Mobile: Hype oder Trend?

Nach längerer Zeit war ich heute, auf Einladung von Reinhard Höntsch, wieder auf einer Veranstaltung der Erfahrungsaustauschgruppe “TIMES” bei der SIHK zu Hagen. Der Nachmittag wurden dem Thema “Mobile Advertising/Mobile Commerce” gewidmet, von Annette Eschment moderiert und in Zusammenarbeit mit dem ECC Handel organisiert. Aline Eckstein, Projektmanagerin im E-Commerce-Center Handel in Köln, präsentierte in Ihrem Vortrag “Mobile: Hype oder Trend?” zuerst einige beindruckende Zahlen zur Entwicklung im Mobilfunkbereich. Anschließend zeigte sie Unterschiede zwischen PC- und Smartphone-Usern anhand von den drei Gruppen “Digital Natives”, “Digital Immigrants” und “Silver Surfer” auf. Gefallen hat mir vor allem das Fazit “Smart-User sind männlich, gebildet, zwischen 30 und 40 Jahren und besserverdienend” der vorgestellten Studie ;o)

Im zweiten Teil des Vortrages ging Aline Eckstein zum einen auf verschiedene Elemente des Mobile Commerce und zum anderen auf die Erwartungen der Endverbraucher an Mobile Werbung ein. Die anschließende Diskussion fokussierte allerdings mehr auf den allgemeinen Umgang von Unternehmen einerseits und Endverbraucher anderseits mit Mobilen Technologien und Social Media.

InMobi – a fast growing Mobile Ad Networks

Today we welcome the InMobi team in our headquarters, one of the several global mobile ad networks we work with to monetize our mobile site traffic. We work together with InMobi since the beginning of this year, but now we had the chance to review our cooperation in more detail in a face to face meeting. In the evening we went together with Naveen Tewari and Amit Gupta to the Mosquito Essence Cocktail Bar for some food and drinks :o)

Update: mKhoj rebranded into InMobi

The Mobile Advertising Ecosystem

There are several business models for Mobile Social Networks (MSN). Asking users to pay for either community membership or for premium content like virtual goods are two examples. Lately, a few players have been experimenting with different premium models. Nevertheless, it seems to me that our market segment still favours the advertising-based business model.

When thinking about whom to choose as a partner I drew the diagram you see above to visualise which partners and options MSN currently have. In my view mobile social networks now have four different groups of potential advertising partners. In more detail, if you consider the various possible combinations for cooperations between partners, the money we look at can go through 7 different ways through the value chain) as the diagram illustrates. These four groups of partners are:

• Mobile Content / Service Provider
  A direct cooperation with mobile content and service provider can bring higher rates of the effective cost per mille (eCPM) for the social network’s inventory. On the other hand the cooperation requires a a higher sales effort from the MSN. To reach a 100% fill rate (defined here as ads shown by content partner/inventory offered by MSN) your inventory a MSN needs many business partners to gain enough advertising deals. It also takes a high technical integration effort and a lot time to manage the relationships with these partners. One well-known mobile content provider is e.g. Fox Mobile Group (Jamba/Jamster).
   
• Mobile Advertising Agency
  Mobile advertising agencies often work for several big brands and manage cross media advertising campaigns for them. Typically agencies wish to target a very specific audience for a very large MSN inventory volume within a certain period of time. For a MSN these specific types of demands are often difficult to serve properly. Two of such mobile advertising agencies are pi2006.es and glispa.de.
   
• Mobile Advertising Networks
  Mobile advertising networks pool different kinds of mobile players. They have elaborated ways how they can fulfill the specific needs of advertisers and help publishers to convert their inventory into revenues. From the point of view of a MSN their specific disadvantage is that MSN can not directly choose who advertises on on their site. Indirectly they can choose to put to put specific advertisers on “blacklists”. Examples of two such marketplaces are admob.com and adinfuse.com.
   
