In brief:

After months of researching my chapter contribution to an upcoming book on marketing to Digital Natives, it’s increasingly clear that mobile advertising companies – and their view of “consumers” needs — must evolve.

Mobile is a fiercely personal device and people – particularly empowered Digital Natives – want content and advertising on their terms. (I purposely mix content and advertising here because they are becoming one and the same thing.)

Another shift in the marketplace: our requirement to have a say in the content/advertising we are willing to receive. This came through loud and clear in the research/interviews I conducted for Mobile Advertising Research U.K. 2009 project, a research project endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA) to expertly document the state of the mobile advertising industry in the U.K.

Among the findings (based on 1,000+ consumer online responses and 20+ interviews with operators, enablers, agencies, and brands): only 32 percent of the 1,000+ consumers surveyed had a positive attitude toward receiving advertising messages on their mobile phone. However, that number rose to 64 percent, provided people were properly “incentivized,” and 70 percent if they were incentivized and “in control” of their mobile advertising experience.

Connect the dots, as an increasing number of mobile advertising companies and ecosystem companies have begun to do, and it’s clear that the capability to provide permission-based mobile advertising (with an easy opt-in/opt-out option) could become table stakes.

MOBILE PIONEERS

Companies such as BuzzCity’s myGamma and gofresh’s itsmy.com, mobile social networks turned mobile social ad networks, need little convincing. They made the strategic decision in 2007-08 to allow their verified members to choose the channel of advertising they would accept. Of course, this wasn’t just out of respect for the individual member. Opt-in also allows advertisers to better target their key demographic (example: sports enthusiasts with sports ads) and ensure members who receive a marketing message actually listen.

In my own mobile advertising road test/white paper (PDF) on behalf road test on behalf of Bango, a provider of mobile analytics solutions and MSG supporter, showed that this was indeed a plus for my own campaigns. In fact, I gave BuzzCity the highest marks overall because its opt-in allowed me to deliver effective mobile advertising. (Happy coincidence — I have an interview with BuzzCity CEO KF Lai next week and gofresh’s Vince Staybl has also just reached out to me from his NY trip to offer me a pre-briefing on some significant news, so watch this space.)

JUMPTAP CONSUMER INTELLIGENCE

Jumptap, a provider of mobile advertising solutions that also operates a major mobile ad network, aims to tackle these shortcomings. The company announced this week that is will implement a new feature in mid-year (translated: by end-June) that “enables mobile consumers to manage their own profiles for a more personalized brand experience.”

The focus is on permission-based advertising and on putting the consumer (individual) at the center of their advertising experience. In a nutshell, the feature will enable visitors to participating websites in Jumptap’s ad network to chose the mobile advertising content that interest them – and the choice to opt-out of the process altogether. (Specifically, all publishers in the network will be able to participate. Participating publishers will need to include a link to Jumptap’s profile manager.)

What’s the user experience?

People can choose from a variety of some 29 advertising content categories, including automotive, careers, chat & email, entertainment, finance, fitness, food & drink and games, as the slide below illustrates.

What’s at work (and how) in the background? And how does Jumptap avoid potentially presenting the same people with the same ads?

JumpTap operates a premium mobile advertising network with a penetration of approx. 50 million unique visits a month in the U.S. alone.

Predictably, Jumptap’s IP, which includes patented technology, mobile search algorithms and proprietary know-how around targeting and relevancy (which I have analyzed in this post), plays a huge role in delivering people mobile advertising they will likely find relevant and useful. The company counts unique visitors based on “distinct IDs we get from carriers, cookies, request headers and device IDs.” This can vary across network. “In instances where we don’t have a unique ID, we estimate the number of unique visitors based on page views/unique user that we see elsewhere in the network.”

INTERVIEW WITH PARAN JOHAR

Armed with this background I caught up with Jumptap CMO to learn still more about the nuts & bolts of this ambitious solution and what is says about the company’s wider mobile advertising strategy.

Q: Jumptap is one of a growing group of companies sharply focused on putting the consumer at the center of the mobile advertising ecosystem? Why is this important and what do you offer people?

A: What we’re now seeing is a new wave of mobile advertising right, with the focus on customer intelligence and really putting the customer at the forefront of the mobile advertising ecosystem. Many companies got lost and focused on other constituents: operators, publishers and advertisers. They are all important people, but we are putting the customer at the forefront of the mobile advertising ecosystem, and the way we’re doing that is allowing them to manage their own profiles in a really simple format. This also drives the relevancy of ads.

The concept of is revolutionary but because everyone else has been trying to satisfy other constituents. By driving customer intelligence you’re going to see a higher engagement rate. If you see a higher engagement rate, you’re going to see advertisers who are getting better ROI. If they’re getting a better ROI, you’re going to be able to charge them more. If you can charge them more, by default, you get a better publishing yield so you’re really taking care of all these other constituents by focusing on your core audience, which is the customer, and driving the customer intelligence.

Q: Other companies have a similar approach. And just last week Alcatel-Lucent broke on the scene with a mobile advertising solution that is the subject of a larger report I am currently writing. In it I argue that permission-based advertising is a good fit with messaging because you build a conversation that – in turn – can improve the customer data. But your focus is display….

A: Yes, it’s only about display and it’s not about behavioural targeting. What this is about is empowering consumers to choose their category of interest. That’s one component of the data that will drive the delivery of relevant advertising. It goes into the user profile. And then there might be a component related to context, a component related to carrier data, a component related to publishers’ data – or a keyword from a search. All these are components and the ultimate goal is to drive consumer relevancy through this focus on consumer intelligence– and the better we can understand our mobile ad network, the better we can serve relevant ads to consumers.

