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.

In the first of a series of quest columns Colm Healy – Vice President of EMEA services and General Manager of Xiam Technologies, a Qualcomm company – dissects the discovery dilemma.

Search, recommendation and discovery tools are commonplace on the web. We are used to having an intermediary between us and the content that we will eventually consume.

There are many ways in which that intermediary can appear, how we access it, and how it can go about its business, but its role is the same – to enable us to find content. Content that we are looking for; content that we might be looking for; and content that providers want us to see.

The reason that these tools exist is, quite simply, because there is too much content available to do without them. We need some service in place to help us find what we want.

The same now applies to mobile content, be it content designed specifically for mobile, or web content accessed via the mobile. The amount of content available has exploded in recent years to the point where the search, recommendation and discovery tools essential on the web are equally important in our mobile experience.

Key drivers for this explosion in content creation and availability have been led, first and foremost, by the adoption of mobile as an ever-present attachment to our lives, and, in turn, the reliance on the mobile device as a device for more than simply communications.

Evolving from this is the increasing sophistication of mobile handsets – from now so-called ‘Vanilla’ phones, to feature phones, to the emergence and unremitting growth of the smartphone category – users now have mobile handsets that are capable of processing any of the content out there on the web, including HD video. Enabled by the network developments to support increased bandwidth capacity and faster peak data rates, users are now capable of consuming almost any content through their mobile handset.

The user behaviour that this creates represents an incredible opportunity for content developers and publishers. And for the retailers that provide access to that content.

Yet the challenge for all players in the mobile ecosystem is centred on enabling users – buyers – to find the content that they want.

User Research

At Xiam, we recently commissioned TNS Global to carry out transnational – UK and US – research into the experiences of mobile content users which found clear evidence that discovery was standing in the way of a satisfactory mobile user experience. More importantly for the players in the mobile ecosystem, discovery of content is standing in the way of significant revenue opportunities, and creating a user experience that deters customers and will, ultimately, lead to increased customer churn.

The study, which began with a representative sample of 2,666 mobile content users and derived quantitative and qualitative research by focussing more closely on the most active users, revealed an enthusiastic but frustrated demand for easy to use content and applications.

A key finding of the research highlighted that content discoverability was a significant issue, with eight out of ten users reporting a problem obtaining content on their mobile handsets. When it came to finally finding the content for which they were searching, mobile Internet users were, on average, unsuccessful 27% of the time.

Users were frustrated by the time required to find the information they were searching for, and access the specific content that they wanted. Slow page loads, too many layers on websites, and too much irrelevant information are frequent annoyances for mobile content users.

Yet the opportunity presented by mobile content was reiterated by the fact that almost two-thirds (63%) of consumers surveyed indicated that they would spend more time browsing and purchase more content if it was personalized and easier to find.

How We Search

Though mobile content is a relatively new arrival on our plate of entertainment and services for consumption, users are already set in their ways, accessing the same types of content and doing so via the same search tools. Both, more often than not, an extension of their traditional, online content and search habits from their laptop or PC.

Mobile web browsers tend to use search engines (with Google the most frequently referenced), bookmarked sites or to enter URLs directly.

This reflects, very clearly, that there is no significant, regular influence on users as to the content for which they search:
• Search engines are a powerful tool for giving you specifically what you were looking for, though they are far from flawless
• Bookmarked sites are sites that the user has previously visited and had a productive experience of using
• Directly entered URLs indicate that the user knew precisely where on the mobile they wanted to go

Using the mobile network operator’s content portal is one of the less often used methods for accessing content, and was rated in our survey as least effective for finding desired content. Respondents reported that the service provider’s portal was often poorly organised, and that relevant content was not easily and directly accessible.

Those same users reported that they would increase the time and money spent on mobile web browsing if relevant content was easier to find. 59 percent said they would spend more time accessing content – translating to, on average, 65 minutes more per month. And 37 percent said they would spend more money on content purchases – translating to, on average, £5 more per month.

A further criticism of service provider portals was focusing too much on content downloads (i.e. sales) rather than on providing information and a service. Information on events and special promotions, as well as relevant recommendations based upon previous choices of the individual user would enhance the operator’s value to end users significantly.

This element – recommendation enabling discovery – is primary to any mobile content service as it cuts through the time consuming search procedure, and improves the experience of the user. The model adopted and made famous by Amazon – ‘if you liked this, you might also like this’ – is a simple and effective one. The more sophisticated this can be, the more effective the results will be.

And with the myriad different types of content and applications available, a tool to enable the discovery of content that is highly relevant but might otherwise go unnoticed can be especially valuable. Valuable to the user; valuable to the manager of the portal or store; and valuable to developers and publishers of the content, who will focus their efforts towards a provider that can enable their offering to be discovered.

One of Qualcomm’s key messages to the industry is that the mobile experience has to evolve beyond simple search and move toward personal discovery, making the user’s experience more intuitive. These results point to a huge opportunity for operators to increase mobile data usage and sales by providing personalized mobile apps, content and services.

Colm Healy is vice president of EMEA services and general manager of Xiam Technologies for Qualcomm Internet Services (QIS).  QIS helps accelerate consumer adoption and consumption of mobile content across all networks and devices by delivering a more engaging mobile experience that is contextual and relevant to consumers’ personal interests. In his current role, Healy manages all business relationship and deployments of Qualcomm’s services solutions within the EMEA region. As general manager of Xiam Technologies, a wholly owned subsidiary acquired by Qualcomm in March 2008, he continues to lead the team’s efforts in selling and deploying Xiam’s discovery and recommendations products to a worldwide network of mobile operators including Vodafone, Orange, O2, AIS and Globe.

Disclaimer: Xiam is an MSG supporter.

While the iPhone OS was the leading smartphone platform on Millenial’s network, with 33 percent of smartphone share (ahead of BlackBerry’s 31 percent), Samsung was the top device maker, thanks to the predominance of featurephones. The company also said the US mobile web audience grew to 64.8 million users, and that its ad network reached nearly 80 percent of them.

The report also features a section on mobile app analytics, provided by Mobclix, which says that the iPhone App Store is the biggest on the block, with 115,000 apps, and also leads in downloads, with 100 million per month. Android Market is a distant second, with 20 million per month, and BlackBerry App World even further back in third, delivering 300,000 downloads per month.

Millienial adds that traffic to advertisers’ sites represented almost half of the mobile campaign destinations on its network in October, while app downloads accounted for about 30 percent. Source

The bottom line: Mobile web use – and the market for mobile ads – continues to grow. But don’t overlook smartphones, which still account for a huge chunk of the mobile web market.

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THE MOTOROLA DROID SOLD 250,000 UNITS IN ITS FIRST WEEK, according to GigaOM and based on a report from mobile analytics company Flurry. The new Android device, available only on Verizon Wireless in the US, has been well received by commentators, and now, apparently, by the market as well. Flurry says that the sales are more than four times those of T-Mobile’s MyTouch 3G in its first week of sales in August, but of course pale in comparison to the 1.6 million iPhone 3GS devices sold in its first week. Source

The bottom line: Is Motorola clawing its way back from the precipice? Could be – since software has long been its Achilles heel, turning to Android could turn out to be a smart choice, and one that saves the company.

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MORE THAN 3 MILLION PEOPLE IN THE UK HAVE REDEEMED A MOBILE COUPON, says Juniper Research in a new report. The analyst firm says that mobile coupons enjoy a redemption rate six times higher than traditional paper coupons, again highlighting the viability of mobile marketing to deliver results for advertisers and brands. Source

The bottom line: Mobile coupons seem like a no-brainer, if only because people are less likely to forget to bring their phone to a shop than a paper coupon! But combined with opt-in campaigns and any number of targeting techniques, they represent a valuable resource for retailers.

