comviva wp future of advertising june09

The Future of Advertising is Happening Now

Comviva White Paper

June 2009

i

Contents 1 Executive Summary ........................................................................................................ 1

2 The End of Mass Advertising ........................................................................................ 2

3 Era of Engagement ......................................................................................................... 7

3.1. Interactivity .................................................................................................................... 7

3.2. Personalization ............................................................................................................. 9

3.3. Cost Effectiveness ...................................................................................................... 10

4 Mobile Advertising Opportunity .................................................................................. 12

5 Building the Ad Network .............................................................................................. 15

5.1. Multi-Channel Capability ............................................................................................. 16

5.2. Customer Intelligence ................................................................................................. 17

5.3. Response Measurement ............................................................................................ 17

5.4. Managed Services Model ........................................................................................... 18

6 Conclusion .................................................................................................................... 20

7 Appendix 1: Mobile Ad Inventory ................................................................................ 21

Future of Advertising

© Comviva Technologies Ltd 1

1 Executive Summary Globally, media consumption patterns are rapidly evolving in favor of the digital medium, with

consumers increasingly spending many hours a day communicating, collaborating and chatting online.

Nielsen AC in Global Faces and Networked Places claims the total amount spent online by users

globally increased by 18% between December 2007 and December 2008. Given the growing

engagement quotient with the medium, blue chip brands are steadily rebalancing the overall media

marketing mix - directing more money and more attention to digital media. Specifically, they are scaling

up once-tentative experiments in consumer-created content, social networking, and interactive media to

engender effective consumer connections. ZenithOptimedia1 predicts the Internet‘s share of total

advertising spend will maintain a steady upward trend, growing from 10% in 2008 to over 15% in 2011,

equating to USD84.15 million in revenues globally.

With 4 billion mobile users globally, rapid advances in wireless technology have made mobile devices

the next frontier in digital advertising. The always on, personal, portable and actionable qualities of

mobile as a marketing platform enable brands to construct meaningful, interactive exchanges between

the consumer and the brand. A large majority of customers use their phone for at least one data service,

including text messaging, games, email, mobile Internet, instant messaging, ringback tones and video

downloads, indicative of a broad range of advertising inventory and a scalable market for mobile

advertising. For operators, advertisement-driven business models complement the subscription model,

offering an incremental revenue stream, as well as an opportunity to promote services uptake. In its

report, Mobile Content and Services 7th Edition Informa forecasts mobile advertising revenues will

register 47.7% compounded annual growth between 2008 and 2013, generating USD 12.1 billion in

revenues.

Advertiser investment in the medium, however, has failed to keep pace with the rapid growth of mobile

media. The digital revolution, with its global access and user empowerment, comes with tremendous

strategic uncertainty. Operators, as well as advertisers, need to overcome several consumer and

business related impediments to realize the opportunity. The personalized nature of the mobile

environment means operators need to resolve issues around consumer privacy and usage of customer

personal data for targeted advertising. Further, the unfolding opportunity has attracted a range of

players including established brands such as Yahoo and Google, as well as a number of start-ups,

resulting in a complex mobile ecosystem and a range of evolving business models. For operators

already contending with growing consumer interest in off-deck content and services, players offering

marketers a viable direct path to end-users is a distinct reality. While it is too early to predict the players

and the business models, which are likely to survive in the long-term, it is crucial for operators to act

quickly to consolidate their position in the value chain and capture a share of advertising dollars. To

adapt and succeed – operators must build a new set of capabilities now - incorporating cross-platform

innovation, greater insights, open collaboration and digital processes. This paper focuses on specific

strategies that operators must adopt to develop a successful ad network.

1 ZenithOptimedia is a media services market data provider focussed on advertising expenditure forecasts



2 The End of Mass Advertising Globally, the media landscape has evolved into a complex and dynamic conglomeration of both

traditional and interactive media that seek to serve the needs of today's fast-paced consumer lifestyles.

The proliferation in channels, brands and screens signals a rapid evolution in media consumption

patterns and an end to absolute domination by a single medium. Patterns of media consumption are

also rapidly evolving. There has been an explosive increase in the amount of multitasking amongst

consumers – which has generated the term 'perpetual partial attention‘. People who watch television

are also instant messaging with a friend or they‘re going online to understand various points of view

about the story and maybe to view alternative photographs from a citizen journalist. 'We are reaching a

critical threshold where new digital channels have equal or greater impact than conventional linear

media such as TV. Studies from several countries show that consumers spend a significant amount of

time on digital mediums to source information and entertainment as well as to communicate,

collaborate, and engage in a variety of social interactions. Nielsen AC in Global Faces and Networked

Places March 2009 claims the total amount spent online by users increased by 18% between December

2007 and December 2008. Likewise, Synovate Research‘s 2008 Young Asians Survey indicates Asian

youth spend 4.8 hours a day on the Internet, the maximum time dedicated to any media.

Share of Weekly Time Spent on Media

Source: Synovate Research2

The proliferation of media (from yesterday‘s print, radio, and TV to today‘s Web, cell phones, podcasts,

GPS systems, video games, PDAs, and more) and the concurrent fragmentation of audiences is

transforming the dynamics of the advertising industry. Old structures and ways of working persist but

are fundamentally challenged by newer, more dynamic, more innovative alternatives. Traditionally,

advertising is defined as "a form of controlled communication that attempts to persuade consumers and

shapes purchase behavior, through use of a variety of strategies and appeals, to buy or use a particular

product or service‖. However, it is becoming abundantly clear that although the central goal of

advertising is still the same - to persuade consumers to purchase a product or service - the media

environment in which advertising is placed is changing, and, as a result, the nature of advertising is

changing as well. Primarily, advertisers will have to reengineer core approaches and adopt new

2 ―Synovate Young Asians Survey 2007‖. Sample size - 11,886 8-14 year-old respondents across 10 Asian markets.

33%

26%

17%

7%7%

5% 5%

Share of Weekly Time Spent on Media - Europe

Internet Television Radio

Cinema Video games Newspapers

Magazines

37%

34%

9%

9%

11%

Share of Daily Time Spent on Media - Asia

Internet Television Newspapers

Magazines Radio



mediums and formats which offer more intrinsic value to consumers to capture a meaningful share of

audience attention.

Why Companies Advertise

A marketer‘s-eye-view of a successful ad campaign as it moves from awareness, through increased interest, all the way to regular and consistent purchase. At each step, the marketer seeks a way to move the product deeper into the funnel.

Source: Booz Allen Hamilton 3

The power of a

medium in

reaching out to

customers and

strengthening

the relationship

between the

brand and the

consumer is of

central

importance to

marketers.

Previously,

advertisers could

construct a

consumer

archetype and

push information

about their brand

via a 30-second

commercial with

reasonable

certainty that it would reach 80% of adults. This traditional one-to-many advertising model loses its

effectiveness when choices are infinite and audiences diffuse.