Throughout this process three things are critical. One is full-transparency. Two is respecting their privacy and making sure all this data is completely anonymous. And third is preference. We’re allowing them to tell advertisers ‘these are my categories of preference.’

Q: What’s the roll out and what are plans beyond the iPhone?

A: That’s a great question. We’re rolling this out at the end of Q2, and you’re going to get a link to a Beta site where you can go in on your iPhone – or any device – and just scroll through and change categories of interest to suit you. It’s incredibly simple. The idea was to keep it as simple as possible.

Q: It it’s for all handsets from the get-go?

A: It is for all handsets and all advertisers. It’s on iPhone and on mobile Internet, so it’s going to be limited at first. But, as it rolls out, it’s going to obviously develop [momentum]. The goal is ultimately to drive more relevant advertising to everyone on all handsets.

Q: I mentioned that other companies have placed some form of permission-based advertising at the core of what they do. Take BuzzCity. BuzzCity even surveys its members and shares this anonymized information with advertisers to help them target their audience. From an initial look at Jumptap is different because it offers the data to third-party publishers. This would perhaps be the differentiating factor. At the other end of the spectrum there is Alcatel-Lucent’s Optism solution, [a solution that harnesses permission-based advertising – specifically, text messaging – to improve targeting.] So, there are other flavors out there…

A: No one else is doing this the way we are. It is absolutely one of our key differentiators. We also have 80 percent of the carrier business in the U.S. AT&T works with two sales partners, right? One is Jumptap and the other is Yahoo. Needless to say, we’re in good company.

We also have the broadest IP portfolio of any mobile ad network. And we have our pay-per-lick performance marketplace that allows users to bid at a keyword level, category, handset or carrier. We’re the only ones who have all of that.

You bring up the mobile social networks such as BuzzCity. I think it’s a little bit different within a social media construct. That is one component that can be added to the user profile, certainly. But remember we are not taking a siloed approach. It’s not just contextual, not just consumer category information, not just behavioural, not just carrier information. It is all of these components aggregated across multiple forms of data to drive relevancy. That’s our consumer intelligence.

Q: Another part of this might be that you are a neutral network. You belong to a group of ad networks – including the likes of Millennial Media and inMobi – that is not in the Google or Apple camp…

A: I think that’s a great way to break out the marketplace now and there are three groups, so to speak. There’s a lot coming from Apple that I agree with — and there’s a lot that I don’t. On the one hand, Steve Jobs came out publicly and said that mobile advertising sucks and that he has this goal of driving relevancy right to his network. That’s something we applaud. It’s very much in line with our strategy of customer intelligence, so that I think is dead-on.

The piece I don’t think is dead-on is his approach. He’s almost creating a walled garden for himself, almost an AOL of the mobile Internet. Advertisers really don’t care where their ad runs. They care about reaching their audience, not the device. iPhone happens to be the sexy thing right now, but Android will be the next sexy thing – and it [Android] is already is starting to catch a lot of that limelight.

Imagine you were a TV buyer and you had to buy a 30 second TV spot and you had to be cognisant of whether your audience is watching television on a Samsung, Sony or Pioneer TV set. And then you had to worry about whether they were watching it over cable, satellite or a dish network. And then you had to customize your creative accordingly. And so on. It doesn’t make for an efficient marketplace and that’s where I think Apple is missing the boat a little bit. They’re becoming a walled garden in advertising, which I think is not good for the mobile advertising ecosystem in the long term.

Q: Finally, where is the excitement?

A: We’re doing a lot in rich media. Our Unified Rich Media Platform [which I detail further down] delivers the industry’s broadest set of rich media units – for both mobile Web and in apps – all from one network. And our rich media platform is completely open. So, if you’re a rich media buyer for you plug right into our system. We work with iPhone, Android, Palm, and Blackberry. We’re an open system and we help advertisers reach their target audience.

***

MY TAKE: Permission-based advertising sits at the core of a variety of approaches and solutions I analyze in my upcoming report for GigaOM PRO, a project that has evolved from a SWOT analysis of mobile advertising solutions (including Alcatel-Lucent’s Optism and JumpTap’s solution powered by “consumer intelligence”) into a wider discussion of the business value of permission-based (opt-in).

We have ample evidence that permission-based messaging delivers positive results and response rates. A messaging approach also allows brands and other companies in the ecosystem to build on this personal profiling data (with the individual’s permission) by adding questions to refine the profile. This way, an individual who has signed up for car ads (a broad topic) might divulge that they are more into Audi than BMW and even say why they prefer one over the other. All voluntary information an advertiser would no doubt value.

Display is a different. It’s more one-way than two-way, and there is a danger of “spamming” people with repeat advertising because there aren’t enough ads in a category – or because the ad networks can’t identify unique users (and therefore gauge whether an individual user has seen the same ad already, or not). Jumptap claims to have addressed the latter with its IP, technology and techniques that allow the ad network to identify 50 million uniques per month in the U.S. alone.

This week’s announcement builds on that foundation. The focus is to increase the value and relevancy of mobile display ads. (Thus, Jumptap does not compete with companies that focus on mobile messaging and direct marketing.) To achieve this Jumptap inputs the advertising categories chosen by the individual into a much larger, more sophisticated equation that includes data from carriers, searches and some context. This covers the bases to provide people a better user experience (provided there is a good supply of ads in each category), and that should certainly lead to high advertiser ROI and publisher yields. Of course, the proof is in the numbers. We’ll have to wait a while for those. In the meantime, Jumptap’s move can be read as an important confirmation that all advertising – not just messaging – is correctly evolving to provide people more of a say in what they get.

