Mobile Advertising One Of Most Featured Topics

Mobile advertising was one of the most consistently featured topics in the media this year and looks set to stay top of the agenda well into 2008. Mike Beech, VP management for intelligent charging at Acision, looks at how its future success lies in the hands of the payments industry.

Everyone in modern life expects a fair deal. Society demands this, and there are not many willing to accept second best in any service for which they part with their hard earned cash. But what happens when consumers are no longer simply paying money for a service, and are in fact giving their time instead? This is essentially what mobile advertising does, and in doing so it completely changes our expectations and experiences of a mobile service.

With the launch of Blyk in the UK, where subscribers sign up to receive 217 free texts and 43 cross-network minutes per month in exchange for up to 6 advertising messages a day, there is already an emerging subscriber base whose custom is built entirely on the basis that in return for their time they will be rewarded. This may sound simple, but without the proper backend systems to support this model mobile operators risk alienating their subscriber base.

The science of mobile advertising

Mobile advertising is the most eye-catching proposition today for revenue hungry operators and brands. For many years now, advertising budgets have been shifting from traditional marketing media like television and radio to more direct ‘below the line' forms of marketing, such as email and the internet. Mobile advertising is promising to provide the next stage in this development by offering even higher advertising effectiveness and impact.

As the most personal and direct communications channel to a consumer, and with over 100% penetration levels in many mature markets, the mobile boasts some of the best advertising inventory available. Each time a customer receives a message, downloads a piece of content or navigates to a mobile internet page, a piece of inventory is created. It is when the customer is engaging with the mobile device like this that the opportunity to present an advertisement exists, offering personalised, targeted material.

So the argument for why mobile advertising will succeed is clear, dependent on several factors of course. Operators must ensure all advertising is opt-in, that messages are relevant and targeted to individual users, and most importantly that customers get what they are expecting in return for receiving advertising. The latter poses a real challenge for operators, and this is where the mobile payments industry has a part to play.

Ensuring a fair deal

While it is clear that mobile operators stand to gain substantial revenue uplift if they are able to monetise their unique assets in the area of mobile advertising, these additional forms of revenue will only be achieved if they are preceded by investments in the end-to-end business chain.

For the payments industry, it is crucial that the appropriate systems are in place to ensure that customers get what they have signed up to. If a subscriber is expecting 100 minutes a month and only gets 85, they will quickly become disillusioned with the service and simply take their business elsewhere. Operators must also make certain that customers are not overly rewarded for receiving advertising, equivalent to more traditional revenue leakage problems with mobile content.

Operators must invest in creating a reliable business chain fulfilling the requirements of the advertising community as well as the operators as channel owners and gatekeepers. Perhaps the most important part of this business chain as far as payments goes, operators must invest in specific mobile advertising enablers, traditional BSS functions like CRM, rating and billing.

As more operators roll-out out mobile advertising services, clever payments systems will be required to accommodate the different ways in which subscribers are rewarded for receiving advertising. Not everyone will follow the Blyk model, some operators will offer discounts, bundles or even promotions in return for advertising. Payments systems must support the full integration of systems to encourage, promote and reward subscriber usage.

While 2007 focused on the question, “Will it work?”, in 2008, we will be asking, “How will it work?” Robust and adaptable payments and charging systems will ensure fair distribution of advertising rewards back to the end-user, ensuring customer buy-in to mobile advertising, helping to reduce churn and ultimately increasing the mobile operators' revenues.