Evolving Media Environment

Source: IBM



As users migrate to new screens for content and information, advertising and marketing need to shift as

well. It is more important than ever to reach consumers where they want, when they want and how they

want. Accordingly, brands are rebalancing the marketing channel mix. Specifically, they are optimizing

the brand‘s digital footprint and directing attention, as well as budgets, to digital media. Toyota, for

instance, recently spent USD4 million on a dedicated YouTube channel for its 2009 Corolla sedan

campaign. To drive consumption, brands such as Coca-Cola and Burger King have launched interactive

branded online applications for consumers, including games and virtual chat rooms. These are not

standalone cases; the impact is becoming evident in every consumer sector, from apparel to household

goods to food to automobiles to appliances — and in business-to-business marketing as well. Digital

channels now constitute a sizeable share of the media mix for several brands, which is reflected in the

narrowing gap in advertising spends between broadcast and digital media. Zenith Optimedia4 estimates

that the Internet‘s share of global advertising spend will grow from 10% in 2008 to over 15% in 2011,

translating into USD84.15 million in global revenues.

Share of Global Advertising Spend by Medium

Source: Zenith Optimedia

However, connecting with digital

consumers is not simply a matter of

altering the channel mix and bolting on

banner advertisements against a few

likely web sites to see what sticks.

New age marketing requires a

completely new set of formats to

connect with customers.

For decades, users have lived in a

world of professionally produced

content delivered on closed

distribution platforms to dedicated

devices. Broadcast television is the

classic example. Historically,

advertising shares the same

qualitative characteristic as the media

that carries it, a one-way street, which

4 ZenithOptimedia is a media services market data provider focussed on advertising expenditure forecasts.

0

10

20

30

40

50

% S

hare

of

Glo

bal A

d-

Sp

en

d

Share of Worldwide Ad Spend by Medium

2007 2008 2009 2010 2011

Digital Content Interaction

Source: IBM



consumers lean-back and view passively, allowing the media experience to wash over them.

Media proliferation and fragmentation in consumption patterns, however, dampen the effectiveness of

traditional linear advertising formats that rely on centrally scheduled programs to deliver undifferentiated

advertising to a mass audience. In responding to this challenge much advertising has become more

colorful, more vibrant, bigger, faster-paced, louder, and more "in your face‖. In fact, the ―quiet‖ ad stands

out from the others because it is so rare. While the aggressive, ―more is better" approach may succeed

in the short run, it is likely to fail in the long term as consumers habituate to the new style and learn to

ignore even the most aggressive messages. Where advertising was once a desirable form of

information — there is now such an enormous amount of information available ―on demand‖ that

traditional advertising can prove an annoyance, given that it is one-sided, questionable, and provided at

the wrong time. The Daniel Yankelovich Group estimates an average citizen, who lives in a city,

encounters 5,000 advertising messages a day. That translates to an exposure rate of more than 3

adverts per minute and represents a significant increase from the estimated 2,000 advertisements the

same person would have seen during a day in the mid-1970s, when advertising focused on network TV,

magazines, newspapers, and radio. Consequently, it is much harder for on-brand executions to break

out of the clutter and create an impact.

The act of consuming media

online has become

synonymous with the act of

producing media. Content and

formats once controlled by

media broadcasters and

distributors are moving toward

an open market for delivery

systems. Digital channels are

lean forward mediums,

allowing users to prosume

(simultaneously consume and

produce) content. In a multi-

screen, media-rich world,

consumers can no longer be

considered ‗the audience‖ —

they increasingly control the

media experience and are

simultaneously readers,

editors, marketers, media

producers, programmers, and

distributors. Taking advantage

of rising customer

individualism, firms are offering customers online tools allowing modification, customization or even the

design of company products. Pepsi recently invited fans to design their soft drink cans in the ―Design

Our Pepsi Can‖ contest (www.designourpepsican.com), with the best idea adopted as the new look of

the product in regular intervals.

Interactivity and electronic publishing have democratized information, transforming the advert into one

input to a conversation that consumers conduct 24/7 in digital forums or blogs or on social networking

media. As a result, marketing is less about pushing messages to customers and more about listening,

facilitating and co-creating messages. Brands need to recognize there is a conversation going on in the

marketplace that they should join, not dominate. (View How Companies are Changing the AdPlaybook).

By participating, companies become actively involved in the relationship, creating new opportunities,

correcting misinformation, offering insights, developing a reputation, and potentially building a long-term

relationship with the most influential people in a given market.


Worldwide Top 10 Social Media Sites

Source: Comscore Source: Always on Media 5

http://www.designourpepsican.com/



How Companies Changed the AD Playbook

SINCE THE LATE 1980S, three little words and an iconic logo defined one of the world‘s most successful brands. The words were: ―Just Do It.‖ The logo was the famous Nike swoosh. Together they conveyed a competitive spirit and gritty brand image that gave consumers a memorable point of differentiation in a marketplace cluttered with seemingly similar products.

Gone are the days of ‗one shoe, one advertising campaign. Over the last few years, Nike has been steadily increasing the role of digital media in its marketing mix. For example, in advance of the 2006 World Cup tournament, Nike teamed up with Google to launch an online social community targeting soccer fans and athletes. It was precisely the kind of interactive and viral media environment that spoke directly to the consumers with whom Nike most wanted to build relationships, with a precision and intimacy not available in television or print ads. Christened joga.com, the site recorded more than 110 million downloads of soccer-related information and media clips.

Joga.com was just one of several innovative initiatives that transformed Nike‘s marketing and advertising prowess. Another was developed around Nike+, a joint venture between Nike and Apple that allows iPod users to monitor their workouts using a sensor in their Nike footwear, tracking their calorie-burning and heart rates in real time and online. In partnership with R/GA, a division of the Interpublic Group, Nike and Apple created nikeplus.com, an experiential, Web-based service that offers much more than just eye-catching advertising. On nikeplus.com, consumers could post their workout results, share favourite running routes, compare their efforts to those of professional athletes, such as Lance Armstrong and LeBron James, and even download music mixed specifically to inspire and motivate.

Nike+ effectively hit all of Nike‘s objectives: it was high on relevance; it was engineered for interactivity and community; and it was scalable, appealing to both serious runners and novices.

PFIZER, the pharmaceutical giant, announced in September 2007 that it had partnered with Sermo.com, the fastest-growing social networking site for doctors. Sermo.com, endorsed by the American Medical Association, offers doctors the ability to network with colleagues to discuss medical cases and/or problems. At the time of the announcement, 30,000 doctors in the U.S. frequented Sermo.com and an additional 2,000 doctors were joining each week. (Sermo.com expects to open its site to non-U.S. doctors this year.) Sermo.com prohibits any advertisements on its site, but Pfizer management sees collaboration with Sermo.com as a way of lowering costs and reducing inefficiencies in its relationships with doctors. Everyone benefits: Members of the site get to partake in an interactive online social community, within which they have the opportunity to publish and receive feedback on numerous medical issues. For Pfizer, the site serves as an efficient way of letting doctors obtain information on its drugs, improving relations with the medical community, and getting assessments from physicians on its clinical trials. Furthermore, Pfizer sees Sermo.com as a way to reignite growth within the company and prepare itself for changes in the drug market.

Other major pharmaceutical companies have taken note of Sermo.com's success and many are expected to create their own physician social networking sites.