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THE NUMBER OF MOBILE SOCIAL NETWORKING USERS IN LATIN AMERICA AND AFRICA WILL INCREASE TENFOLD BY 2015, says a new report from analyst firm Frost & Sullivan and mobile social networking provider Colibria. F&S says the market will amount to 527 million users and be worth $2.4 billion in six years, reflecting the increased popularity of the services, but also the prevalence of mobile as an Internet channel in emerging markets. Source

The bottom line: It’s easy to predict the growth of mobile social networks, but anybody eyeing the space has to keep in mind how people in emerging markets use their mobiles and access the internet primarily through them.

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.

The recent report on trends in location-aware apps from Apple’s App Store, Google’s Android Marketplace, and Blackberry’s App World released by Skyhook Wireless, itself a provider of a patented hybrid system of location awareness, reveals a buoyant market for LBS apps. Indeed, the Apple App Store was found to have the greatest number of location-based applications, at over 2,300, and the highest percentage of paid for location apps, at over 75 percent. 67 percent of Blackberry apps are paid, and 80 percent of Android Marketplace apps are free.

Clearly, location apps are popular, as their increasing ubiquity and popularity across a variety of app stores demonstrates. But move past the hype and the excitement generated by the flurry of activity in the space, and it becomes clear that location services – by themselves – are not game-changing.

Location-aware data is not enough

Indeed, mobile location-based services and social networking companies such as Loopt, Pelago, and Sense Networks have invested a great deal to achieve their vision, which revolves around the provision of an array of consumer and community services supported by socially-tagged, location-aware data stores. The data they have is impressive and the expansion plans they pursue are ambitious. However, they also face formidable competition from Internet giants (Google, MySpace, Facebook, and Yelp) that have already aggregated their own large sets of useful social content, and are anxious to extend their reach to mobile.

Can companies compete on location data? Many players are positioning themselves to do just this. However, I submit that location services – and the structures and systems in place to deliver them – represent little more than an incremental innovation on top of the immense stockpiles of location data and content that are largely under the control of established Web companies and heavyweights. As a result, these Web giants are well-positioned to leverage location data to mobilize their offers and ultimately dominate the marketplace. There are, however, options and strategies mobile location services companies can employ to win the game – even though, as I argue in this is column, location services on their own are far from game-changing.

Admittedly, not everyone shares my view. Sam Altman, founder of Loopt, told me in a recent interview that he strongly believes in the value of innovation in location-based services and their central position in personal mobility experiences. A prime example is the company’s iPhone app. Loopt’s Mix feature enables users -without compromising their personal privacy – to connect with other users nearby. What’s more, users can find places nearby on Yelp and find what their friends on Loopt are saying about those places.

Beyond this interesting user experience, Loopt’s location-related content is thin, and therefore isn’t terribly useful – yet. However, it’s not so much the company’s progress with their service offering that interests me as much as its business priorities.

Specifically, Loopt has correctly honed in on two features/functionalities which are fundamental to all location-based services moving forward.

1. Connecting users to each other (using location in addition to other social filtering parameters).
2. Connecting users to information (using location as an additional input to search).

The intersection between location and search on a mobile is particularly promising, and has caught the attention of location services providers including Loopt, Sense Networks (CitySense), and Pelago (Where service), as well as mobile search services providers including ChaCha, a company that connects users to a human agents trained to provide answers to their SMS text search queries and, more recently, voice-activated queries.

However, these players are all pursuing business models built around a broad but rather general vision of what location-based services are – and can be.

In their view, location can be to mobile search and social networking what PageRank currently is to Internet search. Put in this perspective, location is potentially disruptive. What’s more, the companies that control the data stores (thus the capabilities to connect users to information they require, and to each other) are positioned to rock the industry.

Location information is power, both to the companies that deliver it and the consumers, who benefit from the tremendous amount of utility it provides.

Love the restaurant where you just ate? Review it, post it online, and alert everyone (or just your friends) nearby to try the place, all while you’re waiting for the check. Want to find a good barber shop in Mountain View, California? Ask a question, direct it only to users in downtown Mountain View, and be alerted when you receive an answer from someone there. The immediacy, intimacy, relevance, and quality of such services make them very exciting for consumers.

And let’s not forget the potential for the delivery of more relevant, location-aware mobile advertising, which is the main attraction for local stores, clubs, restaurants, businesses, and organizations hoping to attract consumers to their premises.

The location tools and technologies used here to record what we do and where we are (all the while paying careful attention to personal privacy concerns) as part of our day-to-day routine provide advertisers, agencies, and mobile operators a potentially much deeper understanding of consumer habits, insights that can greatly increase the value of mobile advertising linked to location-based services. Mobile contextual advertising is already de rigueur, but location has the potential to make mobile advertising more relevant, more personalized, and thus much more effective.

But it doesn’t stop there. Adding location on top of traditional information sources we know from the Internet provides online companies with further opportunity to personalize content for their users on the move. Location can also boost the quality and value of online recommendations (where the system delivers suggestions based on an implicit understanding of user content preferences and requirements) and search (where an explicit query triggers the delivery of additional related results).

Why location-based services are an incremental innovation

Clearly, location services which connect users to each other, or information, or both have the best chances for success. However, there are several major obstacles that make this a difficult space for companies – particularly startups – to gain traction.

1. Users can resist change: Connecting users to each other and introducing them to new social networking communities could be tough, particularly if they are loyal to the communities where they are already members. The social networking space is already nearing saturation point, at least in the U.S. and the U.K.
2. User-generated content matters: Without a large data store of geotagged content, there is little value to a location-based service. Yelp and CitySearch, companies that have large data stores of reviews, listings, phone numbers, and shop information indexed by location, have the advantage here.
3. Search needs location: Developing effective mobile search will likely require heavy-duty algorithms and design (that factor location and context into the equation), and a large infrastructure to deliver.
4. Google is on an expansion course: Companies – particularly startups – face strong competition from Google. Latitude, a service that allows users to share their location with their friends on GTalk, can be read as Google’s bid for market supremacy. Is Google over-reaching? Not if we consider the company’s ability, through Latitude, to leverage legions of clusters for search to deliver more relevant information culled from a wider data set than any startup could ever stockpile. Furthermore, Google’s dominance in contextual advertising, which it is trying to extend to the mobile space, allows it to reach out to a wide network of advertisers and businesses eager to attract traffic to their sites and tap in to the potentially lucrative Long Tail of search queries. While even Google will have difficulties as it sharpens its focus on selling paid search advertising to the hyperlocal market, its brand recognition and reach may allow it to make considerable inroads and thus pose a significant threat to a broad mix of location services providers and mobile ad networks.
5. Brands need trust: Users are generally not accustomed to sharing their location data with brands and merchants. To convince consumers they trust brands with their personal information, all communications (particularly brand messages delivered via mobile marketing campaigns) will need to be permission-based and comply with the Global Code of Conduct, guidelines introduced by the Mobile Marketing Association (MMA), a global non-profit trade organization established to lead the growth of mobile marketing and its associated technologies. Put another way, brands best positioned to achieve their business objectives, and reach mainstream users instead of just early adopters, are ones that respect our privacy and have our respect. That narrows the candidates down to established big-name brands, companies that we know and trust.
6. Content without consent is spam: The avalanche of new content linked to contextual data (what we do and where) opens the door wide open to the delivery of spam and the spread of fraud. All companies have to do their utmost to attack this problem at the root. However, many startups will likely find they lack the infrastructure to keep this issue in check.

