Imagine a living room where a large flat screen wirelessly attached to a set top box hangs from the wall. You enter a personal code into the set top box that recognizes your profile; the screen welcomes you to a portal where there are no channels only menus with links to personalized content and apps that range from social networking to commerce to premium content and entertainment.  A blinking icon reminds to you to record Wimbledon while an ad from Wilson invites you to view their latest rackets.  As you click the record button, you slide out the keypad on your remote and navigate to the Wilson site where you purchase a new tennis racket.  Payment for the racket is included in your monthly cable invoice.

Sounds like science fiction?  Hardly.  We are on the cusp of next generation iTV (interactive television), services that will elevate our viewing experience. Advertising will also be transformed,  paving the way for two-way communications that enable brands to target households according to key demographics and other information collected by the set top box (STBs). Mobile devices, widely regarded to be the remote control of our digital lives, will surely play an important role in this scenario. (Mobile already has a central spot if we consider how people reach to their phones to cast their vote for talent shows, follow sports and read the gossip during soap operas.)

The promise of being able to access the wide open Internet and everything in between on your TV may be a while away, but the battle for the living room, the one that will decide who monetizes our content consumption and who cashes in on the commercial messages we consume, is being fought now.

Best positioned in my view are the cable companies, who have the trump because they own the signal into the home and have a trusted relationship with subscribers. They also benefit from established business partnerships with broadcast and cable network programmers, that receive billion-dollar fees for entertainment content.

But there are other players lining up to stake their turf. For example, Tier 1 service providers in North America and Europe are rolling out high-speed connections into the home as part of their multi-play strategies to deliver premium content and advertising services via IPTV (TV via the Internet). While the viewing experience for consumers might not be radically different, the opportunities for brands to deliver targeted and relevant advertising could get a boost since multiplay is about creating a holistic view of the customer by monitoring behavior across channels including mobile.

Little wonder that Internet giants are also lining up to own the living room experience. Navic (acquired by Microsoft), gives broadcast and network programmers a unified platform to distribute premium content and advanced advertising services across disparate cable systems.  And let’s not forget Google. Through its relationship with Dish Networks and Visible World, Google is  geared to provide brand advertisers with expanded reach and more precise demographic targeting aimed at satellite and cable subscribers.

These companies have their eye on the prize: knowing the customer first and best. But it’s not an easy goal to reach. Operators concerned about privacy issues are predictably reluctant to release STB data to marketers and industry partners. What’s more, cable’s legacy architecture presents a host of interoperability and scalability problems that must be overcome in order to provide brands national reach across regional cable companies.

So what is cable doing to overcome these challenges?

Although the space is crowding and the privacy/technology obstacles are significant, cable companies are nonetheless next positioned to win the battle for the living room. But how well prepared are they for the struggle ahead?

The cable industry along with CableLabs, the industry’s research and development arm, has developed several key initiatives to usher in the age of iTV. These efforts, already well underway, provide the standards and interfaces that will allow brands and publishers to conduct business via cable and better target their audience demographic.

To get the inside track on work in progress I recently spoke with Paul Delzio, Director of Business Development and Product Management at ARRIS, a provider of infrastructure and advanced advertising solutions to cable. As Paul put it: ARRIS and other solution providers are “helping operators build a superhighway to the home and throughout the home using modern architecture that will ensure an interactive future with robust subscriber services.”  As he sees it, operators will monetize this highway through differentiated data plans, digital TV fees and new revenue streams from t-commerce (tv commerce), advertising and billing.”

CableLabs’ development of tru2way, java-based middleware that will be integrated directly into next-generation TV sets, is a critical step in this process.  With it, subscribers will be able to interact with a wide range of applications such as program guides, commerce, games, Video on Demand (VOD) and web browsing, without the need for a set top box.  Naturally, the world’s largest TV manufacturers are on board to bring us this technology.  Panasonic, Toshiba, Sony, Sharp and Samsung are just a few of the players lining up to cash in on this opportunity. Look for a big push at retail this holiday season.

But not everyone is going to rush out and buy tru2way TVs. So, CableLabs has introduced EBIF (enhanced binary interchange format), a technology which is being integrated into STBs as we speak. In fact, 15 million units are projected to be installed throughout the U.S. by 2010.  EBIF will enable true interactivity through multimedia pages that resemble html, so the consumer experience will have a similar look-and-feel to what we get on the Web. The advantage for brands is lead generation because cable viewers can click on a marketing message, in the form of a static banner, and receive information or goodies in the mail.