Disclaimer: Bango is an MSG supporter with a branded thought leadership presence on this website; Jumptap has been an MSG supporter and sponsored a series of podcasts.

While Yahoo comes to the party more or less six months later than rivals such as Google, there is some indication that the wait was worth it if we consider that this service extends beyond allowing people to conduct keyword searches (for flight numbers, locations, Web site names, local restaurants – the works). People using the app can also use voice to customize the ‘My Interests’ tab. The procedure (according to the press release): “Simply click on ‘add anything’, speak the topic you’re interested in, then select the relevant content and add it to your page.” The Yahoo! oneSearch with voice application is currently available on more than 80 different devices and across platforms including Blackberry, Nokia, Windows Mobile, and now the iPhone – with support in eight languages.

Various bloggers have tried out the voice app, which harnesses speech recognition technology from Vlingo, and reported mixed results. But it’s difficult to judge the user experience based on random road tests. (This is why MSG has pooled its resources to produce mobile search research that, like my own mobile advertising white papers, offers readers a balanced assessment based on first-hand experience and solid methodology.)

The Yahoo app, however, comes in too late to be included in Pump Up The Volume, MSG’s own assessment of Web search on the iPhone. But that won’t keep us from conducting our own road test of the Yahoo app soon. Regular readers and Twitter followers (@peggyanne) may recall I announced the project a while back (a teaser before we had further refined our methodology to account for fundamental differences between natural language and keyword search, an important improvement that makes the results all the more compelling).

The white paper, researched and written in collaboration with Peggy Albright, MSG Associate and founder of Albright Communications, will be released next week. By way of background, our work assesses the overall performance of the voice-enabled search services offered by ChaCha, Google, and Vlingo in a typical range of use cases and scenarios. (Vlingo for iPhone converts queries into text and submits them to one of two search engines, Google and Yahoo. We chose Yahoo.)

A special highlight: A foreword by Bill Meisel, Editor of the specialist publication and voice technology knowledge destination Speech Strategy News. I’m honored to have him on board for the voice search white paper, and look forward to showcasing his analysis/columns on MSG soon.

I won’t divulge all the white paper results and stats here. However, I can say that ChaCha’s  results proved superior to both the Google Mobile App’s voice feature and Vlingo for iPhone.

ChaCha uses human agents to transcribe and interpret/answer search queries (spoken as questions). However, we found the performance of voice recognition alone does not determine nor predict the accuracy of a search result. Indeed, one search provider exhibited high voice recognition accuracy but still had difficulty delivering the intended search results regardless of query format.

Some background on the methodology of this defining work, which will be available for free download.  We created 18 queries representative of mobile search usage and trends. The queries covered search categories considered common in the mobile environment, such as navigation (to a specific Web site), directions, local information, general information on timely topics, and specialized or unusual long-tail topics (sometimes referred to as “dinner table” questions). We also included specific queries that represent the most popular mobile search terms in 2008, based on mobile search data publicly reported by AOL and Yahoo. Recognizing that the search engines used in the Google Mobile App and Vlingo for iPhone services are built from the ground up to handle keyword search – matching documents/information on the basis that they contain one or more terms (keywords) – we conducted a second set of tests using keyword queries.

Peggy and I are proud of the research and look forward to collaborating together on future mobile search assessment reports and work contracted by our various clients. I will keep you posted of our progress on MSG.

A key takeaway I want to leave you with: This white paper provides evidence that mobile social search – which harnesses human judgment, thus restoring balance in a model that tends to promote search engine optimized websites over destinations the user may find genuinely relevant and useful – has significant advantages over algorithmic computer-centric search approaches. As I have pointed out in this earlier analysis, in the case of the mobile phone, an intensely personal device we have with us at all times, a more people-centered approach represents a perfect fit with our search behavior and our expectations for a more personalized service. Indeed, the rise of mobile social networks further underlines our increasing requirement for search services that effectively inject human preferences into the equation. This, itsmy.com CEO Vince Staybl, recently told me was the primary motivation for the tie-up between his mobile social networking service with socially-assisted search engine Taptu, and I fully expect many more such partnerships to follow.

Disclaimer: ChaCha is an MSG supporter and white paper sponsor. The opinions expressed in the white paper are those of Peggy Albright and Peggy Anne Salz, and do not reflect the opinions of organizations referenced in the paper.

On the heels of JumpTap’s announcement of tapMatch, its pay-per-click (PPC) performance mobile ad marketplace, I can finally post this exclusive Q&A with Paran Johar, JumpTap CMO. During the pre-briefing, we went through the nuts and bolts of the offer (unlike Google, which offers keyword bidding  and MCN – a provider of mobile search management, search merchandising, and PPC content promotion solutions offering category bidding- Jumptap offers both), and took a closer look at how the search technology potentially maximizes performance by delivering contextually relevant advertising.

By way of background, tapMatch builds audience profiles from multiple sources including search queries, context, and click thru history to match the most relevant ad messages to each mobile consumer. Advertisers can target their marketing message according to keywords, categories, location, demographics, mobile carrier, publisher, and mobile handsets including Blackberry and iPhone. Ads run across a comprehensive set of categories including automotive, careers, finance, fitness, and health, enhanced by keyword search parameters. They are priced and served by auction, and advertisers only pay when consumers click on their messages.