Put another way, making a mark in the location services space requires more than the ability to pick up on a user’s location. Location services require the professional and reliable interplay of systems and services enabling search, content delivery and discovery, social networking and communication, and mobile marketing and advertising. What’s more, players in this space must connect and collaborate with a complex value chain that includes advertisers, enablers, operators, consumers, and companies we have yet to identify.

Given these factors, the players that emerge dominant in this market are likely to be the names we know from the Internet: Facebook, MySpace, Google, and Yelp. Why? Because, as I have pointed out: It’s not about location; it’s about the data and the networks that power location services. Internet giants have experience, communities, content, and search. Location is just another ingredient they can add to their already successful recipe for success. Put simply, location serves as an additional input, paving the way for these companies to provide interesting new applications – applications that fundamentally leverage the assets already out there on the Web.

Smart strategies for clever newcomers

It may be a bleak picture that I paint for mobile location companies and startups; I would like to point out that I am a believer in the vision behind location based services. However, given my experience and common sense, I cannot ignore the barriers that prevent newcomers from changing the game.

But there are actions startups can take to ensure they nonetheless secure a central spot in the merging location services value chain. It may require a rethink, but the potential rewards make it well worth the effort.

I would therefore suggest startups refocus their strategy to bring more value to users, boost their competitiveness in the process. I would advise executing one of the following options:

1. Mashup: tackle the “cold start” problem and build up your data store (and follow the lead of services such as Loopt and Where) by providing content from larger Web services such as Yelp, Evite, Eventbrite, and CitySearch. It’s a great way to connect your users to valuable information immediately. What’s more, there’s an opportunity for one or two location-based “data aggregators” – companies that use information from other services and present it via a unified interface on the mobile device. (However, there is only room for a few companies in this space since the barriers to entry are low and little prevents Internet giants from entering the mobile space (on their own) themselves. Yelp and Google lead the group of Internet companies staking out their mobile territory by releasing location-aware apps for the iPhone and Android devices. A successful play in this niche would therefore require companies to outmaneuver both the mashups offered by other competitors aiming to be data aggregators and the individual siloed applications offered by the Internet companies that have the data and determination to play in mobile.
2. Killer search: It may seem unlikely, but search can be decisive and disruptive, particularly as the integration of location information will likely cause a seismic shift in how users interact with the results they receive on their mobile phone. Keep in mind that, when Google began promoting their brand of search engine, observers joked that the race had already been run and won by the likes of Lycos, HotBot, Yahoo, and AltaVista. My message: If a company makes a fundamental improvement in search by using location data, it would represent a sea-change in contextual search and shift the balance of power away from the current market leaders.
3. Big money: Location can enhance the value and effectiveness of advertising and marketing, adding a new dimension to how companies communicate their brand message to consumers. It may even be possible to use location information to provide better advertising that will appeal to users. As this recent post on MSearchGroove points out: Advertising is indeed content. Location can enable the delivery of truly compelling content. At the other end of the spectrum, we might ask ourselves if it is not possible that location could even pave the way for a whole new paradigm around the effective monetization of content and services that does not involve ad-funding. The value of receiving the right information at the right time and in the right context may be so valuable that people will pay for it.

In conclusion, a bright future awaits location services startups that think outside the box. Granted, it’s a tough market with ever tougher competition, but a strategy built on one (or all) of the options I present will help startups stand up to the Internet giants. I strongly believe location and location-based services are the future. I enjoy hearing about scrappy, ambitious startups, and their success should encourage all companies in this space to execute on the strategies I have outlined. The strategies may vary but the pay-off is clear: Companies that position themselves now to leverage the power of location will lead the way in delivering contextual relevance across mobile search, mobile advertising, and a potentially lucrative range of mobile services we cannot even imagine.

About the author:

Web: http://www.linkedin.com/in/njanewit
Nate Janewit is a search and mobile technologist and a Silicon Valley resident. His career thus far has spanned Microsoft, Google, Kosmix, Efficient Frontier, and research in Japan and at Stanford. He is an analyst of emerging technology and media and actively contributes to developments in the search and search advertising space.

The bottom line: Another reason to be optimistic about the development of the mobile advertising market in the U.S.  Forecasts that growth will be stunted in 2009 are now tempered by bullish predictions for 2010. Advances in handset penetration, the spread of ad-funded content/services schemes, and a wealth of app store offerings should result in an even greater take-up of mobile advertising.

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THE MOBILE INTERNET, MOBILE EMAIL AND MOBILE SOCIAL NETWORKING ARE USED BY MORE THAN HALF of mobile phone users. A mobile Internet poll carried out by user experience consultancy Webcredible showed that of the respondents who used the mobile Internet (52 percent), over half (55 percent) used it primarily for emailing and social networking. Source

The bottom line: We know that the growth of mobile Internet usage is linked to the youth demographic and their particular usage pattern (transferring their fixed-line Internet/PC behavior to mobile). This study provides us with some numbers to back this up.

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SMARTPHONES REPRESENT A MINORITY of U.S. mobile device purchases, accounting for 23 percent of handset sales volume in Q1, says recent data from market research firm NPD Group. Yet as a percentage of overall handset sales to consumers in the U.S. from January through July 2008, smartphones represented 19 percent of all handset purchases compared to just 9 percent for the same period in the previous year. This rise was put down to declining prices, streamlined form factors, and Internet connectivity bringing devices into the mainstream. Source

The bottom line: It’s easy (particularly if you are focused on the mobile content industry) to lose sight of the fact that smartphones, despite the hype and their urban cool factor, remain a minority in the marketplace. The percentage is rising, but there is no doubt a large and untapped market opportunity in catering to plain-old, low-end devices.

***

51 PERCENT OF U.S. SUBSCRIBERS ACCESS ENTERTAINMENT, games, news, and social information via their mobile phones every week, according to a new study published by research and consultation firm Frank N. Magid Associates. Based on a January 2009 survey of 4,000 U.S. consumers between the ages of 12 and 64, Magid says mobile content users now spend about the same amount of time with content (39 minutes) as the average user does sending text messages (38 minutes) or talking on their handset (44 minutes).

The study also suggests that mobile entertainment content like games, music, and social network services are used for longer periods of time than ‘utilitarian’ content such as news, weather and sports scores. Behaviors are split along demographic lines (as you would expect). For a whopping 80 percent of 12-34 year olds, mobile social networking is the thing to do; news consumption is dominated (79 percent) by 18-54 year olds. Source

The bottom line: Encouraging stats that outline how we use the mobile Internet and underline the role of the youth demographic. The one to watch is the richer, data-heavier mobile content consumption habits of the 12-34s.  So called ‘utilitarian’ content often leads towards instant hits – quickly check the headlines, scores, and weather – but means reduced browsing time.

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AUDIENCE TARGETING MOBILE ADVERTISING CAMPAIGNS OUTPACED demographic targeting campaigns by nearly four times in April, according to Millennial Media, which has released its April brand advertiser-focused Scorecard for Mobile Advertising Reach and Targeting (SMART). It says that this translated to major increases in purchase intent for key age groups, while the complexity of mobile ad campaigns demonstrated a lift in the number of users being driven to an established destination. Source

The bottom line: These figures underline the importance of delivering relevant mobile advertising content to a known audience with known interests, as opposed to bracketing by demographics.  While it’s a given that social networking and entertainment are consumed by a generally younger demographic, the ability to tailor advertising directly for people with specific interests – whatever their age – is critical to the success of mobile advertising.