According to Paul, this “Cable Advertising 1.0 (which makes use of snail mail to fulfill a consumer request for information) will open the doors for brands eager to justify TV spend.”  Marketers see the opportunity and have stepped up spend on advanced advertising solutions from ARRIS and its partners, which supports them with the same tools they know from online and mobile, such as campaign management, media planning, analytics and response measurement.

These Cable Advertising 1.0 ad products and fulfillment services have been wisely engineered to meet the needs of this emerging ecosystem and to provide user experiences we can appreciate via this medium. Graphic overlays on top of full motion TV commercials will allow viewers to click through to micro sites where they can request information or coupons which will be delivered in the mail, allowing advertisers to target demographic segments by selecting zip codes.

Interactivity will also play a role, but mobile won’t be a shoe-in here. Subscribers can also participate in voting and polling using their TV remote control. Will we really want to use the cable remote control for text messaging? The jury is out is out on this one, but it’s clear there is a laundry-list of usability issues that will have to be solved before the cable remote is our keypad of choice in the living room–particularly when you consider the sophisticated touch and tactile keypads next generation smartphones will provide.

Personalization and relevancy on the big screen

Where are brands in the equation? The good news is significant progress is being made on the new standards and interfaces that will allow brands and marketers to buy interactive and addressable advertising locally or across multiple cable operators. Spearheading this effort is a consortium of ecosystem partners including SCTE (Society of Cable Technical Engineers), systems manufacturers including ARRIS, Biap, BlackArrow and Sigma and Canoe Ventures, a joint venture funded by the cable operators.

For brands seeking national reach, Canoe Ventures is developing a platform for advertising stewardship and fulfillment across the top six cable operators in the U.S.  The platform will aggregate inventory and subscriber intelligence to provide brands with rich data services, localized messages, lead generation and fulfillment on a national basis.

The platform will also no doubt attract the attention of Web giants who want to get in on the action. In fact, Paul tells me it’s “inevitable that major retail portals like Amazon and Expedia will want to collaborate with operators to provide subscribers with a personalized shopping experience.” What will make this experience more enjoyable for consumers and more targeted for advertisers? The key to the equation is unlocking the rich assets — our transactions, interactions, browsing behavior and viewing history all captured in the STB.

And why wouldn’t they be there? After all, it’s much more enjoyable to view a HD large screen to select your next vacation rather than squint and scroll on a 15” laptop. Moreover, cable operators are in great position to expand their billing systems to accommodate billing partnerships with the leading online retailers. Now consumers can buy what they see on TV and add it their monthly bill (Does this sound familiar? Mobile operators are determined to leverage their billing relationship in a similar way.) Shoppers benefit from a consolidated bill from a trusted provider.  Brands will love this — a virtuous cycle of shopping, analysis, advertising and more shopping.

In fact, astute brand managers will see the synergies between cable and mobile. Leads collected from the TV can be fed into mobile advertising systems enabling brands to continue the conversation on an individual basis.  Additionally, mobile SMS will grow as sports and reality TV continue to prompt voting and polling.

What else is cable doing to hedge their bets?

While excitement around Cable Advertising 1.0 continues to grow, some cable operators are exploring their options. In July Time Warner Cable and Comcast joined up to launch “TV Everywhere”, an over the top service (that is, where content is going over the Internet and not through the STB) designed to give cable subscribers access to premium content online.  Content from  cable network programmers such as TBS, TNT and Starz, along with movies from HBO and Cinemax, will be made available to Comcast and Time Warner subscribers.  It is rumored that AT&T will jump on the band wagon, as well.

But, as Paul pointed out, over the top is both “an opportunity and a threat.” On the opportunity side, TV Everywhere will accomplish several important tasks; it will extend audience reach, allowing operators to further monetize ad revenue, while at the same time reinforcing brand loyalty.

