It was refreshing to hear an advertising executive (other than Jonathan MacDonald and, more recently, WPP’s Mark Linder) provide reasons why the individual(!) sits at the center of a newly- emerging (and ever-evolving) mobile advertising value web. But now we have proof that what many suggest is idealism, can actually provide the basis for an ideal business model.

The news is today’s announcement by Reebok that it has launched Your Reebok, the world’s first iPhone app that allows us to customize our sneakers (an app created by Inside Mobile). Your Reebok launches initially in the U.S. and the U.K. but the service will go live in Germany, France, Belgium, Holland, Austria, and Ireland in the coming months. But the real news for me is the sea change in mobile advertising/marketing thinking this made-for-mobile app represents. I caught up with Dusan Hamlin, Inside Mobile Managing Director, to talk about what the app does now, and what we can expect next.

At first glance, the cool factor is how this app uses the features and functionality of the iPhone, such as the accelerometer, to take mobile interaction to another level. In addition to being able to customize up to 23 areas of the show with a choice of 19 colors, people can also shake the iPhone to mix and meld colors in truly one-of-a-kind random designs.

Do you like what you see? Then share it with a friend. But this time we’re not talking about just another app that lets us show stuff to people in a one-way (one-to-several broadcast) exchange. Dusan made a conscious choice to enable mobile community collaboration. “You share the sneaker with friends and say ‘what do you think?’ They edit it [your design], make some changes and send it back, saying ‘it was cool before, but I like it more now.’” (Yes, another example that plays in favor of the much larger – and I would argue – inevitable trend to co-creation. I am immediately reminded of the work of Eric von Hippel, Professor and Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management. Democratizing Innovation, his must-read business book published in 2005, strikes a new chord when we apply it to mobile.

Beyond collaboration, the app lets us tag our design, add it to a Google map, and view all the other tagged designs worldwide.

Location awareness is an element in the service, and plays a significant role in the service roadmap, but Dusan’s plans are light years ahead of the stale location-based advertising approaches I hear at conferences and industry get-togethers. Dusan has developed a strategy that turns location into a core element of a much larger (and vastly more exciting) personal creativity app. Location-based inspiration is the buzzword here. In a future version of the app, the service will suggest ideas/motifs to people (to help them customize their sneakers) based around their location and time of day. “If it’s 2am and you’re in London, the app will show you designs that fit with nightclubs, clubbing, and the mood of that moment.” Likewise, switching the app on when you’re on a beach in the middle of the afternoon might deliver designs based around muted natural colors, cloud shapes, and holiday fun.

But Reebok doesn’t only boost brand awareness. It offers people a chance to buy the shoes they customize. For the moment, that’s the only aspect of the service that is online (as opposed to mobile). In practical terms, people (when they have completed customizing their sneakers) have to click on an option to email the design to their PC, where they can complete the transaction. (No bill-shock here. The app tells you – as you design the sneaker and choose from materials such as suede and leather to complete the look – exactly how much the shoe will cost. The fully customized shoes range from GBP80 to GBP110, depending on the shoe, materials, and optional extras.)

Moving forward (and no doubt after successful negotiations with Apple – amazing how they have become a gatekeeper in mobile apps and commerce!),  a future version will let people buy the shoes using their mobile phone and credit card. It will be interesting to see what cut Apple takes for the transaction…

My take: Communication, creativity, collaboration, and commerce. Impressive! Connect the dots, as Dusan and I did, and it’s all about making long tail marketing possible. All the more effective since the process from end-to-end involves us, turning us into proud creators, brand ambassadors, and new recruits in the army of fanatics that brands like Reebok need to succeed. (Once again borrowing a disruptive concept from my favorite source: Jonathan MacDonald…)

So, does the Reebok app cover the bases to make the jump from social activity to social community? Yes, but Dusan is more interested in enabling a community than building one. “That part of the API will be open. So if people want to build a community around a design, or create a kind of work group to develop a design, it’s up to them. No one is in control here.” (And no one should be.)

My take: Inside Mobile’s goal was to create a new kind of brand sponsorship model and encourage empowered people to spend more time (on their terms) with the brand using their mobile phones. In my view, the company has succeeded on all counts.

He turned the question around and showed in his presentation that the money is where it always was: With people we are best advised to stop treating as consumers. (You can view Jonathan’s slide deck along with a few others here, thanks to Jan Rezab from HungryMobile.)

So, how do we get our share of the money out there? Jonathan suggests companies position themselves closer to people and respect their requirement  (particularly in the mobile space) for conversation – both with the brand and with their peers. In a nutshell: “Abandon control of communications and realize that advocacy is more powerful than you. Provide facilities and utilities for people to talk with each other and listen [to what they say].

The next step is about creating and co-creating experiences, products, and services that people value. Get that right and the way is clear to pursue a strategy that will ensure you get your share of the money. I won’t give it all away here (and perhaps you’ll have to attend Jonathan’s upcoming mobile advertising workshop), but let’s just say a big part of it is “creating things that are open, customizable, extensible, and share-able.”