Peggy adds: Indeed, as my close friend and colleague Tomi Ahonen – a late-40-ish, Scandinavian who is totally (!) into rap music and Formula 1 racing – has reminded me many times. No one fits the mould – and no one should. Plug that in your age demographics! An approach based on demographics is fundamentally flawed, with the difference that we will perhaps tolerate the mismatch between who we are and how brands sell to us on TV (commercials for pension schemes during the network news and ads for annoying ringtones on music television), but on mobile it’s spam. I’ll have more on the Millennial Media stats in a briefing with Paul Palmieri, president and CEO of Millennial Media.

***

BLACKBERRY APP WORLD’S LOCATION APPLICATIONS are four times more expensive than iPhone and Android location apps, according to a Skyhook Wireless Report. The study found a marked disparity in application cost between the three stores, with the average price of a location-aware application in the Blackberry App World store being $13.60, compared with $3.60 in the iTunes App Store, and $0.84 in the Android Marketplace.

The Apple App Store has the greatest number of location-based applications (over 2,300), and the highest percentage of paid LBS apps (over 75 percent). 67 percent of Blackberry apps are paid, and 80 percent of Android Marketplace apps are free.

The report found that the most popular location aware apps were for Travel, Navigation, and Social Networking, but new apps like Music, Finance, and Games were also beginning to gain traction. Source

The bottom line: These mobile application storefronts cater to slightly different markets, so they will price their products accordingly.  However, such an obvious inequality in pricing for similar applications using identical location technologies will surely persuade many prospective customers to think twice before joining the BlackBerry camp, especially when Microsoft and Palm application storefronts come online giving consumers more choice and increasing overall competition between storefronts.

***

APPLE SOLD 3.9 MILLION HANDSETS DURING the first quarter of 2009 to more than double its market share, says Gartner. Smartphone sales hit 36.4 million, representing a 12.7 percent increase from 12 months earlier. The report also says that smartphone sales represented 13.5 percent of all mobile device sales in 1Q09, compared with 11 percent in 1Q08.  It also reflects a doubling of Apple’s market share from 5.3 percent to 10.8 percent. Source

The bottom line: These statistics make Apple the third-ranked smartphone manufacturer by volume.  Although it remains in Nokia’s shadow – Nokia still commands a 41.2 percent share – it will be interesting to see how the imminent arrival of Nokia’s application storefront, the Ovi Store, and its success or otherwise, impacts on Apple’s apparently relentless growth.
Mark Hawkins is a Director of the Mobile Data Association and a freelance communications practitioner of mobile technologies.  He previously managed global communications for MX Telecom, the mobile data aggregation group.  His personal blog can be found at http://amarkhawkins.wordpress.com

The webinar dovetails well with my mobile advertising projects, including Mobile Advertising Research U.K., a research project MSG has undertaken to expertly document the state of the mobile advertising industry in the U.K., identify growth opportunities in the emerging mobile advertising marketplace, and benefit stakeholders, shareholders, and consumers worldwide.  It draws upon primary research, including in-depth interviews with 15+ mobile executives, agencies, and mobile networks, including an interview this week with Freddy Friedman, Mobixell Head of Advertising. With my MSG hat on I will also request a later briefing with Mobixell (for MSG) to discuss recent news, new customers, and the role of mobile in a multi-channel advertising strategy.

I’ve also wrapped up my contribution to a series on audio-visual presentations on mobile advertising produced by Henry Stewart Talks (HST), which will likely go live in early June. HST, a company with a 35-year tradition, provides access to world class seminars by leading thinkers and authorities from around the globe in one online resource.

The company commissioned me to summarize the findings of both volumes of my extremely popular mobile advertising white paper series (sponsored by Bango): Mobile Advertising for Newbies, which provides a how-to guide to mobile advertising and analytics; and Mobile Advertising For The Masses, which examines the market opportunity for running campaigns in a mobile social networks.

I am pleased to have the opportunity (as part of HST’s Marketing & Management series) to educate the marketplace about mobile advertising and the pivotal role of mobile analytics.

I’m also honored to join the impressive roster of mobile advertising executives and thinkers including: Harald Neidhardt, CMO, Smaato Inc.; Michael Becker, EVP of Business Development, iLoop Mobile; Gerry Christensen, CTO, Zoove; Diane Strahan, Vice President of Mobile Services, NeuStar; Chris Torbit, Vice President of Mobile Services, SmartReply; James Darcey, Senior Vice President, Single Touch Interactive; G.D. Ramkumar, Co-founder and CTO, SnapTell; Ramin Vatanparast, Senior Strategy & Business Development Manager, Nokia; Saul Kato, Founder, Qwikker; and Phyllis Reuther, CTO, Archipelago Network.

I’m especially excited to learn more about Phyllis’ new endeavor, and will keep you posted on MSG. (By way of background, Phyllis was previously CTO at Mobile Content Networks (MCN)-a company that began by providing a platform for federated mobile search and has since extended its reach to provide a combination PPC content promotion and vertical paid search program.) I also encourage you to download her talk for an expert overview of mobile search and advertising.

The individual HST presentations cover a wide variety of topics, ranging from an overview of the burgeoning mobile content market, and the barriers to success and challenges faced by content developers and owners to establish long-term customer relationships and revenue streams, to an in-depth look at the emerging practice of consumer-centric marketing, detailing the opportunities and challenges arising from its adoption.

A particularly interesting talk reviews the use of current opt-in methods – like the Common Short Code – with new mobile enabling technologies, such as Bluetooth alerts, “StarStar” (**) dialing, interactive voice response, 2-D (or QR code) image recognition, content-embedded techniques, and location-based services.

I still have the opportunity to take your views and perspectives into account, and I would welcome your input to this defining work.

If you have an interest in being considered for an interview for MobiAD World Focus, please contact me directly or send an email to my assistant Andrea Henninge (andrea@msearchgroove.com).

Disclaimer: Bango is an MSG supporter.

If you think you read wrong when you understood from today’s report in NewMediaAge (NMA) that Blyk had indeed pulled the plug on its U.K. operations, you are absolutely right. My first reaction was disbelief, and I immediately called Blyk to get the story from the source. The story is: There is no story. [SEE UPDATE BELOW]

Jonathan MacDonald – a brave voice in the mobile advertising space, who, during his time at Blyk, was instrumental in developing the company’s strategy – has summarized the facts in this post. (And I see that NMA, just minutes ago, had retracted the headline that started it all.)

Judging from the level of excitement today, the timing couldn’t be better for a serious analysis of Blyk’s partnership strategy (and an update on negotiations with mobile operators). Another important development that needs some clarification: The announcement during Mobile World Congress that Velti and Blyk have sealed a deal to launch a content portal.

The intriguing part of the release (that no doubt got lost in the trade show shuffle): “The new portal acts as a conduit for Blyk members interested in content from relevant brands or lifestyle choices; which moves away from the traditional mobile portal business model.” (Hmmm – an interesting approach that potentially addresses the frequent complaints I hear from cool content providers and app developers frustrated by the red tape and – in some cases-  re-education  necessary to sell mobile operators on their offers.)

Blyk has a mobile savvy audience of 16-24 year olds (early-adopters), and has built its business on a deep understanding of social media marketing (the models and means to play matchmaker between customers and content/apps). Against this backdrop, the Blyk’s strategy opens up some interesting opportunities and raises some even more interesting questions: To what extent is it possible to encourage discovery based on insights into customer demographics (gathered through opt-in and other means)? In what way can personalization determine the content (and advertising, as Blyk does treat advertising as another form of content) Blyk users will accept and appreciate? Does this model displace carriers, or potentially help them in the inevitable transition from mobile operator to media company?

These are just a few of the questions I will discuss this week with Antti Öhrling, Blyk co-founder and U.K. CEO. We are scheduled for a catch-up call, but I have shifted gears and plan to produce a podcast based on this important discussion.