As a threat, TV Everywhere will enable subscribers with tru2way TVs to access the Web and enjoy premium content at no cost.  Case in point is premium content provider Hulu. The company’s audience , which has doubled since launch to approximately 1.3 million daily visitors as of July (Quantcast), underlines the validity of the ad-supported business model.   Hulu advertisers include some of the world’s leading brands : Johnson & Johnson, McDonald’s, Visa, American Express, Best Buy, Chili’s, DirectTV, GM, Intel, Nissan, State Farm, Unilever, Wal-Mart, Cisco, and Procter & Gamble.

Plus, it doesn’t take much imagination to envision extending the concept of TV Everywhere to the mobile Internet. Combined with mobile’s portal personalization and recommendation engines (already delivering good user experiences to millions of subscribers in Europe and Asia), premium content streamed over the mobile Internet would provide the broad reach brands have been waiting for. Major Tier 1 service providers planned CAPEX investments in LTE can be subsidized in, no small way, by interactive video advertising dynamically inserted into premium content on the handset.  

Bottom line: who will dominate the living room?

At the end of the day, the battle for the living room will be determined by sophisticated personalization and recommendation engines that understand our preferences and profiles and serve us relevant content and marketing messages.

When operators append third-party retail data to subscriber demographics and STB viewing patterns, then the vision of personalization begins to get interesting.  Comcast Spotlight, in fact, is leading the way by appending third-party data from Experian to improve household targeting.  It’s easy to imagine households that frequently purchase from Toys R Us are a good bet for family products or mini vans.  And personalization technologies will connect the dots for sure.

While the wide spread adoption of tru2way is good news for cable operators it is also good news for telcos and premium publishers.  Sure, subscribers will be free to browse off-portal.  But why bother?  A rich and personalized portal with premium content, entertainment, shopping, social networking, video on demand and other services, will make browsing the Internet irrelevant.

So, who will dominate the living room?  Cable is in the driver’s seat – for now.  In view of somewhat difficult (but not insurmountable) environmental challenges, time will tell if they will be able to deliver the vision of a personalized portal with robust services supported by advertising,  If they don’t, the leading telcos that follow a multiplay strategy and Internet players will be just a few clicks away.

Jim Levey, formerly Director of Product Marketing for Search and Digital Advertising at Amdocs, joins the roster of authors and influencers contributing news, analysis and thought leadership to MSearchGroove. He comments on developments in personalization, recommendation and mobile advertising.

Mobile Groove, the monthly podcast that focuses on the news and companies that matter most in mobile — is back with a great line-up of topics and the usual mix of insights and outspoken observations from co-host Inma Martinez, my über-connected and always professional partner in crime. (We missed posting on Friday, but the reason for the delay will be clear when I take the wraps off an all-new MSearchGroove, so watch this space.)

Mobilize, the conference Inma attended in September, left a lasting impression. Her SWOT analysis: a great line-up of startups and a high level of energy and VC activity in the Valley. Where does this leave Europe? Inma (also based in London) connects the dots in some recent investor reports and concludes Europe may see its best and brightest in mobile “defect.” Is the U.S. the place to be if you are a mobile entrepreneur? Listen in and let us know what you think.

Speaking of startups, Inma also outlines the highlights from Seedcamp, a program created to jumpstart the entrepreneurial community in Europe by connecting next generation developers and entrepreneurs with over 400 mentors from a top-tier network of company builders; including seed investors, serial entrepreneurs, product experts, HR and PR specialists, marketers, lawyers, recruiters, journalists and venture capitalists. One company that stood out: VouChaCha, a U.K. startup that delivers vouchers to your mobile phone. Where is the hold up in Europe and why aren’t coupons a de facto part of our daily mobile routines (as they are in the U.S.)? You tell us!

Other success stories Inma shares: Flirtomatic, iScoot and eBuddy.

CONTEXT MATTERS?

Will location-based services excite women? Well, we beg to disagree.

Listen to the lively podcast here [23:54].

What about women who are interested in bargains are willing to drive miles in pursuit of discounted designer clothes, for example. (Think of the success of outlets in the middle of nowhere?!) Will an app that tells women what’s on offer nearby fly or fail? And where are the female-focused apps anyway? Men may have their iPhone app that celebrates flatulence – but where are the apps that target women? Talk about leaving money on the table!

BLYK MEDIA & SOCIAL MEDIA

In a follow up to the last podcast Antti Öhrling, Blyk Co-Founder, joins Inma for lunch and the opportunity to explain Blyk’s real business objectives. It’s not about mobile advertising; it’s about mobile media. Inma tells us it is an ambitious model – but one that could work well for Blyk. Listen in and find out.

