rap music content, with "48 year old male adult professoinal consultant" type of clothing advertising - in my case suits and ties from Armani, Canali, Boss..  This is not possible on radio, on TV, in print, in the cinema.

SUFFICIENTLY CONTAGEOUS

But we have to go beyond. Just having permission based ads is not enough. Mobile is the only personal mass media. We will be offended by any unsolicited ads. First, we have to give permission prior to receiving the ads, but secondly, we have to like the ads. The CEO of Fjord, Mike Beeston, has the test for this - make it sufficiently contageous. Only those ads, which are sufficiently contageous, may be released onto the mobile channel. Sufficiently contageous. That sounds interesting. What does it mean?

It means that for the intended target audience, the ad is perceived so valuable, so cool, so nice, so useful, so funny, so entertaining, so good - that the initial target audience likes it - yes - and furthermore the intended target audience feels compelled to forward the ad to at least one further person. Not everybody on the phonebook's list (that would be "absolutely contageous"), but at least one other person. Obviously the other vital part for any mobile ad to be sufficiently contageous, is that it has a viral element - such as the ability to forward that content, or forward an invitation, or forward a link or forward a coupon or whatever. That is what is called sufficiently contageous. Now. When I say, Permission Based is Not Enough - if it is both permission based, AND sufficiently contageous - then it is good enough for mobile advertising.

Again - on any legacy media, such a campaign would be killed in the focus group. A tiny fraction of the measured audience loved it, the vast majority hated it. If you design an ad that appeals to me - say around Formula One - if I love it, so will my brother. But my sister will hate it (she hates F1). My mother will hate it. Even here, Alan Moore my co-author is not much of an F1 fan, he likes rugby. So Alan would be indifferent to the ad. This is what I mean, for the intended target audience it must hit the passion button so hard that we say "I love it" !

GENUINE

This is the power of mass niche targeting. Rather than one bland ad, with one super-priced celebrity, endorsing our product on a lame script, we do targeted ads, and engagement campaigns. Notice that Generation C (the Community Generation, the youth and young adults today living in social networking sites, sending SMS text messages into the night, participating in reality TV shows, etc, the new consumer of today) will reject anything they suspect as being not genuine. Classic interruptive ad models are all 100% fake. Not genuine at all. There is nothing honest and truthful about them. We need honestly targeted and customized campaigns. Mass-niche audiences.

USER-GENERATED ADS

Then we get to user-generated ads. Like Blyk now is innovating. Like Alan says, you embrace what you create. So if we get our target audience to co-create the advertising experience with our brand, then they will embrace it, and they will promote it.

All of advertising will be different. Do not take the failing concepts of interruption from junk mail, print ads, radio spots, TV ads, cinema ads, banners and spam on the internet - and replicate those onto mobile. That will fail.

Rather, start with permission based. Never do any ads without permission on mobile. But don't stop there. Ensure that the ads are sufficiently contageous. And beyond that, try to make the ads "engagement marketing" where the target audience becomes actively involved in the advertising and marketing campaign in some way. User-generated ads are one way, not the only way by any means.

TOMI YOU ARE LIVING IN A FANTASY WORLD

Am I living in a fantasy world? In Japan today, 44% of Japanese mobile phone owners click on the links on their ads - that means these Japanese are not avoiding the ads. 44% of Japanese mobile phone owners like their mobile ads so much that they actually do click on the links !  We talk about many campaigns and services here on the Communities Dominate Blog about how that can work. In America there was the mobile marketing campaign by West Coast Customs, a car-customizing ("pimping") service that drew a 39% response rate. In South Korea - together with Japan the most advanced mobile advertising market - Aircross reports campaign response rates on mobile as high as 98% !!!!  as they had with Gillette in 2007. Blyk was talking in Barcelona and reporting average campaign response rates in the 30%-40% range across their whole inventory and user base.

These are astronomical response rates compared to spam on the web (and in another galaxy compared to junk mail). We've reported here that the first measurements of the efficiency of mobile campaigns already show dramatic yields above those on the web, and far far better than the five legacy media channels.

Yes it can be done. It is by NOT copying interruptive ad models, but learning what is new and compelling about mobile, and creating new ads and models for that new 7th Mass Media world. Our friend BJ Yang, the CEO of Aircross in Korea says that the "mobile is the personal fun playground". A personal, fun, playground. Don't release anything onto it which is not fun!

Lets not now kill this goose that lays the golden eggs. We are on the verge of the golden age of advertising (especially user-generated advertising). On mobile it is not enough that ads are permission based. Of course, all mobile ads have to be permission based, but they need to be even better than that. They need to be sufficiently contageous. They need to be engagement. They need to bring concrete value to the recepient. Only they can a marketing campaign transform from being perceived as an advertisement, to becoming content. This is what I have been asking all advertising professionals to do whenever I run workshops for them - lets re-invent advertising. On mobile, lets make advertising transform itself to become content (to its intended target audience). When our target audiences like our ads so much, they want MORE of it, then we have succeeded. That is what we can do in mobile, and only in mobile.

UPDATE - I wrote a follow up piece to this story on April 3, entitled Mobile Advertising Evolving.

PS - I just noticed that the comments section for this entry was "closed" - I didn't mean to do that. So, as always, we welcome comments also to this entry. It was just an accident in my posting of this entry. Comments are always welcome.

PS 2 - I've just released my latest Thought Piece, this about mobile advertising. If you would like a free copy of this two page document (like a condensed and intense White Paper) loaded with examples and stats, send me an email to   tomi at tomiahonen dot com  and I'll send the Thought Piece by return email.