In the meantime, I invite you to listen in to this podcast from last year, one of MSG’s most popular series. (You can find the second in the Blyk series here.)

Please always feel free to suggest companies and individuals you would like to see on MSG. I am always interested in hearing your ideas!

One you shouldn’t miss: A podcast with a company that has turned the Google model on its head. It’s all about indexing the world around us for the delivery of hyper-targeted/hyper-local advertising and content recommendations.

UPDATE: This just in from Justin Pearse, editor of New Media Age, a publication I also respect and contribute to when the opportunity arises.

From his email:

We did not say Blyk has pulled the plug on it¹s U.K. operations. Our story
said the MVNO was being discontinued. Which is the case. We have not
retracted any headline.

Our story is solid, I would not have let it run if it were not. Of course
Blyk want to deny it. The job of a journalist is to print the news companies
do not want to get out. The rest is PR.

Point taken, Justin. I will most certainly ask Antti to define what he means by “discontinued”. I also plan to raise other matters (such as redundancies in the U.K.) during my call and include the answers in my next post on Blyk.

Taptu’s approach, which takes universal search to the next level, crawling and indexing the social networking sites and destinations such as MySpace, YouTube, and Wikipedia, to expose an eclectic mix of results and content we might not have found otherwise, has been at the core of Taptu’s differentiation. But it’s the company’s latest release white paper (Touch Search: A New Vision For Mobile Search, which you can download by clicking the button in the sidebar) that signals an exciting shift in the mobile search paradigm.

The advance of touch devices changes how we browse the mobile Web and, naturally, it impacts what we expect from mobile search. What’s more, the touch Web represents a fast-growing subset of the Web, consisting of websites and Web pages that are optimized for access by touch devices like the iPhone.

However, as I point out in this earlier post, Taptu does more than acknowledge this trend; it has responded with a roadmap to encourage the innovation that content providers and brands agencies will require to deliver an optimized search and advertising experience for touch devices. I met up with Andreas Bernstrom, Taptu COO, a few weeks back to see Taptu’s prototype search service in action. Now I have the green light to post (I respect Andreas’ request not to give too much away here), so here’s a brief summary of my private demo and the details I can share.

USER EXPERIENCE: Search is dead simple and there is even the option to see and click on popular searches, cutting click distance and turning search into a recreational activity. See hot searches and share results. That’s a feature that no doubt builds on the learnings gained from 1-Tap, a feature of Taptu’s mobile search service that – true to its name- lets users share their mobile search results (including cool mobile content) in one click. To save users from typing in their friends’ details, 1-Tap can also tap into other services such as Web-based email and Twitter.

PRESENTATION: No dull lists of links or tedious trail of thumbnails. Results are displayed in a card format optimized for presentation on a touch device. I watched as Andreas not only breezed through the card results (depicting images and information in an easy-to-browse format); he could actually flip the cards over to see more details (say, the discography of a particular band or the tour dates of a group). And if you like what you see, then share it (!)  – Twitter it, post it to your personal site or just send it via email to your friends.

ADVERTISING: Advertising is indeed content, and judging from the emphasis on “cool” (and engagement), I would bet this is the business mantra at Taptu. Search ads (as we know them) still work, but the best ads are not only relevant to the keyword query; they enhance the experience. Andreas called them “engagement ads” and gave me glimpse of how this new advertising form dovetails with our content/search experience.

It’s early days, but this idea is one whose time has come. No more advertising messages and banners that annoy rather than excite. Imagine exploring advertising, using your finger to peel through its layers like an onion and immerse yourself in advertising that doesn’t seem at all like advertising. Now that’s a way to grab (and keep) my attention. “You can go into the ad and play with it.” Video, pop-ups, and a mix of content-rich cool stuff. Taptu showed it off to me, but it won’t be commercial for at least another six months. The strategy is about building an audience first and then introducing engagement ads, so watch this space!

(Here I am immediately reminded of a presentation from Tomi Ahonen, mobile luminary and author, in which he recounted why he believed Asian operators have their head around mobile – much more so than operators elsewhere. In it he quoted BJ Yang, CEO of AirCross, the number one South Korean mobile advertising company and the mobile advertising arm of mobile operator  SK Telecom,  who said mobile must be regarded as a “very close personal playground.” If that’s the attitude we need to make mobile (and mobile advertising) work, then Taptu’s approach might get us there, delivering fun (to consumers) and money (to the business ecosystem).

The demo Andreas showed me was a car ad that allowed me to move through the car and experience driving. I could sign up for test drives, see which dealers where had which models, check out related information, news, and reviews, and share the works with my friends.

Andreas and I mulled over what this could mean to viral marketing. Would the ability to share make seeding viral videos a new form of advertising. (It sure worked for Quicksilver, maker of surfing clothing whose “dynamite” video spread like wildfire with kids asking when they would ever be able see it on TV (!) People clamoring for advertising – now that’s a change…)

Would all this interactivity lead to a new monetization model? Say, pay-per-view instead of pay-per-click….

SURPRISES: From Taptu – I’ve come to expect it. This mobile search experience is full of them. I’m encouraged to explore my search results and all the content related to what I asked for in the first place. On each card, alongside the results, I have a wheel symbol that allows me to discover connections between content (some I couldn’t even imagine). I tried it out on music results, finding bands that were like my first pick and tracing their roots and the roots of each member in the band. An element of serendipity to keep content fresh and our minds active? Sorted.

So the mobile search and advertising experience are in synch for the Touch Web. But how big is the market and the opportunity?

Taptu offers this trio of industry predictions. (The methodology is explained in detail in the white paper.)

1)      Total global mobile search volume will grow rapidly from 63 million searches per day at the end of 2008 to 620 million in 2012 – almost 10 fold growth in just four years.

2)      The volume of searches from touch phones will grow even faster, to overtake the volume of searches from normal phones by the end of this year.

3)      By 2012, over 60 percent of all mobile searches will come from touch phones alone, representing less than 10 percent of the installed base of phones and just 20 percent of annual shipments.

My thanks again to Steve Ives, Taptu CEO, and Bob Last, Taptu Head of Business Development, for providing me the opportunity to contribute to the white paper.

Disclaimer: Taptu has collaborated with MSG on white paper projects.

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.

Today marks the debut of these new segments on the MSG video jukebox (located in the right-hand sidebar). This week’s focus, and feature video in the player, is my interview with Shane Lennon, Senior Vice President, Marketing & Product Development at GyPSii, a must-watch company leading in the race to deliver connected and cool experiences combining information, entertainment, social networks,  and location/navigation. In our interview we connect the dots in the recent string of announcements and discuss the significance for brands and advertisers.

By way of background, I have followed the company – which is a business unit of GeoCentric, a company that provides a geo-integration platform for mobile phones, personal navigation devices, web browsers, and Internet-connected devices, including PCs and set-top boxes – since it broke on the scene last year. Unlike many companies that focus on social networking or enable location-relevant mobile marketing, GyPSii stands out as a company that connects people to people, places, and stuff across all platforms, devices and networks.

Indeed, it’s the raft of announcements over the last weeks — including a partnership to embed GyPSii’s app on a range of LG mobile phones; the tie-up with Nokia and RIM (blackberry) to make the app available on a wide variety of their devices; and a wise decision launch an open API (allowing partners to call the shots on how they integrate GyPSii into their mobile strategy and devices) – that speaks volumes about the company’s new and stronger focus. My take: GyPSii has both the ideas and the impetus to impact our mobile lifestyles.