Source: Always on Media 6

The need for advertising forms to continue to evolve with new commercial media channels and

platforms is clear. However, the future of advertising does not revolve around a divorce from traditional

mediums to live in a digital world. We believe the advertising industry will have to address a bifurcated

market of avant-garde, fashion-forward consumers as well as the large traditional segment. These vastly

different markets mean companies need to adopt a dual strategy, focusing on traditional and emerging

digital business to reach audiences effectively. However, participation in the future of marketing and

advertising is not optional; it is mandatory. This paper focuses on the ways in which players in the

advertising ecosystem can leverage mobile as a medium, which will enable marketers to fashion new

kinds of advertising and marketing for a new ―always-on‖ era—anchored firmly in interactivity, relevance

and measurability.




3 Era of Engagement Consumer interaction is of central importance to the culture and economies of new pervasive media and

defines the future of marketing. To succeed, agencies must rethink content, move away from "show and

tell" advertising and adapt new interactivity models, enabling consumers to participate in the persuasion

process by allowing them to select the content, timing and communication act as well as respond to the

advertising message.

Until now, the online medium has dominated interactive advertising. In most emerging countries,

however, consumer adoption of digital mobile telecommunications outpaces the Internet. With 4 billion

users globally, rapid advances in wireless technology have made mobile devices the next frontier in

mobile advertising. The always on, personal, portable and actionable qualities of mobile as a marketing

platform enable brands to construct meaningful, interactive exchanges between the consumer and the

brand. A large majority of customers use their phone for at least one data service, including text

messaging, games, email, mobile Internet, instant messaging, ringback tones and video downloads -

indicative of a broad range of advertising inventory and a scalable market for mobile advertising.

Compared to other channels, the mobile medium offers advertisers the following distinct benefits to

reach consumers.

3.1. Interactivity

Interactivity is a complex and multi-dimensional concept and there is little industry agreement on its

associate conceptual and operational definitions. McMillan (2002) proposed concepts of interactivity

could be subdivided into three primary research traditions: user- to-user, user-to-message and user-to-

system interactions. McMillan emphasizes multiple forms of interactivity and suggests researchers in

this area should locate their work within one or more of these three traditions and draw upon the

literature specific to that tradition.

Changing Consumer Behaviour and its Impact on the Advertising Value Chain

Source: IBM



User-Message Interactivity

From an advertising perspective, user-message interactivity refers to the degree to which a person

actively engages in the advertising process by interacting with the advertising message. Interactive

creativity recognizes that people are inherently social and look to create and maintain relations not only

with other people but also with brands. All advertising is interactive to the extent it generally seeks to

affect human behavior, attitudes, or dispositions. Conventional media environments generally do not

have embedded return paths but that does not mean they are devoid of interactivity. It means that

conversational interaction is generated through other feedback systems, for example, consumer,

market, and audience research.

The interactivity offered by mobile phones embedded with real time response mechanism is potentially

greater than any other advertising medium. In an interactive advertisement campaign, the user

responds to an advertisement via an SMS or a WARP click. For example, when presented with an

interactive advert, users can respond (i.e., request more information, enter a contest, add comments)

using text, voice, or instant messaging, social networking, or a WARP click. Embedded interactive

mechanisms trigger one-to-one conversation between the user and the brands, enable advertisers to cut

out the noise, successfully capture consumer attention for the duration of the interaction and result in a

marked improvement in the marketer‘s ability to promote brand awareness and purchase consideration.

User-User Interactivity

User-to -User interactivity recognizes the increasing centrality of the producer and the consumer in the

business of new media. Vast new opportunities for enhancing conversational engagement with

consumers, and between consumers, open up as marketers augment and adapt their activities in line

with the medium‘s capabilities. We look at two models of use-to-user interactivity

User-Generated Content: The availability of low

cost tools allowing new creative input from consumers,

semi-professionals, amateurs and nontraditional players

is adding a new dimension to interactive advertising.

Inexpensive video and photo-editing tools create

opportunities for hobby tribes and individual users to

self-produce and repurpose advertising – a form of

creative populism. Brands are increasingly collaborating

directly with advertisers to create a participatory culture

and develop products as well as innovative and

strategic marketing campaigns that go beyond the

traditional advertising formats.

Electronic Word of Mouth: This digital

phenomenon relates to how customers use social

networking platforms to share with peers their

preferences, experiences and recommendations about

brands, products and recent purchases in a manner

that is more authentic and compelling than traditional

marketing and messaging vehicles. Electronic word of

mouth (eWOM) refers to "oral, person to person

communication between a receiver and a communicator

whom the receiver perceives as non-commercial,

concerning a brand, a product or a service.‖ Although

UGC is closely aligned and often confused with eWOM,

the two differ depending on whether the content is

generated by users or the content is conveyed by

users. For example, video blogs produced and posted

by users is UGC. However, a mobile user who sends

ROI on Mobile Advertising Campaigns

Knorr Foods, a subsidiary of Ajinomoto Inc., has tried to involve younger female consumers in the

development of a new Soup Pasta. In 2007, Knorr was in the midst of developing a new Soup Pasta to target the primary gourmets of noodle cuisine: younger, female consumers. Bringing a new product to market is not an easy task, but in this case, the hardest question was how to develop a Soup Pasta that fit the target segment's taste preferences. To generate and commercialize the product successfully, the company needed frank and honest opinions from young, female consumers during the idea generation, idea screening, concept development, product design, and detail engineering phases. To this end, Knorr decided to tie its new product development project to the Tokyo Girls Collection.

Knorr created a mobile campaign site, on which star model members maintain their blogs and report their participation in the product development process. The discussion threads serve as input for the idea generation and screening. Through this project, Knorr developed a new Soup Pasta that embodies the key attributes identified in the mobile blogs. The new product was introduced at the following year's TGC venue, during which sampling took place through catering trailers.

Source: Interactive Advertising Journal; Mobile Finds Girls' Taste: Knorr's New Product

Development



her friends a link to a moblog is engaging in eWOM. If the content conveyed has been generated by the

users, it can be both UGC and eWOM. Thus, though UGC and eWOM are distinct concepts, they are

related; to be successful, eWOM depends on the dissemination of content, and UGC has less influence

without eWOM.

Properly managed eWOM has a significant influence on consumers' decision-making processes,

especially when they look for inform action about products, brands, or services. Research shows that

word-of-mouth (WOM) communication plays a more important role than market-generated information,

such as advertising or personal selling, in influencing consumer behaviors as consumers perceive

WOM as more trustworthy, which may lead to greater.

The mobile medium offering constant connectivity allows innovative advertising formats, which

enable users to share brand experiences. Further advertisers can draft influencers to advocate the

brand message. Participation, remediation, collective intelligence, allow many more stories to be told,

and enable users to become much more involved with brands than ever before.

3.2. Personalization

Mobile phones are a most powerful symbol of individuality in the modern world. From appearance to

color, from ringtone to MMS, everything about a mobile phone speaks to the character and tastes of its

user. Consumption patterns indicate mobile users are an active force in the mobile ecosystem, which

provides content, applications and ―habitats‖ for creativity and expression. When subscribers turn on

their mobile devices, they want to get the services and applications they want, when they want them,

where they want them, and how they want. Advertising formats, therefore,evolve to contextual,

interactive, and permission-based messaging to retain consumers‘ attention and to help minimize both

irritation and ―tuning out".