And we discuss the buzz around social media, giving Vodafone (and the fast-followers sure to make headlines in the next weeks/months) huge credit for Vodafone 360. Why is social media big in mobile? Inma tells us that part of the reason could be the popularity of Twitter on mobile. (She should know; when it comes to mobile London is the Twitter capital.)

We also revisit Spotify and dissect its mobile ambitions. Is it gearing up for a showdown with Apple? Listen in and let us know what you think.

RAISING OUR GOBLET

This time Inma salutes Mark Curtis, the mastermind behind Flirtomatic, a phenomenally successful freemium flirt and fun service.

Fresh from several mobile advertising events, I raise my goblet of rock to Dagmara Brylack for sharing a milestone mobile advertising case study during Mobile Marketing Forum Europe (which I analyze here). I also recognize Mark “Mr. Mobile” Wächter, for his work to launch MMA Germany. When it comes to mobile advertising, Germany is a potential powerhouse (!)  and future posts here on MSearchGroove will highlight the stats, campaigns and companies that make this market the one to watch.

Until next time – keep it fun!

PERSONAL THANKS

Our thanks to the Grant Butler Coomber team (and Billy Burnett) for their continued advice and support on how to build awareness of this podcast series and other MSearchGroove initiatives.  I fully recommend them as our PR team of choice if you want to build your brand in Europe. In the U.S. I am indebted to Jeff Fishburn (“always-on” at OnPR) and Liz Erk, whose agency, The Jaxson Group, also advises MSearchGroove. Her talent: securing major media placements and speaking engagements for client companies.

But most of all – thanks to you, our listeners. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter (@mobilegroove) or email us at mobilegroove AT msearchgroove DOTcom.

Related posts:

PODCAST: Thought-Provoking Mobile Groove Series With Inma Martinez Debuts Today; Offers Inside Track On Industry Disasters, High-Flyers & What’s Highest On Investor Radars

Mobile advertising must deliver value.

It’s the key takeaway that has run through each of the 20+ industry events I have attended/chaired over the past year like a leitmotiv. However, the value of mobile advertising is changing.

At first, many brands/agencies were convinced that their value proposition was inextricably linked to their level of cool. In line with this mindset, they focused on fun campaigns around free content such as branded games, ringtones and images, as well as some viral elements people could pass around to their friends.

The strategy has paid dividends for brands such as Coca-Cola.

A textbook example is the Fanta Stealth Sound System, which harnessed high-pitched frequencies that are audible only to youth thus providing young people a new way to communicate with each other without adults listening in. Another campaign that generated buzz (and impressive results) was Fanta Virtual Tennis. The world’s first 3D augmented reality tennis game let players use their mobile devices as tennis racquets to hit a virtual ball.

COKE MOBILE MILESTONES

At Mobile Marketing Forum (MMF) Europe, Hinde Pagani, Coca-Cola Senior Mobile Marketing Manager, Global Interactive Marketing, treated attendees to a string of case studies that included these gems. But the real excitement was about simple SMS campaigns that employed a mechanism known as UTC, or under the cap (unique codes inserted under each soft drink bottle cap) to engage people and increase brand trust.

Coke still offers its demographic fun, free content. (It boasts three iPhone apps, including a runaway success that has been downloaded 500,000 times in two months – without promotion!) But it’s campaigns that combine free content with free airtime that are the real crowd-pleasers. In fact, this winning combination has allowed Coke in India to count a whopping 5 million responses in just four months. Coke in Germany has also run a similar campaign, offering customers three minutes or three SMS free of charge.

Read between the lines, and value has new meaning. It’s still about delivering cool content, but it’s also about delivering a service that teens (and their parents) appreciate.  As Hinde put it: “(With these campaigns) we gain teens’ trust and please their moms.”

PROCTER & GAMBLE CAMPAIGNS

Another company that benefits from a sharp focus on sensible service is P&G.

In fact, the presentation from Dagmara Brylak, Proctor & Gamble’s CEEMEA Mobile Subject Matter Expert, was my personal favorite because it illustrated how brands can deliver value by providing guidance, advice and education. (All the more important that brands take this responsibility since the mobile screen is the only screen in emerging markets.)