In addition to the interview and my analysis (below), I also encourage you to read more about GyPSii in my regular column for the bnetTV newsletter, which counts some 10,000 readers. For all my coverage and columns in one place, check out this page on the bnetTV site dedicated to MSG news and views. Thanks again to bnetTV’s Michelle and Tony Sklar for promoting MSG to their growing audience of  industry executives and professionals, and to Nicole Scott for bringing it all together in some great brainstorming sessions!

An excerpt from my weekly column:

Web 2.0 was all about the tools and technologies allowing users to freely create, share, and connect around content with members of a larger mobile community; Web 3.0 places location at the core of this exchange, empowering users to make their experiences personal, relevant, and much more compelling.

The jury is out on whether location – on its own – is a service consumers will pay for. But there is no question that location brings value to a variety of everyday mobile experiences, ranging from social networking to mobile search/shopping services,  to more relevant and engaging mobile marketing campaigns. Indeed, the race is on to offer connected and cool experiences combining information, entertainment, social networks and location/navigation. And companies that deliver products and services that connect people to places and networks, from work to play to home,  across all platforms, devices and networks, will likely lead the pack.

GyPSii stands out as a company that covers all the bases with a suite of applications that seamlessly combine location, social networking, search, and Web 2.0 technologies. I caught up with Shane Lennon, GyPSii Senior Vice President, Marketing & Product Development, during Mobile World Congress to connect the dots in the recent string of announcements and discuss the significance for brands and advertisers. We covered all the key questions, and then some. A special highlight: An explanation of GyPSii’s Open Experience API (called OEx).

Unlike other mobile social networking platforms such as Facebook, which offer a subset of desktop functionality, GyPSii has effectively given its partners the last word in how GyPSii is integrated into their devices and apps – and how much of the functionality they want in the first place. Put another way, GyPSii allows its partners to do more than location-enable/community-enable their apps and devices; it gives them control of the UI and with it the user experience they deliver to their customer base. Partners can integrate anything from a single app (create a piece of geo-tagged content) to a feature (find a friend) to full-blown social network.

By way of background, features/services include: User-Gen Content (create and share geo-tagged content); Friends (create and manage relationships with GyPSii members); Explore (find places, people and stuff nearby); Communication (keep in touch using messages, email and more); Profile (tell the community who you are and what you’re doing/feeling); and Advertising (integrating GyPSii’s location-based and contextually-tuned advertising service). To round out the offer, partners leverage GyPSii’s infrastructure to get streamline delivery of services to their customers.

As Shane put it: “We decided to have a next-generation approach to [mobile phone] client development….As we looked beyond smartphones it became clear to us that taking our user interface and jamming down into a Java enabled platform or WAP-like [platform] wasn’t going to work.” The way for this to succeed is to take a more embedded client approach, which is why GyPSii’s strategy is focused on embedding GyPSii on as many devices as possible, where the actual user experience (via the UI) is owned by the customer/partner company. (GyPSii’s platform is device and network agnostic, and works across iPhone, Symbian, BlackBerry, Windows Mobile, and Web-based operating systems.)

A big part of GyPSii plans going forward is focused on mobile advertising. And with good reason since the disconnect between mobile advertising efforts and results is a growing cause for concern. Predictably, the lack of real mobile marketing success stories reduces the enthusiasm of major brands to invest in mobile advertising in the first place. And around we go. But it’s more than a catch-22 for advertisers and carriers. It’s a vicious cycle that threatens the health of the global mobile business ecosystem if we consider that the vast majority of content companies, app store developers, and mobile carriers have already bet the farm on the uptake of mobile services increasingly subsidized by mobile advertising.

Against this backdrop, GyPSii has purposely made Advertising a central focus of its OEx API, beefing up the offer with a location-specific targeting capability and the ability to deliver an integrated advertising experience/message across devices and platforms – even  gaming consoles in the future. (Makes good sense given the perfect fit between games, location, and community…)

We wrapped up the interview with an interesting look at the future of content types and what might evolve from experiences that bring together information, entertainment, social networks, location/navigation, advertising, and search on all devices everywhere. It’s early days, but GyPSii is beginning to break down the content and comments it sees into its smallest components, allowing it to recognize the associations and relationships between the content and the context. “When someone looks for something or wants it [relevant information] in a mini-feed, we want to make sure it is relevant and [fits] in the context of their world.”

The right content to the right person at the right time and in-tune with their lifestyle/life stage? It’s a challenge. However, GyPSii has the capabilities (information, entertainment, social networks, location/navigation, advertising, and search) and mindset (open APIs and a sharp focus on the user experience) that may get us there.

A browse through Tom’s bio, and it’s clear he’s not one to follow the crowd of lemming investors who rush to the next new thing, only to drop it when the cool factor has gone cold. To the contrary, Tom is convinced early-stage startups can pay-off big if investors stick with them for the long-term. To identify the do’s and don’ts for startups in a downturn, he started off talking through the business basics, such as the best exit strategies and the opportunities for “kitchen-table startups” – as he calls them – and app developers. Tom’s answers are insightful and entertaining – all the more reason to listen in.

But the main attraction is Tom’s take on what mobile advertising really needs: Engagement. In his view, it’s all about providing and managing a one-to-one conversation between brands and people, and he’s looking for companies that “get” it. As he puts it: “There are a few agencies that appear to get it, but they und up getting slotted as a mobile agency…What you want to be is a creative advertiser [agency] that uses mobile.” Since there are so few on the horizon, the time may be right to start one yourself.

Listen to the podcast here. [19:16]

I’m smiling to myself as I write this post, since Tom’s outspoken views on engagement echo the principles of Every Single One Of Us, a venture set up by colleague and co-collaborator Jonathan MacDonald to “unite a cross-section of mobile operators, mobile companies and big-name brands to educate the market and encourage discussions about emerging business models, industry issues, and areas of growth that will help companies, stakeholders and shareholders engage with potential consumers and ultimately drive mobile advertising revenues and positive results.” Every Single One Of Us is gaining serious traction, counting over 100 supporters (aptly called Collaborators), including the CEOs of large brands and advertising agencies, mobile influencers, and citizen activists. (Disclosure: I am also a Collaborator.) In the few weeks since the launch meeting, Every Single One Of Us has achieved some exciting milestones (and formalized its relationship with MSG), developments which I am documenting in a press release as we speak for distribution next week. All good, as Jonathan would say..

Among the interview highlights:

M&A: It’s THE exit strategy. “But along the way, you should build the company as if you are absolutely going to be ready to go public.” It’s important if you want to structure your company properly, “but you can’t have a specific company as your M&A target; as you acquire a target. If you ever do that, you’ve narrowed the universe of potential buyers so extremely that I don’t think your odds for success are very high.”

GROWTH: Tom recalls the milestones he’s seen in mobile, including the expectation that mobile would reach over one million (yes million) subscribers by 2000. The fact that we are well past this shows that mobile is and continues to be the highest-growth sector there is – even in a downturn. “Anyone who’s been participating in mobile for the last 15 years and hasn’t experienced unbelievable growth has had their head under a log.”

APP OPPORTUNITIES: Thanks to iPhone and a new interest in openness among mobile operators “there’s suddenly an opportunity for entrepreneurs that have been using mobile phones in a very widespread way.” Who is likely to benefit and make a lot of money in the process? “They’re kitchen table start-ups that can make individual developers quite a bit of money, as long as they don’t sell most of their company to venture capitalists with very high expectations.”

SPONSORED APPS: Thanks to the iPhone there is a new market for what Tom calls “sponsored apps” that allow people to interact with brands in a personal way. “There are a lot of opportunities to develop these sponsored apps…and I have been investing in companies that would provide the sponsored apps, the one-to-many communications capability.”