JumpTap tells me it can decipher the keywords from mobile Web pages and use that information to create categories of users. For instance, in this chocolate example above, if the user has gone to a site about mobile phones and then another site comparing different mobile technologies, the system knows that a search for “chocolate” has a higher probability of meaning the mobile phone “chocolate” instead of something you eat. JumpTap can then place the correct advertiser ads in front of the user that relate to chocolate phones and not candy.

Q&A EXCERPT:

Q: Let’s start with the landscape. When I read the draft press release I thought it competes with Google at one level and MCN at another. What is the differentiation?

A: Well, that’s really the point. It’s not just a pay-per-click marketplace. It is a pay-per-click marketplace that allows advertisers to bid all the way to the keyword level. Smart advertisers understand that keyword level buying is the best way to target users. So this allows you to target context, and [target] carrier handset, all the way to the keyword level.

Q: How does your technology do it?

A: Our technology crawls the page, extracts the relevant keywords, builds a taxonomy based on those keywords, and then builds a preference set to develop an audience profile to serve a relevant ad.

Q: How does this fit in with the other products and announcements I’ve tracked on MSG? I’m thinking here of your white label search, your premium ad network – the works.

A: You mention the premium mobile ad network. Now this has been an evolution to our business model. We started with tapSearch, which is our white label search product. We evolved into the premium mobile ad network, which still exists and is really toward let’s say the upper funnel of mobile advertising to drive brand awareness, consideration, purchase intent. We’ve got our platform, tapLink, to extract data from carriers. This [tapMatch] is the last piece of the puzzle, utilizing our search technology to develop audience profiles in a pay-per-click marketplace. It [tapLink] addresses the ROI sensitive advertiser. So, if the premium mobile ad network is really focused on the upper funnel, tapMatch is really on the lower funnel -  driving ROI, whether that is click-through, click-to-action, click-to-SMS, or click-to-call.

Q: What about publishers?

It provides publishers with access to multiple resources for their inventory monetization. First, they can allocate a percentage of that [inventory] toward brand advertising – actually as much as possible to get those high effective CPMs. Second, they can take any remnant inventory and run it through tapMatch with full transparency and full control to make sure that they’re not running let’s say, punch the monkey ads. The advertiser also could control on the other side, what types of publishers they run on.

Q: Relevancy is a big part of your messaging here. Is this because you sense a change in what advertisers require? It used to be about showing an ad and now it’s about making sure the ad matches context somewhere along the way.

A: Yes. Our goal is not to run billions and billions of impressions. Our goal is to make an impression – with both the consumer and the advertiser – with relevancy. The mobile phone is a very personal channel. We think the appetite for a user to accept what I call ’spam advertising’ has really diminished, and that’s why we really focus on driving relevancy from all sources.

Q: What is the fit with iPhone?

A: Well certainly iPhone apps are part of both networks. An iPhone application developer is really like a publisher with much more dynamic abilities for creative insertion in terms of integration into maps, integration into address books, whatever. So absolutely, a publisher has the opportunity to participate in either or both [ad networks]. And they can allocate their inventory based on their choice.

Q: Of course there are a lot of ad networks out there. How are you going to continue to differentiate?

A: If you can name me another ad network with 17 carrier relationships and search as part of its technology, then we have competition. The only one I know that’s even close is obviously Google. Google and Yahoo we compete with. But the AdMobs and the Quattros of the world are in another space. If you just look at the ad network component of our business, then, yes, we compete, but they don’t have that white label search technology and they don’t have any of the carrier information either.

Q: That may be – but the space is crowding fast…

A: We organized a mobile advertising conference in Florida a couple of weeks ago on a Saturday night through Sunday. And we had almost 200 brands and agencies show up. I organized that and I reached out to our friends at AdMob and our friends at Quattro, and they participated as part of this mobile advertising conference. They are ad networks, and there is differentiation. We all know Quattro – they take a different approach which is ‘I’ll build your WAP site in exchange for the ad revenue’. AdMob takes the long-tail approach.

Ours is completely different. We have those carrier relationships. We’ve got the white label mobile search technology that builds relevancy, we’ve got the premium mobile ad network for the top funnel, and then we’ve got tapMatch, a performance marketplace that builds relevancy; that takes it all the way to the keyword level, utilizing hyper-targeting.

You can’t just go out and get 17 carrier relationships. You can’t just go out and build a white label search engine and utilize that technology for hyper-targeting. That kind of stuff takes years and years of development.

Q: What about the mobile analytics? What can I track and target?

A: It’s fully self-service. The app has tracking mechanisms so you can set up click-to-SMS, click-to-call, click through, and track all of that at the individual campaign level.

Q: And the difference with AdSense here?

A: Certainly AdSense is similar. However, they don’t do carrier targeting or handset targeting or context. So it takes AdSense specifically made for mobile to the next level.

Q: You have 17 carrier relationships. These include:  AT&T, Alltel, Boost, Virgin, US Cellular, Orange Spain, TeliaSonera Group (in seven countries), 3 Sweden and Bell Mobility. It’s a good mix, but I miss more operators in Europe and Asia.

A: We’re looking at the rest of Europe, and we’re obviously looking at parts of Asia. But we’re doing so very carefully. Given the economic times, excessive capital expenditure right now does not make sense. We have to look at those opportunistically to make sure it’s the right time. And you’re going to hear a big announcement for us in Spain in the coming weeks.