Before you dismiss this as a warm-and-fuzzy approach, I recommend you read The Future of Competition: Co-Creating Unique Value with Customers, a must-read business book co-authored by C. K. Prahalad that has had a profound impact on my work. In this recent interview he further outlines how the role of the consumer (the individual!) has changed. “Traditionally, companies create products based on their market research and exchange that for a value. But it has changed now, with customers equally involved in solving the problem. Co-creation is not customization, but it is personalized.”

Prahalad doesn’t specifically address mobile – an extremely personal device central to our lives – but it’s easy to make a logical leap and conclude that people are likely to be  more demanding of a say in personalizing a personal experience like receiving personalized content/advertising on a personal device.

My point: Mobile is personal and mobile advertising (actually all communications from all companies) will have to at least offer people a say in their experiences. If they choose to be passive “consumers” then we have to let them make that choice themselves (as opposed to us making it for them).

This brings me to the presentation from Mark Linder, Global Client Leader at WPP, a global advertising and communications agency. Mark focused on the other “big question” in the industry: What will have to happen for mobile advertising to really take off? He gave us a choice: 1) Mobile advertising will have to prove its effectiveness to the advertiser, and utility to the consumer or 2) Mobile advertising will have to prove its emotionality as an experience.

Which do YOU choose?

Before you decide, allow me to recount the powerful argument from Mark that convinced us of the merits of an approach aimed at achieving the latter.

First, advertising used to be unilateral, but mobile – a two-way communications device – changes all the rules. As Mark put it: “Advertising is no longer written by somebody else for everybody else.”

Indeed, people are empowered and connected, and advertisers are well advised to take a multilateral view of people and how they relate. (The importance of understanding the social graph cannot be overstated, one reason why I have scheduled a podcast in the next weeks with Jouko Ahvenainen, co-founder of Xtract, a company that excels in developing software products for social marketing and advertising intelligence.)

Mark also drew some interesting comparisons between cultures to show that we are motivated by passion. Advertising – at its most basic level – is also about passion. It’s about making us want an object/service so badly, we will buy it over any other in its class. Why do we choose a particular brand over another? Mark pointed us to a key quote from cultural anthropologist Dr. Robert Deutsch. Brand is “actually a primal and primary mechanism of the mind. It is attachment, a merging between a person’s ’self story’ and a person’s story of you, the product, the company.” Based on this, Mark concludes people get attached to brands like they do dogs, cats, cars and even other people.

If advertising is about attachment, then it’s clear that passion has a role to play.

Apple “gets” it. It has created shiny objects and a complete store of goodies that people are passionate about.

Connect the dots, and we’re back to Mark’s initial question: What will have to happen for mobile to take off?

It just could be that we have to say goodbye to marketing 101 (where the goal is a sale) and embrace (mobile) marketing 2.0, where the aim of advertising is to excite our emotions with an emotive experience. As Mark summed it up: “Mobile should not be afraid of being intoxicated by passion.”

My take: As I have written in my series of mobile advertising white papers, and repeated in the Netsize Guide 2009, mobile is indeed different. The mobile phone, a personal device we have at all times, is not just an interface to content (digital and physical) around us; it is also an expression of our digital persona. Want to interact with me? Then you’ll have to get past my phone, where I screen and decide what content I will interact with and on what terms that interaction will take place. Push is being replaced by pull because people can choose. Advertisers won’t get far if they treat mobile as just another screen, and insist on using it to deliver a one-to-many pitch rather than encourage a balanced exchange that respects our personal space and excites our individual passions.

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Another presentation that (at least for me) was a wake-up call came from Gunnar Selleg, CEO of Aspiro, a provider of mobile entertainment and mobile marketing solutions in the Nordic countries.

(By way of background, Aspiro is also the event sponsor. Mart Kikas. Aspiro, Area Manager Baltics, CEE, CIS, told me that the conference was initially organized to bring together companies from up and down the value chain. My impression: Kudos to Mart for achieving his goal and coordinating an event that exceeded my expectations. I will certainly attend again. If you want to connect with professionals and practitioners from companies across the value web (emerging), I recommend you join me. Mart and I also discussed ways MSG could become more closely aligned with this premiere event moving forward, so watch this space!)

Gunnar walked us through the waves of transformation that have impacted the mobile space. These included a decrease in content downloads (a development observed in the progressive Nordic markets and which could affect markets elsewhere), a shift in billing mechanisms, and the impact of new devices, features, and functionalities on the content we want and how we access it. (You can view the slide deck here.)

Based on these observations, Gunnar identified the six trends highest on his radar:

• Music, TV/Video, and games will to a large degree become streaming based

• Download will become a minor part of total consumption

• Business models will be subscription, pay per download, pay per view/time/whatever

• Ads will never be the main source for financing mobile services, except services that are ad financed on the Internet

• Browser based services will be more common than clients

• IP billing and credit card billing will beat CPA

Let’s take a moment to digest these…

The one that made many stop and think is the prediction that ads will never be the main source of funding for services (except those we know and pay for from the Internet). What will work? Gunnar told me advertising will be about product placement in the actual content.

But keep in mind this is not – and can never be – a hard-sell. Players in a multi-player game may accept ad placement, but they will likely reject advertising that interrupts their gameplay. Get it right and the viral marketing that follows (when players pass the ads around) will be well worth the effort.

Finally, who are the winners in this new mobile world?

Gunnar is convinced content owners will have the top-notch spot.

What do YOU think?