MOBILE ADVERTISING & ENGAGEMENT: Cross-media is the key here. As Tom puts it: “I’m very interested in a number of opportunities that involve the heterogeneous mix of talents and services that’ll aim at using mobile in quite comprehensive personalization campaigns, as opposed to looking at platform plays where mobile is all that the platform looks at. I think it has to be a combination.” To be clear mobile advertising is not about technology. It’s about “individual engagement between a consumer and the brands they will grow to love as opposed to this notion of targeting.” Is this a business model or a warm-and-fuzzy concept? Tom has no illusions. Big ideas can be “baloney” but this is an idea whose time has come. Engagement is the “ultimate goal” of most brand advertisers. “If you told any large brand that you were going to offer them the opportunity to have a cost-effective personal engagement with their consumers; they would all say ‘tell me more’.”

WHERE DO WE GO FROM HERE: Tom and I enjoy a meeting of the minds near the end of the podcast when we debate engagement, and question whether we might have to start a company that “gets” it. But it’s more than fun; it’s a blueprint for change – if you’re game to transforming how you do business.

Check back for Part 2 next week, when Tom is back with valuable advice for entrepreneurs, and his pick of top trends for 2009.

To be clear: I am not blaming any one ad network. Realistically, it’s early days and we have to crawl, walk, run. However, companies with far less passion for the industry than I will no doubt soon lose patience with trial-and-error ad targeting.

(On a personal note, using referral data from a recent banner ad campaign offering a Body Mass Index calculator for free download I discovered the ad was showing up on a range of irrelevant sites focused on topics ranging from MP3s to “chat with hot girls.” My own intellectual curiosity is boundless and I believe serendipity is a must-have element in our lives (an observation proven by the fact that visitors to the hot chat site did indeed click on my BMI offer). However, are you willing to bet your ad budget on the off chance that someone interested in hot chat will click through to check if they are overweight? Fat chance (no pun intended).

No wonder targeting is the new mobile business mantra. From here on expect a new emphasis on quality and not quantity in mobile advertising. JumpTap, a mobile search and advertising company, has another one to add: Exclusivity. In the pre-holiday hectic, JumpTap took the wraps off what it calls a Premium Ad Network. In comparison to “typical ad networks,” JumpTap tells us that media buys across the JumpTap Premium Ad Network of premium mobile channels (including ten different audience segmented packages including entertainment, finance, news, reference, sports, lifestyle, social networking, travel, and games) elicits “higher engagement and a higher return on investment.” The logic at play here: Branded content sites have a greater impact on key metrics such as increased CTRs, brand awareness and purchase intent than generic mobile ad networks. Translated: Big brands draw big interest.

By way of background, JumpTap has third-party exclusives with content publishers including NBC.com, BravoTV.com, SCIFI.com, astrology.com, E! Online, Currency, Citizen Sports (Sportacular),LimeLife, ScoreMobile iPhone Edition, SportsTap, Showtimes, and Sudoku (Free). Other more recent additions to the JumpTap Premium Mobile Ad Network also include: media companies MSNBC, NBA, AOL, Ask.com, Fox News & Business, and Kargo (includes MotorTrend, Tiger Beat, Shape, US Magazine); mobile content companies Hands-On Mobile, MocoSpace, and Verve Wireless; and iPhone web and client applications including AroundMe, BlackBook, Loopt, Mobile News Network Powered by AP, Shazam, and SnapMyLife.

At the other end of the spectrum, JumpTap launched ADtap for Publishers, a solution that provides mobile publishers, media companies and iPhone application developers a means to monetize their traffic and streamline sales to brands and agencies (companies in the JumpTap Premium Mobile Ad Network). JumpTap also now provides the full outsourcing of mobile advertising operations for early-stage publishers to monetize their impressions. Partner programs allow publishers access to reciprocal remnant advertising across other member sites as a means to increase visibility and drive traffic. Finally, ADtap can integrate and manage multiple third-party ad networks for high-volume publishers seeking to backfill remnant inventory.

To round out the offer JumpTap has formally rebranded its mobile advertising engine (targeting technology JumpTap discussed with MSG here) as tapLink, a platform that builds targeting intelligence from multiple sources including search queries, browsing history, demographic and location data. Read between the lines and JumpTap has put together a capabilities mix to deliver targeted ads and drive higher yields. Relevant ads tied to content that rocks – makes sense…

But what does this shift tell us about JumpTap? Is it a mobile search company or an ad network? Is JumpTap going strong in Europe? These are some of the questions I explored in a briefing with Paran Johar, JumpTap CMO. (Thanks again to Julie Ginches at JumpTap who has a perfect track record in arranging briefings for me with JumpTap execs.)

Q: Let’s start with Denmark, where you are exclusively handling the mobile advertising inventory for 3 there. How does this impact your footprint there?

A: As you know, we’re working with 3 and we’re working with TeliaSonera. I think this is a real testament to what’s happening in the mobile operator environment. More operators are recognising that – as they reinvent themselves – they need to become more media- centric and they need to partner with companies that can empower them to make that transformation . Someone whose interests are clearly aligned with theirs and can help them develop their own mobile ad revenue streams.

Q: You’re in charge of inventory. But where does mobile search fit in here? At conferences people ask me: Is JumpTap still a search provider – so I’ll put the question to you…

A: We’ve evolved. Our core business is mobile advertising, both premium and performance. The key differentiators are our premium mobile ad network and performance marketplace both of which continue to grow globally and remember the mobile ad network could include on- or off-deck, meaning it could be publisher inventory or it could be carrier inventory .  Second is our unique targeting abilities – this is where our search heritage comes into play as keyword search and query data helps fuel more effective and targeted advertising but it goes beyond that –  by tapping numerous other information feeds. And then there’s the full array of Publisher, Advertiser and Operator solutions and services that make it easy for partners to monetize their assets.

Q: So, clearly intertwined?

A: Yes. So, with 3 Denmark, we are representing their mobile ad display inventory.  In the case of TeliaSonera, we do white label search and we monetize display advertising for them.

Q: So you both a search company and an advertising company? You’ve not left one for the other?

A: We’re trying to bring it full circle here, everyone knows about our white label search heritageWe’ve launched the Premium Mobile Ad Network, and obviously the monetization and targeting platform, tapLink, which is really the engine that helps monetise publisher’s inventory to a higher level and possesses the targeting intelligence to delivers the relevant ads. So, if you think about it, the publisher gets a higher effective CPM because now they have a much more targeted audience. The advertiser gets targeted audiences, so their dollars are being wasted less. And the user gets a better experience because they’re not being spammed with ads irrelevant to their interests.

Q: Who are your competitors now that you are evolving into an ad network?

A: We compete with Google and Yahoo. And both sit at that intersection. They both have search and advertising. Google has it with the acquisition of Double Click and certainly Yahoo has a display product. Many of our operators, many of our partners, started with search but it has evolved into a dual relationship [search and advertising]. There are the pure play generic ad networks out there but their targeting capabilities are so rudimentary, we don’t think they’ll be around for the long run.

Q: Is your value-ad the white label neutrality you bring to the table or the exclusives with content companies. Do you get more mileage out of search or advertising?

A: First, an observation about the marketplace, because it’s also evolving. It really is the most aggressive we’ve seen and we’re seeing more that operators want a white label search solution provider who can actually take their carrier data, monetize it and provide a branded experience for their customer base.  Operators can concede that business completely [to branded search providers], but they still need a platform like tapLink which sits at a totally different layer in the stack, to utilize and protect the data necessary to deliver targeted ads.  That same evolution holds for the ad display network business as well.