Q: Let’s talk about some hard numbers. In your press release you state: “Reaching qualified mobile audiences with highly targeted, relevant ads elicits strong consumer engagement, increased click thru rates and higher conversions according to early testers of the tool.” What is the range of CPCs you see?

A: It really depends on the category and the keyword. The more granular you get in terms of your keywords, the more expensive the bid price. And it’s dynamic and all in real-time. What are the keywords on Google or Yahoo? It depends on the keyword and it depends on the category, and it depends on the day and time. It could range from $0.10 to $0.25 in some cases to several dollars.

Q: Not a ball-park figure?

A: Peggy, it just depends on the keyword and the time of day. It’s almost like saying how much does a TV spot cost. It depends if you’re in prime-time; daytime; late news. And it’s similar here.

Q: Many will read today’s announcement as  throwing down the gauntlet, challenging Google and Yahoo. Is that how you see it?

A: Yes, definitely it’s a David verses Goliath story and we don’t mind being David. The fact that people reference Google and Yahoo in an on-going basis with JumpTap is a good thing for us.

Q: So let’s wrap up with some nuts and bolts. When are you live and in which countries?

A: We can give you a demo log-in – it goes live on the 15^th. It’s only the U.S. right now.

My take: Competition is heating up, but JumpTap’s connection with mobile operators (and access to valuable customer data that Google and Yahoo will never see) is the source of competitive advantage. JumpTap’s marketplace (category and keyword) and spread of networks (Premium Ad Network and now tapMatch) position it to offer a powerful combination of premium and performance advertising, going a long way toward ensuring the best ads will appear on a site. The technology is in place, now JumpTap has to focus on execution and slow but steady expansion of its operator footprint.

Just two weeks after release and my new white paper (Mobile Advertising For The Masses) counts 500+ downloads. (Again, I am honored that Bango (white paper sponsor) refers to me as a “mobile guru.”) I always endeavor to communicate complex ideas in a way that everyone will understand, and am told people enjoy my accessible and entertaining writing style. But the real reason behind the popularity of this hands-on analysis of campaigns across three mobile social networks (BuzzCity, itsmy.com, and Peperonity) is timing. Mobile social networks are on the rise (a recent Informa report counted 200+ of them) and open for business.

Where is the money?

I was fortunate to speak at Mobile Advertising & the Rise of Social Networking: What does it mean for Brands, Agencies and Service Providers?, a Knowledge & Networking Seminar organized by AIME (the Association for Interactive Media and Entertainment) last week in London. I enjoyed the opportunity to network with mobile professionals in a casual atmosphere and will most definitely participate in future AIME events. Andrew Darling, AIME Director of Communications, tells me upcoming events/topics include: WAP publishing, mobile payments, mobile coupons, and mobile widgets.

My session looked at the nuts and bolts of mobile advertising in social networks, and the real results, revenues,  and strategies first-mover companies such as pioneer mobile flirting service Flirtomatic and brave consumer brands (via full-service mobile marketing agency Inside Mobile), have to share.

As I am currently conducting my own mobile advertising research, I was particularly interested to learn from Eric Mugnier, Inside Mobile Product and Innovation Director, that the agency has also done its homework in the form of an in-depth survey of 80 key decision makers in the global mobile advertising value chain. The report won’t be released for a few weeks/months but Eric, who is also interested in my input and ideas, has promised MSG will have it first. (Thanks Eric!)

In his presentation, which included video interview excerpts from a selection of interviews, Eric outlined a few clear trends/requirements for effective mobile advertising in a social network. Mobile advertising must be targeted and relevant; the industry has no shortage of good ideas, but it must address issues around scale; and finally, brands and agencies have built the proper foundations, and  now the priority must be to create a toolkit approach that will allow more companies to execute on the lessons they have learned.

“Killer app”

Where are the brands?

Further along than I thought if we consider the example of a major sporting goods and sports apparel company, an Inside Mobile client gearing up to release an iPhone app that combines creativity, communication, and community to deliver a compelling advertising experience that users can make their own.

In a nutshell, the app allows people to customize their shoe and share it with their friends. In the next phase, people will be able to buy what they created with their phones, share what they created with the community (and this is where it gets really interesting), geotag their creation to add another dimension to the discussion (this is what I created and where), and have the ability to post their creation as part of their Facebook profile. (More next week when MSG has the exclusive on this innovative campaign.)

As Eric put it: Allowing people to customize, share, and – most importantly – make the end-result a part of their own digital persona paves the way for effective and enthusiastic viral marketing. He’s right!

It was refreshing to hear Eric describe the campaign elements in these terms. I read it as proof the advertising ecosystem has moved a giant step forward in understanding that: 1) The emergence of empowered individuals, the advance of so-called digital natives (individuals who have grown up with the Internet), and the abundance of applications designed to give consumers more of a say in how they create, access and enjoy content have transformed communication and, more specifically, the business of advertising; 2) Advertising has become content, and brands and agencies must find ways to turn their one-way pitch to “consumers” into invigorating and effective two-way conversations; and 3) Advertising in a social network is all about active participation in the community and developing ways to interact with members and enable them to interact with each other.

My take: The principles I have discussed and debated with Jonathan MacDonald, mobile advertising activist and close friend/colleague for almost a year now, are no longer just ideas; they are the building blocks of ideal business models. Well done (!) – I’m sure Jonathan’s many presentations, trips, and workshops play a role somewhere in this transformation.

