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.

Regular readers may recall that my mobile advertising white paper (Mobile advertising for newbies) documented how I (together with my esteemed colleague Maria Sanchez) set up the campaigns using Mobislim, a small-scale mobile site created by Bango. The white paper also examined the depth and breadth of mobile analytics solutions offered by AdMob and Bango. Today’s post will take that all a step further, providing an analysis of the performance of the three ad networks I chose at random. (BTW: You can read the raw data on Maria’s new-look Mobislim blog.)

I had assumed that made-for-mobile ad networks, with mobile at the core of their competitive DNA, would naturally deliver superior results – or at least shine when compared with Google. (After all, Google, an Internet company, has had a tough time recently delivering mobile sites in their mobile search results and displaying mobile advertisements the way publishers/brands meant them to be. For more background, I recommend you read this MSG post which documents Google’s poor search experience and results.)

But the numbers delivered by AdMob and Bango tell another story. One, Google limited my campaign to the U.S. and U.K. as I had specifically requested. Two: Google delivered mobile traffic from mobile users (as opposed to traffic from users on their PCs) to my site.

In my view, Google “gets” mobile advertising. (Ironically, this view is mirrored in an informal survey of 79 customers conducted by Bango. In it, 86.7 percent of respondents named Google as their number one choice in mobile ad networks. Yahoo came in second with 26.7 percent, and Adultmoda/Admoda came in third with 21.7 percent. Multiple answers were allowed.)

Geography:

AdMob shows me I have 21 visits from Google – all from the U.S. (Hmm. I wonder: Are users in the U.K. surfing less than they do in the U.S., or is the U.K. a white spot in Google’s ad network footprint?). Granted, Google’s 21 visits may seem low when compared to 323 from Decktrade and 127 from Mo’Jiva, but don’t be blinded by the numbers. A closer look shows that 70 visits (or 22 percent of my total traffic) coming through Decktrade came from countries I did not target (and also did not budget for).

Bango – which reports Google gave me 18 page views from 17 unique visitors, with 83 percent coming from the U.S. and 11 percent from the U.K. – shows Decktrade delivered me 270 page views from 184 unique visitors and six countries, including India, Indonesia, and Nigeria. Again, that is four more countries than I (literally) bargained for.

But it’s not just Decktrade that delivers a high proportion of traffic from countries I did not specifically target. AbMob stats tell me 127 visitors came to my ad via Mo’Jiva. But my top three countries were India (82), the U.S. (19), and Nigeria (10). Put simply, only 15 percent of the traffic generated was actually relevant to my campaign. Bango reports Mo’Jiva delivered 81 page views from 72 unique visitors across 4 countries, including India, and Iraq.

As I wrote in my white paper, it’s great that users around the world are surfing the mobile Internet on their phones. But mobile advertising is a business, and clicks coming in from countries I did not target in my campaign are quite frankly a waste of my budget.

My take: Mobile ad networks must do more to ensure proper geographic targeting, and limit the number of users elsewhere who just happen upon my ad. Do more to control this – or risk losing advertisers (like me) to ad networks (like Google) that can. While Google did not deliver a huge number of page visits, it was nonetheless able to deliver traffic from countries where my ad message would be both relevant and effective.

Finally, a word about the split between mobile and PC users.

To be clear: Mobile advertisers want to reach mobile users.

They have creatives that match the medium, and campaigns that have been fine-tuned to target users on their phone. Put simply, mobile is the medium, the message – and it should be the audience.

So why do PC users account for a significant share of traffic coming from Decktrade and Mo’Jiva ad networks? How do I know this? AdMob and Bango mobile analytics identify iPhones, and also provide visibility into devices accessing my site via a Wi-Fi connection that appear as PC users. I can say with confidence that PC/laptop users are indeed accessing my mobile ad campaign.

According to AdMob and Bango, Google traffic comes from a mix of smartphones and devices from manufacturers including Blackberry, Samsung, and Motorola.

Not so for Mo’Jiva. AdMob reports the number two device accessing my site via Mo’Jiva is a Microsoft PC (using IE). Bango tells me 31 percent of traffic from Mo’Jiva came from users on their PC. Likewise, PC users make up much of the traffic coming in via Decktrade from countries I didn’t target in the first place.

My take: This is serious. It’s early days and we accept that all ad networks have bugs to work out. But I have to wonder how many mobile advertisers want, appreciate or would be willing to pay for traffic from PC users. Put simply: Mobile ad networks must take steps to ensure the lion’s share of visitors they deliver to mobile sites are indeed mobile users.

UPDATE: Maria and I are gearing up to do another series of campaigns (this time starting with AdMob and Admoda), which we will document on our blogs, so I encourage you to check out both sites. JumpTap has reached out to solve a glitch in the sign up process that prevented us from running a campaign using its ad network. Wish I could say the same for Yahoo and Medio Systems. Both have yet to answer our emails. In the meantime, the overwhelming positive response to my first white paper has inspired me to write a “Vol. 2″ explaining in simple terms how to set up and run campaigns on mobile social ad networks. It is slated for release during Mobile World Congress (MWC), so watch this space! And finally, I repeat my open invitation to other mobile analytics companies (thinking here of  Mobilytics, for example) to contact me directly for a briefing.

Disclaimer: AdMob, Bango and JumpTap are MSG supporters.