• Mobile Advertising Optimisers
  Mobile advertising optimisers offer a very tempting comprehensive monetization solution for MSNs. However, they represent a new branch of business in the mobile industry. If one is to believe them MSN can easily manage all their business cooperations and maximize the monetization of their inventory. On the other hand they represent a new part of the value chain which wants a bite from the revenue pie. Nexage.com and smaato.de are among those new players.

It should be mentioned that there is a even more complexity in the value chain. For example some mobile social networks like buzzcity.com offer their own mobile advertising networks. And you also can’t preclude that the mobile advertising optimisers integrate each other. So how does one choose as a mobile social network the right part of this value chain to work with? We don’t really know yet who in the value chain will survive in the long term because the mobile advertising business is still young. We know mobile advertising networks since 2006 (admob.com started in 2006) and mobile advertising optimisers since last year (smaato.de started with SOMA in 2008). Google introduced Adsense for mobile search just the other day. I am sure that we will also see another big movement in the industry when the first mobile ads appear on Facebook Mobile and MySpace Mobile‘s efforts increase in this regard. Facebook has got no ads yet, but just imagine the additional amount of mobile advertising inventory from ‘20 Million Users Now Accessing Facebook Through Mobile Platforms‘.

To me as MSN one must broadly consider of a trade-off between money (content providers, agencies) vs security (optimizers). The best business option for a mobile social network depends much on which strategy in general they pursue. If you go for the big money, you go directly to the content / service providers or/and advertising agency and accept the high business efforts and the risk depending on few big customers. If you aim for more secureness and less work, but at the worst also less money for your inventory, than you go for the mobile advertising marketplaces and optimizers.
 
But at the end, how to chose the right business partners for the corresponding cooperation? For an informed decision you need some criteria; I can think of a set of 14 criteria to bear in mind when selecting one. Firstly we can have a look on basic facts about the potential business friends like company age, references, team and investors. Some operating figures like the market coverage, achieved average fill rate and achieved average eCPM are also of interest. Than we should consider the business aspects like revenue share, contract duration, contractual specials and payment target / reliability. And of course don’t forget the technical issues like integration efforts, performance / scalability and support quality. But at the end it’s all about individual experience with specific business partners, because mostly you have to deal with young players in our turbulent industrial sector.
 
For peperonity.com we have found our strategy and good business partners. Understandably I can’t tell you the details, but I am open for discussion about the mobile advertising ecosystem from the perspective of MSN or a publisher in general. Our mobile industry is just vibrant and full of surprises :o)

(Note: This is my contribution for the ‘FACTS OF THE WEEK NO 1′ at www.mobile-facts.com)

Finalist for Smaato Mobile Advertising Award 

Today we got an email from Smaato: Congratulations! You are a finalist of the Smaato Mobile Advertising Award 2008! 108 companies participated to win this Award and now there are 11 finalists left (in alphabetical order): aka-aki, Buzzd, DialPlus, FISHLABS, Fring, FunkySexyCool, Peperoni, Qeep (by Blue Lion mobile), Skout, Tourspot and Vayyoo. Not only Smaato, but also we are very excited to find out who will win this competition next week :o)

Source: Richard Maven: Q&A – AdMob’s Russell Buckley on mobile advertising, e-consultancy.com, 03.04.2007

Today Thomas found a interesting interview of Richard Maven with Russell Buckley on e-consultancy.com. Russell also told a little bite about peperonity.com: 

[...]

Do consumers really want to see ads on their mobiles, given that they have to pay for most mobile services?

There’s two aspects to this. Firstly, many people do find the ads useful, otherwise they wouldn’t be clicking on them. Our theory is that people are using advertising to discover new content and services they otherwise wouldn’t have found.

Secondly, most people accept advertising if the price is that they get cheaper, or free services and content in return. As an example, out of the 1.6bn ads we’ve served now, we have had only one complaint. In this case, a lady had created her own mobile home page on peperonity, one of our publishing partners and wanted to know why we were running ads on “her” pages.

When we explained that the reason why peperonity’s service was free was that it was funded by advertising, she actually turned out to be very supportive.

So while many are paying for mobile services today, most people are happy to see ads if they can get cheaper services in the future. And that’s the way the market seems to be going.

[...]