Mobile metrics

Speaking of progress, Henry Stevens, Director of Media and Entertainment, GSMA, updated us on the Mobile Media Metrics (MMM) initiative to use independently aggregated and audited metrics from operator network data to develop a common methodology (what to measure) and common process (how to measure). Agreement on these key points would enable media owners to measure performance of their media properties across mobile networks, and help media planners better understand audience trends and behavior.

Where are we now?

As we know, all five U.K. mobile operators are on board. Now the GSMA is well on its way to a commercial launch in the U.K. (the feasibility study is complete) and working with operators in other European markets to duplicate this across other regions. A technical solution for the anonymization and aggregation of operator data (allowing a persistent and unique ID), as well as integration with other relevant databases and third-party demographics, top the agenda.

But the real news is how all this can be integrated into existing reporting tools. The GSMA is currently seeking the input of brands, agencies, and media owners to ensure the process meets the long-term objective of the organization to drive the growth of mobile as a multimedia platform.

Another presentation that underlined the pivotal importance of analytics in the scheme of things came from Nandi Gurprasad, VP of Alliances, Bango.

In a case study of Tapatap, a Bango customer that was recently acquired by women’s social network LimeLife, Nandi showed how the social gaming community used analytics to measure the success of its mobile Web ad campaigns and refine advertising pitches and presentations to target countries, networks and handsets which it determined (through analytics) yield the best conversion rates. Accurate tracking of response rates across different ad networks also allowed Tapatap to better plan campaigns and, more importantly, determine customer acquisition cost.

As Nandi put it: The example shows how and why companies should leverage tools that “give them an edge” – specifically, tools that provide real-time and reliable information on users – and which provide answers to the all-important questions: Who (are my customers)? What (did they look at)? Where (did they come from)?

Vendor spin aside, mobile social networks are here to stay and grow. They offer opportunity for advertisers and drive demand for analytics solutions. (As I point out in my white paper: When the end-game is all about getting a big(ger) picture view of what you achieved and where you missed the mark, then a more comprehensive analytics solution is a must. In practical terms, the two (offered by mobile social network ad networks and independent vendors) are complementary – not competitive.)

Flirtomatic’s phenomenal numbers

Saving the best for last, a real highpoint was the inside track on Flirtomatic, a combination mobile social network and mobile flirting service with the ability to monetize mobile users through conversation with content such as virtual flowers, chocolate, and kisses.

Matt Dicks, Flirtomatic Commercial Director, reported the community counts over 1 million U.K. users and outlined how Flirtomatic turns people with a passing interest in flirting to spending customers.

The trick is retail 101 all over again: Delight the customer.

In a nutshell, Flirtomatic “makes newcomers feel welcome when they come in.” Some 55 percent of daily new users go active and send a Flirtogram (signaling they want to flirt); some 20 percent of users go on to spend with Flirtomatic on items such as virtual gifts or features to enhance their own profiles. Flirtomatic chalks up revenues of $10 per month per spending customer.

At the other end of the spectrum, Flirtomatic counts “over 100 million WAP impressions per month.” Where does mobile advertising pay dividends?

A whopping 84 percent of page impressions are generated on-portal (where Flirtomatic essentially plasters operator portals with banner ads). Next are ad networks with 12 percent, followed by paid search with 3 percent (a category Matt said shows significant growth as more users go off portal and explore mobile search services to get where they want to go).

So, operators have the volume now, but will this continue? Matt expects operators will rule the roost for another 2-3 years. After all, operators are the gatekeeper and the billing agent. An envious position between the content company and the customer indeed!

Flirtomatic has also made the move from virtual gifting to the real thing (overcoming a logistics nightmare to let members give the objects of their affection chocolate and sexy underwear). The results: 500 gave chocolates and 300 gave underwear. More important than the numbers, the experiment proves members are willing to give and receive real gifts using their mobile phone.

Read between the lines, and this behavior bodes well for brands and advertisers.

As Matt pointed out: It’s a golden opportunity for brands to get involved. Think of the sponsorship and sampling opportunities. Encourage members to send flowers (and plug Interflora in the process, for example.) Cross-sell and up-sell chocolates (you just sent your loved one Cadbury Creme Eggs, have you thought of trying a milk chocolate bar?).

The possibilities are endless – and the conversions can peg the needle. Matt walked us through the example of an early experiment Flirtomatic conducted with a popular brand of cider. Members could “shout a pint” to their buddies using their mobile phones. The recipients got a voucher on their mobile phone for a free pint of cider and the location of the nearest pub that would redeem it. The results: 348,000 members sent a pint to their friends over a two week period; CTR peaked at an impressive 10 percent.

Should mobile advertising stop at delivering a message? Or should it seek to unite the virtual and physical worlds (a topic I also examine in detail in the Netsize Guide 2009 on offer in the MSG sidebar)? The jury is out on this one, but the discussion will continue at MSG.

What do YOU think?

BTW: Matt kindly invited me to visit Flirtomatic during my next trip to London, an offer I will gladly take him up on. I have long admired the company and Mark Curtis, Flirtomatic founder and author of this  well-known book on disruption culture, whose views I also hope to capture in a thought-provoking podcast. If there was ever a mobile social community success story worth telling, then Flirtomatic is it!

Disclaimer:  Bango is an MSG supporter.