Creative intelligence about customers and not creative content alone is critical to deliver relevant

advertisements which resonate with the customer. As an advertisement medium, the mobile offers

tremendous insight into who each individual consumer

is, where that consumer may be present at any given

point in time, and what are the user‘s preferences based

on previously "learned" behavior patterns, enabling

brands to implement subscriber-intimate marketing and

take advantage of cross-selling opportunities:

Context-based Targeting

The mobile phone is a highly personal device. Within a

typical household, a number of individuals respectively

read, watch and browse the newspaper, television and

the desktop PC On the mobile phone, the use of calling,

texting and browsing services is overwhelmingly

confined to the customer. The mobile is the only

personal medium, with a unique personal identifier i.e.

the MINDS. When the user initiates a transaction over

the mobile, the marketer can be confident of the

customer‘s identity, which is not the case when an online

connection is used. For instance, in event of a customer

using the mobile to regularly visit a Fomula One racing

site, download James Bond movie trailers and pay a toll charge using the mobile, the advertiser can

conclude with reasonable certainty the consumer is a James Bond fan, watches Formula One racing

and drives a car to work. This information is extremely valuable to business-to-consumer marketers. In

an age of ongoing customer fragmentation, it enables lifestyle micro marketing, which is missing in

today's mass-market advertising models.

Search-based Advertising

British carrier group Vodafone will soon launch

location-based advertising. The service will allow

advertisers, such as restaurants or shops, to

overlay their logos on maps. The carrier is also

building a range of opt-in location-based

advertising services around Wayfinder, including

one ―Power Search,‖ a location-aware, mobile

version of Google‘s AdWords. The service

allows users to enter a search term and it returns

results based on where you are, such as finding

the nearest restaurant. Advertisers would pay to

get to the top of the list very much like they do

on Google. The new services will roll out in

western European markets first, most likely in

the UK, Germany and Scandinavia, three of the

19 territories where Wayfinder is currently

available.

Source: MocoNews



In an era where pervasive media improvement and development of new business models requires

advertisers to accurately understand subscribers‘ usage patterns, aggregating information on user

behavior and services usage and correlating it with insights including time, location, demography, and

users‘ search preferences , can help advertisers efficiently adapt messages to user preferences and

maximize call-to-action response rates. This micro-marketing capability translates into an improved cost-

per-thousand (CPM) response performance perspective, a better cost-per-acquisition metric and, finally,

a better brand experience metric. The following features contribute in building a contextual framework

for ad-delivery.

Location-based Targeting: Location is a prime form of context information and adds a compelling

new dimension to advertising. Integrating GPS-based location-based systems can allow advertisers to

track the approximate position of target customers to deliver localized advertisements and/or

information relevant to a certain area related to his position. Examples include location-specific

advertising, which provides information and advertising in the form of city guides, places to visit and

dine.

Search: Advertisers are increasingly exploring search to deliver contextual, relevant advertisements.

A combination of query characteristics including specific keywords and location is used to deliver the

advertisement. For example, if a subscriber queries a particular car brand, the marketer can display

related information on car deals within in the user‘s geographic proximity. Advertising based on

intention presents itself in the context of the user and has a much better chance of converting a lead

into a customer.

Geo-targeting: Most serving technologies available today allow a wide spectrum of region-specific

advertising - one can target as narrowly as a certain postal code. Geo-targeted advertising is becoming

more and more important within the industry, particularly as countries with a low level of Internet

penetration get on the web. Mobile phones enable brands to geo-target advertisements, i.e. display

regional WAP adverts. For instance, a global company with regional brands can ensure WAP banner-

ads are displayed when the site is

accessed from India.

Computing Context: Ownership of a

specific device is indicative of the

customer‘s net worth. Device targeting

enables advertisers to target subscriber

demographics based on device

capability. For example, luxury brands

may want to deliver advertisements to

high-end devices. Likewise, brands that

launch video campaigns will target users

who posses high-end devices with video

playback capabilities.

However, the operator‘s success in

service personalization depends on the

responsible use of technology.

Operators will need to carefully manage trade-offs between personalized services and security and

privacy concerns.

3.3. Cost Effectiveness

Advertisement spots on prime-time television and popular national dailies are expensive. As the

sources of media content have proliferated — first through cable, then satellite, and more recently the

Internet — the audience for each individual source has shrunk, dispersed among the various options.

Nevertheless, the cost to produce and distribute a television show has remained relatively stable.

Context-based Advertising

User Context

Identity,

Usage Profile

Demographic Profile

Location (not only geographic location but also localized i.e., on which street )

Computing Context

Network Connectivity and Bandwidth

Type of Wireless Device

Screen Size

Type of Operating System

History When the above context are recorded over a period of time

Source: Comviva



Therefore, if the audience for that show is smaller, then advertisers are in effect paying a higher per-

person advertising rate.

The mobile phone offers brands a cost-efficient medium

to target users, ensuring better ROI. In addition, mobile

advertising has a much greater chance of cutting

through the clutter and reaching the eyeballs of its

target audience than advertising through traditional

media. According to Kevin Clancy, an advertising

industry expert, the average ROI of television

advertising campaigns ranges between 1% and 4%,7

while ROI from targeted mobile advertising campaigns

is as high as 300-400%. Compared to Internet

advertising, the absolute cost of mobile advertising

campaigns is higher. However, the average click-

through rate (CTR) for mobile is superior, increasing the

overall cost-effectiveness for brands. According to

Informa‘s estimates, the average CTR for online

adverts is below 0.5%8, whereas the CTR averages 4%

on the mobile web with several targeted campaigns

yielding results as high as 7% to 12%9.

Comparative Matrix

Medium Context Targeting Personalization Interactivity Cost-Effectiveness

Television M M L M L

Radio M L L M L

Cinema M L L L L

Outdoor L L L L L

Print M M L L L

Internet H M M H H

Mobile H H H H H

Source: Comviva

Based on this research, it is apparent that telecom service providers can position the mobile as an

optimal channel through which to reach individual consumers with very targeted and relevant messages

- resulting in a higher degree of purchase response. Until now, advertisement investment in the medium

has failed to keep pace with its rapid growth and potential. To address this gap, Comviva believes

service providers must begin now to design and implement a long-term plan that integrates business

strategy and operational management. The next section focuses on the emergent opportunity from an

operator perspective and the fundamental building blocks of the mobile advertising ecosystem.