Back to your other question. Our business is mobile advertising.  I think what this says is that more operators are beginning to understand that they need help to reinvent themselves as a media-centric organisations, and they recognize that a carrier-friendly solution like JumpTap is critical in that reinvention.  They know and trust us from the earlier white label search partnerships and we’ve also proven our advertising solutions with some of the largest and most recognized carriers in the industry.

Q: How are you helping operators get reach?

In Denmark we’re allowing them to participate in our premium mobile ad network as opposed to some of the ad networks that just really focus on mass reach and billions and billions of impressions.  Our approach is premium content plus targeting builds relevancy which leads to user engagement.  It is really getting premium content providers. Whether that’s an operator, a publisher or an application developer, those are all forms of content. If you add that content to relevant targeting, users will engage more.  We’re the only ones out there right now really focusing on getting the content, adding on the targeting premise to build a relevancy so the consumer doesn’t get a generic ad. They get what is relevant.

Q: Are you saying you won’t show an ad if you don’t have the right ad to match a query?

A: We may choose not to show one, or we may show one the publisher chooses to show. Different publishers and operators are going to have different rules. If we don’t have a relevant ad, there might be times they [publishers] may show a house ad.

Q: Can you share some stats? Your recent press release states: “Of 2.3 billion total available monthly impressions, the JumpTap Premium Mobile Ad Network attracts more than 26 million unique users with over 450 million premium page views per month. The iPhone, which has experienced rapid growth across JumpTap’s ad network, offers over 260 million monthly premium impressions.”

A: I think the key here is really bringing together consumer interest to provide a high level of engagement in a premium content network.  We did do a study some time ago in Scandinavia which showed the increase in brand metrics of our network. In general, our click rates are above industry average. Certainly, I don’t know what our competitor click-through rates are, but we’re seeing [CTR] rates ranging from 2 – 15 percent, which is certainly high within the overall mobile advertising eco system.

Q: Why are you focused on exclusive deals with content companies in the pipeline?

A: The volume that we’re doing on the Premium Ad Network is 300 million premium page views per month. I think exclusive is very important because, if you’re a media buyer and you have four of five different ad networks selling your inventory, that just commoditizes it. Why? Because if I know that five ad networks are selling it, I’ll just call each and every one of them until I get the best price. So, we focus on exclusive relationships. In the platform I talked about [tapLink] it’s about taking input from multiple sources –  it could be search word query data, it could be browsing history, demographic information or location data –  whatever is passed to us from an operator or another publisher, to build relevancy.

NOTE: After the briefing Paran told me more exclusive deals are in the pipeline. He promised to let me in on the news early, so please check back.

Disclaimer: Maria Sanchez is an employee of Bango, an MSG supporter; JumpTap has sponsored an MSG podcast series.

At a different level, the investment is a confirmation of the increasing importance of mobile search in the scheme of things (interface to all things digital on mobile) and the central role of white-label providers in the competitive landscape. As Paran pointed out in this post, and again during our discussion: One of JumpTap’s key differentiators is its close relationship with carriers. “Whether it is demographic or location, whatever data sets they [carriers] want to pass to us enriches our targeting capabilities.”

Moving forward, Paran tells me JumpTap is putting more emphasis on the “flip-side” of this value proposition, allowing publishers and developers to monetize their inventory to a higher CPM. Expect more reach out, more education and more efforts to get the publishers in front of JumpTap’s advertisers. Smart move if we consider the interest of minority shareholder and major advertising/marketing company WPP. Leveraging JumpTap’s advertisers is a natural next step and the recent Pinch deal (covered here) is just the start.

How is this going to come together to help publishers monetize their inventory to a higher level? Dan walked me through an example of contextual targeting on ESPN. A sports content channel, so sports-related advertising is a perfect fit, right? Wrong.

“We’ve based our solution on search technology. We don’t rely only on the tags on the publisher side. When we place an ad on ESPN, we know it’s ESPN, but we also know it’s in the NHL section. We know this is the Bruin’s page, and we know which specific player the users [viewing the content] is interested in. We know if he’s interested in the scores or in last season’s stories. Now, how we do it? We can do this because our search technology includes crawlers and spiders, and we actually read the page that this individual is looking at and distill keywords out of that, as opposed to other ad networks that just rely on the fact that this is a sports site.”

Below are some excerpts of my conversation with Dan and Paran. You might also want to check out this post at MoCoNews, where Tricia Duryee reports on her catch-up call with Paran.

INVENTORY: JumpTap’s mobile ad network is focused on premium content. By not swamping the networks with general inventory, JumpTap aims to maintain quality and high CPMs. “Our strategic direction is to focus on premium providers of content, and to target users against that content to build relevancy….The second component of what we do is to address the Long Tail, and we will be developing a series of tools to work with the smaller publishers so they can take advantage of our targeting abilities.”

TARGETING: Dan tells me the funding announcement will allow JumpTap to “continue to innovate and build more sophisticated targeting than [what] we do today and what we do today is way ahead of the rest of the market.” At the same time, JumpTap will aim to introduce “not only the sophisticated targeting, but actually offer a more simplistic targeting because that’s what the market is ready for.” JumpTap will therefore seek a balance between precision and reach. “You need to tone down your ability to target for the sake of scale. Otherwise, you’re doing a great job of slicing your traffic and end up with a group of ten people.”

MOBILE OPERATOR OPTIONS: In Dan’s view, operators can choose one of three paths. They can cut a deal with a branded search provider (Google, Yahoo, Microsoft). “It doesn’t mean they [carriers] will necessarily end up a dumb pipe, but it does mean they need to become much more proactive on other fronts to create the shareholder value upside they need [in the long term].” Put another way, giving in to Google & Co. is a short-term strategy with short-term rewards. “Carriers are realizing that, no matter how big the check can be, it’s [a deal with a branded search provider] actually a Trojan horse.” (A great time to listen in to the sponsored podcast featured in the box on the right-hand side of the site. Vendor spin aside (it is sponsored), it does a great job of outlining JumpTap’s Trojan horse argument and what is likely at stake if operators choose that option.)

The second path is somewhere in the middle, where operators use branded search but “use JumpTap as a buffer in between” to manage, develop and leverage their customer data, rather than share it with Google, Yahoo, Microsoft. The third path, one less followed, is about operators “re-inventing [their] business to become much more of a media company, utilizing us not only to manage their customer data and the targeting parameters, but [implementing] our white-label search technology, made for mobile, to monetize it.”

VERIZON-GOOGLE: No word on the likely impact or outcome. (JumpTap’s operator customer Alltel has been acquired by Verizon, and there’s a question mark over JumpTap’s role if Verizon ties up with Google for mobile search.) Dan and Paran honed in on the role of customer data in the deal (negotiations over how much information Google can retain about Verizon’s customers and their searches appear to be a thorny issue in the Verizon-Google talks), using it as a springboard to discuss analytics. As Paran observed: “Operators are beginning to understand that their customer data is one of their most precious commodities.” Indeed, carriers are just starting to level their data to enrich the search experience. “And when that happens on a wide scale, you’re going to see the game change drastically.”

My take: A funding deal that underlines the pivotal role of white-label (an attractive option for search and search monetization through advertising). More importantly, it confirms JumpTap’s ambitions to lead the pack by leveraging its search technology and advertisers to monetize inventory at a higher level. Mobile search may not be broken after all; it has simply stalled while operators get their head around their options and how best to leverage the real power of the customer data they wield. JumpTap provides a valuable blueprint to follow.

(The next post, co-written with Peggy Albright, will share some insights from a series of briefings with JumpTap on key mobile search trends .)

Disclaimer: JumpTap is an MSG supporter.