I’ll follow up on those conversations next week. For now, all attention is focused on Mobile Advertising For The Masses, my new-release white paper timed to CTIA and an essential read for marketers who want to tap into mobile social networks (and the ad networks they provide) to drive positive results. This time I evaluate the analytics capabilities offered by three ad networks: BuzzCity (BuzzCity), itsmy.com (itsmy.biz), and Peperonity (AdMob). I also compare the depth and breadth of analysis they provide, and examine the need for an additional comprehensive mobile analytics package to connect the dots, fill in the gaps, and give me the big picture view of what my campaigns achieved and how I might use this insight to plan and target future campaigns.

It’s among my best work and worth the all-nighters during and since my stay in New York to put in the final finishing touches. I won’t go into the details here (for that you’ll have to download the free white paper), but I can say BuzzCity came out on top, allowing me to visibility into who my customers are (gender), where they are (location down to the U.S. state level), and handset make and model, for a start.

itsmy.com also allowed me to hone my campaign to target my key demographic, but outdated order and payment systems dampened my enthusiasm. Peperonity also had a few highpoints, but hasn’t quite reached its full potential.

I look forward to catch-calls and briefings with senior executives at both networks. My mobile advertising experiments cued me into some interesting features and functionality in the pipeline and I am anxious to learn more, insights into their ad networks, which  I’ll be sure to share on MSG.

BTW: I’m also pleased that I have been invited by Andrew Darling to speak on mobile advertising, social media and my key findings during Mobile Advertising & the Rise of Social Networking: What does it mean for Brands, Agencies and Service Providers?, a Knowledge & Networking Seminar organized by AIME, (The Association for Interactive Media and Entertainment) that will take place in London on April 2. (More details on the program and venue here.)

All attendees will receive copies of my two best practice white papers – “Mobile Advertising for Newbies” and “Mobile Advertising for the Masses.”

Speakers include:

• Nandi Gurprasad, VP of Alliances, Bango
• Matt Dicks, Commercial Director, Flirtomatic
• Dusan Hamlin, Joint Managing Director, Inside Mobile
• Mark Brill, Chairman Mobile Council, DMA
• Henry Stevens, Director of Media and Entertainment, GSMA

Key themes to be explored:

• Is advertising content?
• Brands in social media advertising – listen first, then join in the conversation.
• If social networks have become the new ‘water coolers’, incubating new micro audiences with differentiated tastes, what makes advertising too intrusive in this new environment?
• What’s the ‘next big thing’ in mobile advertising – mobile for the masses?
• Is it just about advertising messages? What kinds of mobile services suit mobile advertising?
• Measuring success and understanding how important targeting is. Which types of campaigns work?
• Are social networking services the ultimate channel for the ‘long tail’?
• What is ’social currency’ and how do you convert it into revenue?

As I illustrate in my white paper, mobile social networks have the inside track on their growing membership. Opt-in procedures, often requiring users to register and fill out detailed questionnaires, put mobile social networking companies in the enviable position of being able to not only collect valuable customer data, but also provide advertisers a breakdown of customer segments by gender, location, make and model of handset – and much more. It’s valuable information brands can harness to fine-tune and plan future campaigns.

But, as I show in my final analysis, you can do one better if you also employ a more comprehensive analytics solution to measure success, failure, and how well your campaign really achieved your business objectives.

A comprehensive analytics solution represents a perfect complement to the solutions provided by mobile social ad networks, giving advertisers a more holistic view of their customers and allowing them to answer the critical questions every advertiser and publisher needs to know: Who are my customers? What did they look at? Where did they come from? What were the results? Did community members convert to the campaign goals?

My take: To maximize results on a social networking site, it’s critical that advertisers follow these three principals.

• Make the most out of mobile analytics offered by both the ad network and an independent vendor such as Bango to match your marketing message/campaign with the community. Social networking sites generally require members to register, which raises the bar in terms of interest, motivation, and qualification. This puts your message in an environment where members are predisposed to relevant messages. In a best case scenario, people should view your marketing as an extension of their mobile experience, rather than spam.

• Consider virtual gifting and other schemes to provide something of value to users and their community. After all, the goal here is to encourage user interaction, cultivate a two-way conversation, and boost brand awareness. This is not an environment for marketing pitches and product-pushers. Success stories include Flirtomatic, a pioneer mobile flirting service with the ability to monetize mobile users through conversation with added fun and great content such as virtual flowers, chocolate, and kisses. The company recently extended its reach to enable members to give the objects of their affection real gifts including chocolate and sexy underwear.

• Participate actively in the community, and interact with members to build relationships and enable them to deepen their relationships with each other by providing tools that will let them do what they are there to do: Keep in touch with friends, connect with people who share their interests, and share content and feelings with the community. More importantly, keep in mind you don’t need whiz-bang technology to engage with members in a meaningful exchange about your brand. Text ads and banner display ads are a great way to start. Besides, they are going to be around with us for a while yet to come. The innovation is not in advertising formats, but how we use them.

In a market where two-way conversation is the end-goal, and where traffic on mobile social networking is on the rise, brands that lend their voice to the conversation wil most likely deliver their advertising message loud and clear.

Disclaimer: Bango is an MSG supporter.

I caught up with Steve Ives, Taptu CEO, in an exclusive interview where he revealed the recent deal with itsmy.com is just the start. Look for three more deals with mobile social networks before February. Also expect Taptu to sharpen its focus on mobile search monetization, particularly in the U.S. where Steve tells me most of his traffic is. (And there’s an even better reason to concentrate on mobile search sponsored links; sources tell me CPMs around key word search terms are in the $3-$10 range.)

