Mobile Metamorphosis, Ad(vert) Nauseam?

Chinwag's Mobile Metamorphosis event last night was dominated by the Topic du Jour, Mobile Advertising. Not surprisingly, as Blyk were on the panel (Blyk being the startup that plans to launch an all advertising funded service in the UK later this year).

Speaking were:

Hugh Griffith - O2 Group Strategy
Jessica Sandin - Senior Consultant and Head of Mobile Practice, Fathom Partners
Jonathan MacDonald - Sales Director, Blyk
Russell Buckley - Managing Director, AdMob Europe

The speakers were asked a number of questions by Tim Green - Executive Editor, Mobile Entertainment Magazine.

This being Planet Mobile, the hype floweth over, but there were some quite interesting things that came out during the evening about the interplay between Brands, Agencies and Mobile Ad Players.

For example, it seems no one is quite sure what Advertisers want, including the Advertisers - the emerging story seemed to be that some Advertisers want to know who is doing what to a minute level of detail, others are not yet very sophisticated in dealing with the levels of granularity interactive advertising can give. Exacerbating that is the problem that its not yet clear what some of these emerging metrics actually mean in practice, as it is all so new. What was a common theme was that Advertisers were increasingly interested in the ROI of their investments, and increasingly expect metrics to give them greater clarity.

They clearly want to know which half of their Adspend is working.....

There also seems to be some - evolution? - in what the role of the Agencies and other Service Providers will be going forward. There is clearly a tension between the "creative, experiential" side and the "give me the details" side of the industry - my take is that the metric side is gaining sway judging by some of the comments during and after the session, including an impassioned plea from one of the audience for more experiential thinking from the brands, and less focus on data.

On to the Operators - the positions of O2 and Blyk were well defended by their speakers, but in essence the O2 story is the classic Telco game of delaying the inevitable price decline, the Blyk game is the equally classic "noisy disruptive new entrant" story.

(I think I heard Huw say that in 2007 most operators will be offering lower cost flat pricing...my ears went into shock at that point)

Blyk's basic argument is that they will start collecting very detailed user data from the get go, and use this to finely segment their customer propositions. Credit card companies have been doing this for years of course, but Blyk's view is that traditional operator's systems will not easily be able to do this level of analysis as their systems are not built to do that. (Someone gave the example of an operator not being able to tell which ringtones were selling best)

Huw's response was that despite all the New Metrics for the New Media, Advertisers stick with CPM rates because that is what they understand. Jessica noted that both Operators and Advertisers are fairly conservative.

Quite how Adspend will work is unclear - as Russell pointed out, the entire UK Ad industry is roughly the size of the 4 mobile players, so it's a tall belief that all its spend will move to subsidize mobile. (The entire Internet Adslice is about 10%, so if all of that came onto mobile its 30p off your £3 ringtone - will that move and shake you?)

Despite this, no-one doubts that Ad supported services of some form will emerge (apparently everyone at 3GSM has transformed into an Ad support platform - much like at IBC last year, where everyone is now an IPTV support platform). Jessica noted that the Mobile Mantra that "people will pay for mobility" was true only until free services became available.

In general the Mobile Ad world is copying ad models from the Internet world (and some Radio/TV for moving media) but that it is still unclear what really works in mobile. Many early assumptions about how and where people even consume media are turning out wrong - apparently most mobile video is watched in bed or while watching TV with someone else! Blyk noted that they had to do a huge amount of testing of ad relevance, frequency, type of message to find the "sweet spot" - and that sweet spot differs per person.

But all this doubt hasn't stopped volumes going up. Admob noted that they had served 30 million ads for their first 6 months of operation, and now in their third 6 month period they would be serving c 2 bn.

There did seem to be a general consensus that behavioural data is far more accurate than demographic data for ad serving, though there was concern about having the type of Ad inventory available to serve all these different sweet spots. Not only that, but as a new medium the type of Ad will change - "hot or not" and very blatant "X% Off" Ads seem to do well.

There was a discussion re spam, fraud et al - view was that as yet Mobile Ads had not experienced fraud - not sure I believe that, as James Cooper of Spectrum noted, many now promoting mobile ads were the same people who tried to break the subscription model in earlier times, and "ripoff" was a word not unconnected with some of these plays.

Two Big Question were left unanswered, so as a public service I asked them

1. What about the deals with Google and Yahoo? To my surprise, everyone on the panel was very blase, feeling that the Operators had the measure of the GYM club here. Touchingly naive imho.

2. Would Ad supported mobile media be half the issue if data charges weren't so high? Huw naturally defended the Operator position, but I think this is an issue the Operators do need to think about if they cannot match the newcomers in terms of serving "sweet spot" ads. In Fixed Telcoland the way MCI outbilled AT&T via the first "Friends and Family" is Required Reading>

All in all very educational, and being Planet Mobile, there were some great Soundbites - for your delectation we offer:

- "Users is not the same as Usage" - Jessica

- "We need to find the Social Athletes" - Jon, Blyk

- "Mobile Advertising today is like Websites were in 1996" Russell (Admob)

- "Mobile is the about the Age of Engagement" - Huw