7 ―How to Improve Marketing ROI: Free Kevin Clancy Web Seminar Offers Five Ways to Improve Marketing Performance‖

8 Mobile Content and Services, 7th Edition, Informa Telecoms & Media

9 Mobile Marketing Association

ROI on Mobile Advertising Campaigns

BMW launched am MMS to promote the use of

winter tires among German consumers. The

advert was targeted at 117,000 mobile

consumers, and generated USD 45 million in

sales – an approximate return of USD 750 for

every dollar spent

Luxury brand Dolce & Gabbana launched a

mobile advertising campaign targeted at teen

and young adult customers. When users

clicked on the WAP banner ad, they were

lead to a downloadable game, branded

wallpaper and a product catalog. The click-

through rate was an approximate 10%,

significantly higher than the average CTR for

Internet banner ads

Source: Comviva



4 Mobile Advertising Opportunity Service providers who intend to capture the mobile advertising opportunity need to reorient business

models. Until now, the strategic focus of this industry has traditionally been on initiatives that maximize

the share of a consumer's "wallet". However, high-speed Internet access, mobile services and

traditional telephony offerings to the home and office have saturated that compartment of the

consumer's wallet, compelling operators to look to non-subscriber sources of revenue - advertising. As

a result, Comviva believes the time is right to introduce advertisement-driven service models that allow

operators to not only tap into new revenue streams without the limitation of available end-user wallet

share but also, most importantly, to differentiate themselves from competitors.

Across markets, mobile data services contribute a sizeable segment of operator revenues. For

instance, in Q3 2008 South African operator Vodacom generated 27.91% of total revenues from data

services, whilst Filipino operators Smart and Globe Telecom reported revenue contributions of 45% from

data services. Globally, Informa Telecoms & Media estimates mobile data revenues climbed to USD 200

billion, registering a 35% growth in 2008.

Regional Data Revenues

Source: Informa Telecoms & Media

Notwithstanding the growth, a limited set of offerings, primarily SMS and music-based services,

contribute the bulk of data services revenues10

. Several studies among UK-based customers in the age

groups 18-35 reveal the high cost of premium value-added services is a significant barrier to mass

adoption. Further, over 50% of the respondent base reported a willingness to receive targeted

advertisements in exchange for free access to mobile TV and video content. 11

10

SMS contributes 50% 11

The survey was commissioned by QuickPlay Media and conducted by online survey services provider Zoomerang



Price Barrier to Premium Services Uptake

Source: Zoomerang

Over the Internet, ad-discounted service models have become the norm. Google and Yahoo have been

successful at monetizing ―tens of millions of expressions of interest and intent‖ via their search engines

by converting them into ―highly targeted advertising‖ opportunities for the ―long tail‖ of products that

appeal to a wide range of tastes. With growth in off-deck content, this poses a significant threat to the

operator. Ad-funded business models enabling operators to underwrite ―freemium‖ services – free of

charge premium services – can maximize usage by existing customers as well as promote services to

new users.

Examples of Non-Intrusive Freemium Ad Formats

Advertisement as Content

Users subscribe for the type of content they wish to receive, such as sports information, weather updates, astrology alerts, etc. with the operators. Turkcell is a major proponent of this model and has forged partnerships with several brands including Akbank, Coca-Cola, Kraft, Nestlé, Unilever and Proctor & Gamble to deliver sponsored messages to subscribers. The operator claims 6 million users have subscribed to its European football goal service, sponsored by Coca-Cola. Likewise, Turkcell‘s ad-sponsored weather service has attracted 2 million subscribers. Besides sponsoring text content, leading consumer brands such as Pepsi have joined forces with content providers to offer customers free music in the form of ringtones in return for viewing their brand adverts. Content sponsorships are becoming increasingly popular as a way to ascertain that viewers actually spend time watching the advertisement. For example in Indonesia, Utones has launched a mobile application that enables users to receive mobile content in exchange for accepting mobile ads. Consumers receive points for each ad viewed —which can be redeemed for ringtones, wallpapers, games or even cash awards.

Downloadable Applications

Integrating advertising within mobile applications opens a new revenue stream for service

providers which may be used to partially or completely subsidize the price of a mobile application

or the service provided by the application. For example, Mxit, a leading independent IM service

provider integrates advertisements with its IM client. Branding, customer relationship

management, or driving users to a mobile website are the primary objectives for in-application

advertising.

Banners Static or animated image, text, or a combination of these is placed in defined areas within the

application, for example, on the application main-menu page or sub-pages. Users can navigate

or click on dynamic banners to access more information from the advertiser.

Full Screen Advertising

Full-screen adverts comprise one or more static or animated images, text, audio, and/or video,

which may be placed as the opening screen for the launch (pre-roll), or exit (post-roll) of an

application, or as a splash or jump page within the application. The user is able to navigate and

4

6

8

12

20

50

0 20 40 60

Don't know if service is available to me

Not enough quality content

Friends tried it but didn't like it

Mobile phone does not support it

Others

Think it will be too expensive

% of respondents

53%

34%

13%

0%

10%

20%

30%

40%

50%

60%

Yes No I don't know

% o

f re

spo

nd

en

ts

Would you be willing to watch a short targeted advertisement on your mobile device to have free

access to mobile TV and video content?

If you have not tried mobile TV or video service,

what is the biggest reason why?



Examples of Non-Intrusive Freemium Ad Formats

click the full-screen to access more information from the advertiser

Embedded Adverts

Embedded advertisements are formatted to be compatible with the main content type used in the

application context. They can be resized, reshaped, and freely positioned as part of the core

application content. Adverts are frequently embedded within games. Examples include flags on a

race track or soccer field billboards. Broadly, there are two approaches currently followed to

embed ad-content within applications. Some companies, such as Amobee, obtain source code

from developers in order to ad-enable their products. Others, such as GreyStripe and Actionality,

automate the process so that adverts are injected at the network level.

Source: ComvivaTM

Informa believes mobile advertising revenues

will register a compound annual growth rate

of 47.7% and touch USD12.1 billion in

revenue by 2013. The mobile advertising

opportunity has attracted several players,

including established players such as Yahoo,

Google, and Nokia, as well as a number of

start-ups to the mobile advertising

marketplace, resulting in a highly complex

and fragmented ecosystem.

Growing interest in off-deck content has

weakened the operator‘s hitherto dominant

position in the value chain. Brands today

have a real option to buy advertising

inventory directly from Google, Yahoo or

MSN or stand-alone hosted application

providers, such as games and IM. For

example, Mxit, one of the largest operator-

independent IM communities has

successfully inserted adverts with its MIxit

client. Likewise, Greystripe, the world‘s

first ad-funded mobile gaming network,

includes 800 free mobile games from 70

publishers accessible across networks.

With more than 14 million games

downloaded in a 12-month period

between 2006 and 2007, the Greystripe

ad-funded model is a huge success.

Screen Digest predicts globally users will

download over 60 million plus ad-funded

mobile games. To win the battle of shifting

value chains and capture a sizeable share

of the market, operators need to invest in

a new set of competencies to negotiate

rapid shifts and maximize perceived value

to advertisers. Comviva research

concludes that to adapt and succeed –

especially in the current economic

environment – operators need to build a

new set of capabilities based on open

collaboration, multi-channel innovation, greater consumer insights, and accurate measurement

processes.