Listen to the podcast here. [20:22]

I should add it’s longer than others in the series, but that is because we deep-dive into a variety of key topics, including mobile search trends, Taptu’s ambitions to deliver mobile search verticals (and allow users to personalize them), the impact of the iPhone, the emergence (and pivotal importance) of a new segment Steve calls “unwired socials” (accounting for over half of Taptu’s users today), and a few details of a strategy Steve would rather keep under wraps to develop a “user interface for discovery” inspired by touch devices.

But for me, the real news is the keen focus on mobile social networks. In November Taptu quietly and cleverly sealed a deal with itsmy.com, an ad-funded mobile-only social network with two million users, to provide core search functionality (allowing them to search for mobile content such as videos, entertainment, music, and images from within the community as well as directly from their personal homepage). The deal also lets itsmy.com monetize those searches through mobile search sponsored links. (By way of background, Taptu replaces Google, and I’ll go into the reasons in my podcast with Vince Staybl, Gofresh CEO, which is coming up in this series. As Vince put it: Google failed to “get” mobile – a serious shortcoming that convinced him to switch to Taptu.) Gofresh isn’t the first mobile social network to ally with Taptu for search and advertising. Moblr quietly replaced Yahoo with Taptu in February 2008 to do much the same thing. (More evidence of a trend: The decision by BuzzCity to partner with MCN for mobile search for its mobile-only social network myGamma in Thailand.)

Another deal from Taptu you may have missed in the holiday hectic: A partnership with ZooVision, a U.S.-based free streaming mobile video portal, to provide mobile search and no doubt increase its entertainment-related inventory. (By way of background, Taptu replaced Google – yet again.)

Other highlights from the podcast:

FUNDING: In December, Taptu secured GBP6.45m in series B funding from its existing investors (3i and Sofinnova) and appointed Andreas Bernstrom to the position of Chief Operating Officer (COO). The money will allow Taptu to focus on monetization. As Steve put it: “We’ve only just started putting ads on our site. So, for 09, the big focus is optimizing the monetization, so for every thousand searches that get made on our site, we optimize the revenue.” (The business model is a rev share.)

AD NETWORKS: Taptu works with Yahoo, Google and AdMob. “We’re focusing on search ads and search ad platforms, so we’ve been working with Yahoo in the U.K. for a couple of months now just to explore what happens when we put those search ads up on our site….For us, a big priority next year is the U.S., because actually the majority of our audience is in the U.S., and looking at how we best monetize that. But it is going to be search ads, in other words ads that are tied into search keywords, because we found from our ad experiments that they have the best revenue per thousand.” (I asked around in the industry and the word is keywords can fetch $3-$10 CPMs.)

RELEVANCY & ENAGEMENT: The industry needs to work on both. Online we have annoying display ads, and users are anything but engaged. Mobile could go the same way – so wake up! “In the mobile world, users can develop banner blindness very quickly. They’re not terribly engaging, and we’re training users to ignore them because most ads are not very relevant to the needs of the user. So we’ve got to increase relevancy on the one hand, and we’ve got to make them more engaging and kind of entertaining on the other hand.”

SEGMENTATION: Most of the audience is Unwired Socials whose first screen in is the PC, but this is changing. Make way for the Pioneer Youth, propelled into a strong second position by the iPhone and other touch screen devices delivering a rich mobile Web experience. (Keeping in mind they still don’t do a great job transcoding sites with flash, for example.)

SEARCH BEHAVIOR: Unwired Socials search for entertainment and some adult; Pioneer Youth gravitates to career and lifestyle. Sensing an opportunity in other verticals such as mobile job search in emerging markets, Taptu is determined to evolve “from a sort of beachhead in entertainment search, which is where we started, to add more and more sources to become a universal search engine.”

FEDERATED SEARCH: Figures prominently in Taptu’s roadmap. “Our strategy is to extend that to allow for hundreds or even thousands of sources and to allow users to create their own vertical channels with Taptu. It’s going to take a while to translate that vision into reality, but it’s the way forward which offers the best scope for improving the relevancy of results because you can have custom scoring systems for each channel which are optimized to that channel.” As Steve sees it, it’s all about “allowing the user and having a discovery into user interface which allows the user to explore these different channels easily and look for related results.”

UI IMPROVEMENTS: Look for them! Steve preferred not to disclose details, but he’s bullish on touch screen devices. As he puts it: “Touch devices give you the opportunity for a much more interesting user interface for discovery than normal phones, so you’ll see some innovation from us in that area.”

2009 TRENDS: A slowdown in the market and fewer people replacing their handsets. The bright spot: The continued enthusiasm for the iPhone and the N97. Another interesting development to watch for: Local search on mobile will develop into a different market – with different dynamics. “The user interface for local search is going to be in a mapping application; it’s not going to be the search engine search box. So, local search will gravitate – it will almost fork into being somewhat of a different market, accessed from a different point on the handset user interface.”

On a personal note, I’m pleased to report Charles Knight, at MSG partner site AltSearchEngines, is back in full-force and looking forward to a fantastic 2009 with more staff, more content and more traffic. And it’s a similar success story at MSG. He is cross-posting this podcast and all MSG mobile search coverage. I’m excited about the cross-pollination because many super-cool online search engines are gearing up to go mobile – giving both our sites loads to track and analyze. Another trait that brings us closer together: Our determination to offer Alts (alternative search engines) a platform. To this end, we are planning yet another event, much like our search engine dinner in Berlin last fall. This time it’s MARCH 30 in San Francisco (timed to the SF Expo) – so please mark that date.

Disclaimer: MSG collaborated with Taptu on a white paper in 2008; MCN has been an MSG supporter.