Comments

[simon cavill]

Tomi,
Perhaps the 8th Mass Media is payment....

If the operator sets up a stored value wallet linked to a payment card they issue with the owners permission and encourage by incentive to use it, then they can track purchases across multiple media, using the stored value account for mobile purchases and the card for most other things. Its global, works in the "real" retail world and web and mobile.

The Power of Payments...

Simon

[Giff Gfroerer, i2SMS]

Tomi,

Absolutely targeted is the way to go. Blyk's success is for this exact reason. The user knows they are getting free services by accepting advertising. Therefore, they click on the ads. But they are clicking on the ads, past what is required of them to honor their contract, because the ads are relevant! These ads have to do with what interests them. That is the key. In reading one Blyk customer's daily experiences, he actually enjoys receiving the ads and reading/watching them because they are, once again, relevant.

The more permission based it gets, the more relevant it gets, and the closer to hitting one's passions it gets, the higher the response rate.

[Greg Grimer]

They killed e-mail with Spam, I suspect they'll kill the mobile platform too. Safeguards are not in place to stop it and even my mobile company T-mobile sends me all sorts of stuff I don't want like surveys to complete. Overcharge me for calls and then ask me to complete a survey? Do they think I have nothing better to do?
If your own mobile network can't resist spamming you then there is probably no hope of an opt-in panacea where only hyper-relevant and engaging ads land on our mobile. We will come to hate our mobile Inbox just as we hate our Outlook Inbox.

[Tomi Ahonen]

Hi Simon, Giff and Greg

Thank you for the comments

Simon - good idea, payments as the next mass media. I think this is still very much a concept, as today most payment methods do not lend themselves to being media channels - when I pay with a credit card or transfer money from a bank account to another, or make a withdrawal from a cash machine, these are not very conducive yet as mass media, but they could be. I think the mobile phone as a media (7th mass media) is very well suited to explore the money side, to help bring added value to our transactions, in a way that a typical credit card alone cannot do (because the mobile has a screen, keypad, is permanently connected etc).

So for example we can get our current balance before we authorize a payment on the phone; or see the price of that item when we are travelling, converted to our home currency, that kind of stuff. So before payments themselves can become the 8th media, we will probably see mobile the 7th utilize its money dimension (built in payment mechanism) to an advantage to build new and radical converged financial instruments. Lets monitor this space. I'm sure you Simon will also let us know as your company Mi-Pay will explore such opportunities.

Giff - I totally agree (obviously) and yes, its a kind of virtuous cycle, the more the user becomes involved with the brand, the more the brand can become relevant to the user. Then the user is rewarded and has an incentive to be even more involved with the brand, which in turn gets ever better "through-put" on its ever-more targetted campaigns. Classic win-win.

Greg - I hear you. You probably are based in the USA, unfortunately the backwaters for mobile telecoms. We can see a better future already emerging in advanced parts of Asia and Europe, so hold on, perhaps all is not lost. For example in Japan when mobile messaging spam was getting out of hand, the three operators lobbied the regulator, to allow a change in Japanese telecoms rules, to help them weed out the spammers. This is the kind of attitude that operators need to take to not kill this goose that lays golden eggs (mobile messaging and mobile advertising)

But you are totally right, that if the operators are too greedy about this, or don't take a customer-focused approach, it will end up all bad for all of us. Just don't give up hope yet, Greg, the American carriers are evolving too (even though it seems like an eternity) and they are paying attention to what is working in the rest of the world. All is not lost...

Thank you for writing

Tomi Ahonen :-)

[Kosta Goultas]

I think we have to go much further then the permission based principal and go into the world of 1 on 1 consumer controlled communication between consumer and brand.

This way the consumer is served at its best with information he actualy requested for .This results in higher marketing efficiency wich creates a possebility for a reasonable discount throug a mobile coupon on the requested offer .

Everybody wins

Connect this with the existing location based possebilities and you've found the holy grale

[Tomi Ahonen]

Hi Kosta

Thanks for the comment. Yes, I agree partially, we certainly need the permission and if the users get involved, the ad experience (or marketing experience) can become far better.

I do not see the automatic link to the benefits of location-based possibilities. I wrote about LBS (Location Based Services) quite passionately in my first two books and it was a major topic at the world's first mobile advertising conference that I chaired in early 2001 in London. But we are seven years later. Now when I talk about mobile advertising, I find seven unique benefits for mobile phones that cannot be replicated on the legacy media - and I don't even MENTION location. I think location is totally a red herring. The real powers come from things such as the personal nature of mobile (as you mentioned already) and that the phone is permanently carried, and it is always-on; etc. And the audience measurement accuracies etc. But location? No. I really don't see it. I think we will hate most location-based ads - not all of it - but so much of it that this will be a most minor, nearly irrelevant part of the total mobile advertising opportunity.

I do not know this for a fact, Kosta, obviously, and time will tell. But since I've really followed this emerging opportunity from its very beginning, and have written about LBS ads extensively, and discussed it with LBS experts from Finland to Japan to America - I am totally convinced that this is not the big opportunity. We have far far better methods to satisfy customers, consider User-Generated Ads (Blyk) for example.

Thank you for writing

Tomi Ahonen :-)

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[Kostas Goultas]

Hello Tomi,

I thought i had replied but something must have gone wrong (here).
Pittey is that i had written an extensive answer .....

Maybe i can motivate my vision in person. I still have a working demo version in Holland but due to circumstances i am still eager to roll out this beatyfull working concept.

please feel free to contact me for a phone call and maybe a meeting.

best regards, Kostas Goultas ( [email protected])