Figure 5: Mobile Advertising Revenues


Figure 5: Mobile Advertising Revenues

Source: Heavy Reading

1.72.6

4.16.1

8.7

12.152.94

57.69

48.78 42.62

39.08

0

20

40

60

80

0

5

10

15

2008 2009 2010 2011 2012 2013

Mobile Advertising Revenues

Revenues (USD Billion) Revenue Growth (%)



5 Building the Ad Network With 4 billion customers, the reach of many telecom operators collectively exceeds that of Internet

players. Telecom operators are typically better placed to build and develop relationships with local

advertisers than global organizations like Google, precisely because they are local or national

themselves. Moreover, many operators have already developed solid relationships with local advertisers

through their directory businesses. They also collect vast quantities of consumer data, which they can

use to develop profiles of their subscribers, including the demographic characteristics, personal

attributes and preferences of those subscribers – and even, perhaps, their viewing patterns, in the case

of those operators that have the relevant analytical tools and capabilities. They can combine these

insights with their ability to identify where individual users are based and offer highly targeted, localized

promotions. The opportunities for telecom operators in the mobile advertising space translate into four

broad imperatives:

Service Delivery Network: In the first scenario, operators leverage their gateway role to deliver third

party advertisements. Mobile users access external sites directly. Content is provided by third parties

and advertisers forge direct alliances with content providers. The operator gains a share of click

revenue stream. Here the operator has a relatively weaker position and the threat of disintermediation

is real.

Smart Add Delivery Network: In the second scenario operators benefit from functioning as a

connectivity pipe as well as monetizing the ability to track user behavioral patterns across the network.

In this model, the network operator not only provides connection to the end user, but drives accurate

targeting by combining opt-in, permission-based information, click-stream analysis and data on

consumption patterns. As the advertising budget spent off portal could be substantial in the future,

operators should consider this opportunity. Operators have a distinct advantage due to the information

they already have about their customers. Fostering the exchange of information between customers

and operators is a critical foundation for the model.

Closed Advertisement Network: The third scenario involves selling advertising space, for

example, in the form of banners within their own content and application inventories. Whilst a great deal

of attention has been paid to mobile web, operators own unique service delivery bearers and

application assets including SMS, USSD and RingBack Tones, which can be used effectively to deliver

innovative advertisement campaigns. Operators own a large number of applications. With this scenario,

already launched by Vodafone and O2 in Germany, operators have full content ownership and

responsibility for the advertising space.

Open Advertisement Exchange: The fourth scenario involves managing, buying and selling

inventories in-house services and application as well as third party sites. In effect, operators become

large-scale advertisement aggregators. Operators embrace an open collaboration model, provide

advertisers access to the marketplace, as well as the toolsets to support multiple advertisement

channels, formats, models, and advanced targeting strategies. Mobile service providers need to

strengthen cross-industry partnerships by bringing together agencies, aggregators and platform

vendors as well as enabling business processes, cultures and key technologies. The open ad

exchange model can help operators capture a significant share of the multi-billion dollar industry.

According to Informa Telecoms & Media, advertisers will spend more than USD 11 billion by 2011 on

mobile marketing – operators could stand to garner 50% of the share as they negotiate deals with

partners.

The specific path and business model is dependent on the scale and the size, of the operator. Most

service providers will adopt a gradual evolutionary path and multiple business models may coexist in the

mid- term. Over time, Comviva believes that operators with multi-country networks will assume the role

of an open ad exchange – managing the ecosystem, buying, and selling advertisement inventory.



5.1. Multi-Channel Capability

An impediment to mobile advertising‘s growth has been the choice and the complexity that exists in the

ecosystem. Mobile operators have several channels with different capabilities in terms of reach,

effectiveness and sophistication which can be used for mobile advertising (View Global Mobile

Advertising Spend and Appendix 1). The possibilities for mobile ad placements are just as vast in the

mobile space as in the TV arena. If a company wants to advertise a blender, perhaps a recipe

application is the perfect place to place such a promotion or the ad could pop up when users hunt for a

café, or users receive a coupon for use at a café that uses the blender, or they could receive an SMS to

enter a recipe contest. Depending on the operator‘s existing business model (example quad play service

provider) and the chosen mobile advertisement model, multi-channel capabilities could extend to

multiple networks.

As a composite of media channels, a marketer looks at the mobile, sees dozens of choices to make,

partners to consider, and formats to construct.

For effective monetization, operators need to aggregate inventories and build integrated multi-channel

campaign strategies. Further, the advertiser must have the ease to cherry pick channels, ad formats, as

well as timing frequency and reach of the advertisement. Some campaigns may require direct marketing

push capabilities such as SMS, MMS delivery, while others may be more suited to on-portal advertising,

unobtrusive offline ODP advertising or opt-in message advertising. Implementing an end-to-end mobile

advertising strategy with multi-channel delivery capabilities will enable mobile operators to build a strong

position in the mobile advertising ecosystem and monetize their strategic assets. Different approaches

across ad units and ad inventory may have to be tried, involving a trial and error mindset.

Global Mobile Advertising Spend, by Type

Mobile Advertising Spend (USD Million)

2008 2009 2010 2011 2012 2013

Messaging 1,151.3 1,524.8 1,907.3 2,151.9 2,384.1 2,695.1

Banner 346.1 602.1 1,038.4 1,647.8 2,378.5 3,260.2

Links 79.3 147.4 253.5 410 590.9 860.9

In-game 21.3 78.3 180.8 321.1 451.3 690.6

Interstitial 20.9 44.2 128.9 290.5 528.7 797.3

TV and Video 34.3 69.7 187.6 385 637.7 987.3

Content 52.4 94 187.6 349.8 554.8 798.4

Misc. 14 71.3 199 552.9 1,185.2 1,998.1

Total 1,719.7 2,631.8 4,083.1 6,109 8,711.2 12,087.8


An integrated multi-channel strategy assumes that the operator has the capability to aggregate

inventories, that the key VAS applications on the network are ad-capable and that the underlying

advertisement platform, is equipped to manage backend workflows. These workflows will span

campaign management, inventory management, business intelligence, revenue management and ad

analytics.



5.2. Customer Intelligence

Marketing message distribution, in terms of timing, context and relevance, rivals creative execution in

importance in the mobile advertising space. Across media, the more relevant an advertisement is to a

consumer's interests, the more engaging and effective an advertisement will be. The same is true of

mobile advertising, only it is further pronounced due to the uniquely personal nature of the medium and

the relatively pristine, uncluttered media environment that it provides

Operators possess significant unique capabilities and assets in the mobile advertising space. These

include exclusive access to detailed end-user profiles, usage patterns for voice and data services,

mobile web click-streams and the type of content they download, billing data, and location information.

Subscriber network usage patterns combined with real-time, dynamic information about subscribers,

such as location, enable operators to deliver the right advertisement to the right customer. (Please View

Section 3.2 for detailed information)

Notwithstanding the fact that operators have a unique personal identifier (the MSISDN), they

nevertheless lack a unified 360 degree view of the customer. Customer data available on the network is

dispersed across numerous networks and applications and locked in siloed databases. Operators need

to deploy standard-based interfaces to federate subscriber data from multiple legacy systems and

integrate with third-party applications to construct the user‘s consumption profile on the network.