Case in point: an ingenious text-to-win campaign for Pampers diapers in the Philippines to increase brand loyalty and boost sales. Rather than offer the usual mix of coupons, free samples and assorted goodies, P&G cleverly chose to focus on what matters most to young mothers: their babies.

Understanding the importance of higher education in the region and the anxiety of new mothers about their toddler’s future, P&G offered participants the chance to win a free university scholarship for their child. Predictably, the campaign was an overwhelming success.

But it didn’t stop there. To create an on-going dialogue with the customer P&G launched a brilliant campaign to deliver young mothers healthcare information relevant to their own baby’s stage of development. (Moms gladly volunteered their baby’s date of birth to P&G because the value-add they received in return was so significant.)

Connect the dots, and P&G delivers more than a mobile advertising message. It delivers a public service that customers appreciate.

MMA LEARNINGS & LUFTHANSA

After the event I caught up with Paul Berney MMA Managing Director, Europe, after the event to compare notes and observations. Kudos to Paul and his team for organizing a high-caliber event that showcased key learnings and best practice from an exciting roster of global brands including Nike Turkey, Coca-Cola, BMW, Lufthansa, Proctor & Gamble, Autotrader, Deutsche Post, Pepsi, Nestlé and BBC Worldwide, to name a few.

We agreed that this event (with its impressive line-up of brands and solid focus on ROI, response rates and other key metrics) represented a welcome departure from the hype that has characterized the vast majority of mobile advertising events.

As Paul put it: There is a “groundswell of understanding” among brands and agencies that mobile is part of the marketing mix. More importantly, brands are thinking through where “mobile fits in the customer journey.”

An excellent example is Lufthansa. At the MMF Marcus Casey, Lufthansa Head of E-Commerce and Mobile, walked us through the airline’s end-to-end mobile-only service that allows people to check in, select their seats and receive a boarding pass directly to their mobile phone in only five steps. Some figures that speak volumes (literally):

•    Pageviews: approx. 1.5 million per month
•    Number of customers using the mobile boarding pass service: 90,000 per month with 60 percent email and 40 percent via SMS
•    Visits since launch: +11 percent growth month over month (steady)

Encouraged by these results Marcus said Lufthansa will focus efforts on moving its mobile service portal into a full-fledged sales channel, complete with up-to-date travel information, commerce (to book flights on the fly) and after-sales extras including baggage tracing.

The takeaway: A paradigm shift takes places when technology becomes invisible in our lives. I would argue the same holds true for truly valuable mobile advertising. When it is so firmly established in our lives, then we can conclude that the industry is out of the bowling alley and well across the chasm. (To borrow from the must-read high-tech marketing book by Geoffrey A. Moore.)

The MMF showcased many positive examples of what can happen when mobile is properly integrated in the customer journey. Brands that get this right deliver real value – and examples such as P&G open up a world of possibilities.

P&G has placed mobile at the center of an exciting value proposition that transforms adverting into educational content. Mobile isn’t another screen – it is the way mothers in the Philippines learn how to care for their babies. Put another way, the P&G brand message has become part of the how these people live their lives.

Granted, fun is still a selling point. (As Marc Mielau, BMW Head of Digital Media, pointed out: Mobile advertising value is about “saving time or killing time,” so lots of potential in campaigns that entertain us or simplify our lives.) But it may be the more common-sense campaigns (tuned into the lifestyles, life stages and personal concerns of the people they want to reach) that deliver real value and real results.

***

By way of background, Marc’s full presentation (and video) is available here. A highlight: his lessons learned at a glance.

1.    Mobile does not function in a vacuum.
2.    Mobile marketing has to deliver value. (Sound familiar?)
3.    Megaportals are helpful as distribution channels.
4.    Users want to get inspired and involved.
5.    If you cannot track it – kill it!

***
Note: I also joined with bnetTV to conduct interviews during the event with companies including Mobixell and Alcatel Lucent, video segments I will showcase on MSearchGroove over the next weeks. bnetTV has also partnered with the MMA to create a compilation DVD (of speaker presentations and exclusive interviews) you can purchase here.

Finally, I encourage companies across the mobile advertising ecosystem to contact me directly with case studies and story ideas. I have some exciting projects in the works and I’m eager to hear what YOU have to say.