Network service usage patterns are extremely significant but do not provide a complete view of the

customer. Typically, marketers want the consumption profile of the customer across various spend

categories to create meaningful segments, form insights and deliver contextually relevant ads. For

instance, a fashion clothing brand needs information on a customer‘s annual spend on clothing as well

as on that customer‘s fashion preferences. Operators have no exposure to such data and are unable to

effectively use inventory to deliver targeted ads.

Operators need to invest in creating a strong cross-industry partner network comprising leading retail

houses, credit card companies, and banks to succeed in the mobile advertising space. Data feeds

supplied by these partners can transform operators into a subscriber information powerhouse and result

in better inventory utilization.

5.3. Response Measurement

Brands need to target and then track the advertising process. Marketing requires new strategies and

tools to connect effectively with consumers. Instead of being satisfied with knowing how many people

are exposed to their messages, operators are working hard to determine how well their messages are

received, whether they are powerful enough to generate a customer response, and exactly what those

responses are. Some of the currently widely deployed performance metrics to measure the

delivery/response of mobile advertising include:

Cost per Thousand Impressions (CPM): CPM is the price paid by advertisers per thousand ad-

impressions exposed to users. The CPM metric is used for static banners on mobile web or delivery of

text messages to a large number of subscribers Since CPM is a measure to simply deliver messages

and does not track effectiveness and impact, advertisers are increasingly looking to performance-based

models such as CPC and CPA to track ROI.

Cost per Click (CPC): The Cost per click model effectively tracks and measures consumer

participation in a campaign. Advertisers pay for each user click

Cost per Acquisition (CPA): CPA is a measure of the end-to-end cost an advertiser incurs to

acquire a customer.

Although the performance measurement models mentioned above broadly quantify mobile advertising

effectiveness, the inability to deploy granular measurement techniques is hampering the mobile

advertising space. Some of the challenges include:



The inability to measure

unique users against polluting

traffic (bots, spiders, etc.)

Measure advertising

impressions in intermittently-

connected content like games or

downloaded video/audio

The inability to track the

effectiveness of cross-network

campaigns

Accurate and effective

measurement metrics are critical

to the success of mobile

advertising. Marketers should be

able to plan, define and monitor

their advertising campaigns and view real-time feedback reports. Operators need to work towards

devising a standardized measurement system to enable informed decision-making. Standard, accurate

and audited metrics delivered to the media and advertising communities will accelerate the development

of mobile advertising, and build trust and confidence in the mobile as an effective advertising medium.

5.4. Managed Services Model

New digital interactive advertising mediums have radically altered the advertising ecosystem. The

marketer–agency–media company value chain used to be simple and straightforward. Roles were

clearly defined. Marketers defined a brand essence, agencies developed the idea and creative

execution, and media companies put it through the pipeline. A marketer worked with a select few

advertising agencies of record that handled most of the creative marketing business. Today, that linear

relationship has morphed into a spider web of overlapping connections. Marketers are collaborating

directly with media companies, specialty agencies are multiplying, and media companies are building in-

house marketing services capabilities.

Operators do not possess the competencies to negotiate the complex ecosystem involving disparate

players nor are they familiar with media planning, buying and selling. To reduce business risks and

scale operations, Comviva suggests operators ally with a managed services partner to deliver an end-

to-end solution, spanning consulting and systems integration, partner management as well as software

technology features and advert delivery.

Performance Measurement Techniques for Mobile Advertising

Source: Yankee Group



Hosted Applications Solution Value Chain

Source: Instat

Adopting a hosted application model does not mean that the service provider abdicates control or that

they cede technical leadership and responsibility to the solution provider. The hosted delivery model

simply allows the service provider to shift its focus to other segments of its value chain, such as

managing their core network, developing compelling services bundles, and executing successful

marketing and sales campaigns. By utilizing the capabilities of a hosted application solution partner, a

service provider can achieve tremendous advantage from a small number of technology- and

operations-savvy employees who work closely with the hosted applications solution provider. The

service provider no longer has to devote significant resources to scaling up or down, according to a

particular technology or focus on managing the skills and the people and the training. The solution

provider addresses the issues of scaling and lifecycle management. In this manner, the service provider

is able to delegate many of the day-to-day operational activities to the partner, whilst managing

performance through SLAs and reviews. Nevertheless, the operator can still provide technical

leadership and oversight on architecture. The service provider can focus on managing a few highly

leveraged people as opposed to an army.



6 Conclusion The future of advertising is happening now. The methods by which consumers absorb information and

entertainment — and the ways they perceive, retain, and engage with brands and brand messages —

have changed irrevocably. Empowered consumers are compelling advertisers to migrate to interactive

mobile mediums which allow them to build a two-way conversation with customers. Successful mobile

advertising is a mix of reach, collaboration, and analytics. Mobile operators have a unique advantage in

all these three, but have to monetize these assets. By consolidating subscriber data and responses and

measurement metrics, operators can demonstrate the value of their network and justify mobile

advertising spends to the advertising community. This is critical for building confidence in the mobile

medium as an effective advertising channel.

This study has identified some of the major opportunities presented by the new marketing environment.

Yet realizing the full promise of these opportunities will require focused change in four critical areas: (1)

consumer insight; (2) media mix and channel management; (3) marketing organization, culture, and

talent; and (4) ecosystem interconnectivity and partnerships. Some leading operators have already

begun to demonstrate the kind of change required. However, there is no uniform model or template for

all organizations. Experimentation, innovation, and discovery are challenges, but also necessities for all.

This principle has not changed, and will never change, in the advertising rulebook.



7 Appendix 1: Mobile Ad Inventory

Text Messaging

Considering the ubiquity of text messaging, SMS is one of the popular advertising mediums. The use of

text messaging in mobile advertising ranges from push-based marketing, coupon/voucher campaigns

to highly targeted opt-in advertising. According to the Yankee Group, click-through rates on SMS (either

clicking on a link embedded within a text message or calling a service number range from between 3%

and 5% as compared to a 1% response rate for email campaigns.

Mobile Internet

An increasing number of brands are using the mobile Internet to reach and engage consumers. Mobile

internet advertising predominantly comprises static or dynamic banner adverts on WAP sites, either on

the operator‘s portal or off-deck sites.

Mobile WAP Interactivity

Click to call Users place an outgoing call to the content provider or advertiser

Click to locate Users find, for example, the closest car dealer or movie theatre, enabled by location-based services

Click to order brochure Users receive marketing material by providing their postal address

Click to enter competition Users enter text or a sweepstake to win prizes

Click to receive email Users receive an email and a link to an online site by providing their email address

Click to receive mobile coupon Users receive an electronic coupon on their mobile phone to be redeemed at a participating merchant

Click to buy Users make a purchase paid for with a credit card, added to their monthly mobile bill or using some other form of mobile payment

Click to download content Users download content, including logos, wallpapers or ringtones onto their mobile phones

Table 3: SMS-based Advertising Campaigns

Campaign Type Description

Push SMS advertising (A2P messaging)

Bulk text messages loosely targeted around demographics or geography, for example, a promotional message sent by a fast-food joint to an operator‘s subscribers in a particular city

Coupon/Voucher campaigns Text messages with an electronic coupon/voucher or unique code that can be redeemed at a participating store

Opt-in SMS advertising Messages from selected brands where users consent to receive based on their preferences

SMS Insert (P2P messaging) Promotional messages inserted within P2P SMS. Requires subscribers to opt-in and is usually meant to discount the price of SMS

Short Code Advertising SMS Short Codes can be used in a variety of innovate ways by brands. Coca-Cola in the US has engaged in some of the most prominent short code marketing in the past year. Through My Coke Rewards, Coca-Cola customers collect unique codes found on various Coca-Cola products and enter them into an account they‘ve registered at mycokerewards.com. When they reach a certain level of points, they are able to redeem points for rewards. The mobile component of the program allows consumers to enter the codes over their mobile phone on the go. Coca-Cola‘s mobile users typically send and receive about 32 messages a month to Coca-Cola

Source: Mobile Marketing Association and Nielsen



Click to enter Mobile Web site Users click a banner to get connected to a mobile website

Click to forward content Users forward relevant content to friends, creating a viral campaign effect

Click to video Users click a banner to view an advertiser‘s commercial for a product or service

Click to vote Users reply through a message ballot or poll from their mobile phone and provide marketers and brands with valuable research insights

Source: Mobile Marketing Association

Mobile Search

Juniper Research predicts global mobile search revenues will exceed USD 2 billion by 2013, unfolding

enormous opportunities for search advertising. Combining location with search enables users to

discover services in their proximity. For instance, when consumers search for ―Ford‖ on a mobile search

engine they receive adverts from local Ford dealers. Currently, an approximate 85% of search queries

on mobile phones are confined to the mobile storefront – i.e., search for ringtones, wallpapers, or other

content specifically for use on the mobile phone.

Location-based Advertising

Brands can deliver ads based on the user‘s geographic coordinates. For instance, if the customer has

entered a shopping mall, the customer can receive ads on discounts and offers from restaurants and

retail establishments in the vicinity.

Communities and Social Networking

The mobile social networking space, which includes dating, chatting and content sharing experiences, is

where we live our lives. Informa predicts the rise in number of services matched by an increase in their

membership will reach 12.5% of the global mobile population in the most conservative scenario and

account for 23% of the total in a high growth scenario. Targeting communities and social networks to

create and sustain excitement in the brand is increasingly becoming an essential marketing strategy.

Social communities require members to provide details on preferences, a powerful source of information

for markets if used effectively. Social networks also provide a powerful tool to create communities

around brands whereby consumers can interact with a wider brand community. For example,

Facebook‘s ―Addicted to Starbucks‖ group has almost 124,000 members, over 670 discussion topics

and almost 10,000 wall posts. The cohesiveness and viral power of mobile ―member communities‖ have

led global consumer brands including Toyota, Coca-Cola, Nike, and Burger King to leverage social

networks to reach, engage and interact with their target customers. With growing advertiser interest in

mobile social media, the ad-funding model is set to gain traction in the coming years. Juniper Research

forecasts by 2013, ad-funded social networks will provide the bulk of revenues in the mobile user-

generated content (UGC) space.

Brands can tap the social networking phenomenon by:

Purchasing advertisements (banner or text) to appear on a WAP page on a per-impression basis. A

branded logo or message presented to the user may or may not call for user action. A call-to-action will

require building appropriate landing pages which will be directed to users when they click on the

advertisement.

Sponsoring social networking communities

Downloadable Content

Mobile Games

Gaming applications provide advertisers with a conducive environment for placing advertisements as

banners visible during game play or as interstitials shown in between levels or rounds. In addition,

games also present a unique advertising opportunity in the form of in-application advertising, where



adverts are embedded within the game content. An example is the availability of an in-game energy

drink at different levels of the game meant to regain the energy of the player‘s character. The most

obvious benefit brands derive out of in-game advertising is their ability to reach targeted consumers

without disrupting attention and user-experience, primarily because embedded adverts do not compete

for screen space from the actual content.

Several success stories have been reported by brands using mobile games as a channel to reach and

engage consumers. A case in point is the advertising campaign for the New Line Cinema film ―The

Golden Compass‖, which played full-screen adverts to consumers downloading mobile games. The

campaign increased awareness of the movie by 19%, raising interest in watching the movie by 10%.

Mobile Music

RingBack Tones are an extremely popular service among emerging market users. Operators can

leverage the ringback tone platform to deliver product related jungles and catchy music tones to users.

Considering callers are unlikely to divert attention whilst waiting for the recipient to answer the call, RBT

assures customers of high conversion rates.

Mobile Video/TV

Operators can leverage broadcast mobile TV and unicast video to deliver advertisements

Broadcast Mobile TV: Mobile TV is essentially broadcast video content transmitted via an overlay

network (e.g., digital video broadcast-handheld [DVB-H], MediaFLO, digital multimedia broadcasting

[DMB]). Similar to conventional television, advertising falls into slots within the programming stream.

Unicast Mobile Video (Streaming and Downloads): Typically, users access video content from a

store, similar to YouTube. Advertising in this format would be pre-, mid- or post-roll.

Pre-roll: Advert played before the actual video requested by the user starts playing.

Post-roll: Advertisement played at the end of the video clip.

Interstitials: Advertisements displayed when the requested video is downloading.

Sponsorships: Several brands sponsor video clips in lieu of users watching advertisements over other channels, for example, over the mobile Web.

On-Device Portals

On-device portals (ODP) enable consumers to browse and view content while offline, and refresh the

interface when they are on the network. Odds are emerging as a significant form of inventory on the

mobile device attracting third-party brand advertisements. As an advertising channel, on-device portals

provide:

A client-server foundation upon which vendors can effectively build advertising insertion, rotation and

measurement engines

A service category focus that also appeals to advertisers and merchandisers

Banners, videos, and multi-layer advertising combining images, video and games are suitable for ODP

advertising. Native control over the end-device enables advertisers to insert an interactive ―call to action‖

such as ‗browse to enter mobile website‘, ‗initiate call‘, and ‗send message‘ with each advert. By non-

intrusively updating the displayed ODP adverts without any user interaction and at no cost to the

subscriber, ODP advertising overcomes many of the user experience problems associated with on-

portal advertising where advertisements compete for space with other content.



Idle Screen

Due to its always-on presence, the mobile screen is the most sought-after inventory in the mobile

handset and ideally suited for non-intrusive mobile advertising. Until now, mobile operators and handset

manufacturers have used the idle handset screen to display links/access codes to their own branded

services. With larger and more color-rich mobile screens, advertisers are willing to exploit the channel.

The advertising can take the form of a ticker running across the top or the bottom of the screen, a pop-

up ad or a welcome message.

Figure 9: Operators’ Control over Mobile Advertising Channels

Source: Yankee Group



References A Mobile Advertising Overview. July 2008. Interactive Advertising Bureau.

Berman Saul, Battino Bill and Feldman Karen. Beyond Advertising: Choosing a Strategic Path to the

Digital Consumer. 2009. IBM Business Value.

Bughin, Henryson, et al. Mobile Search: The On-Ramp to Mobile Advertising. 2007. McKinsey.

Implementing a Multi-Channel Mobile Advertising Platform. February 2008. Mobile Marketing

Association.

McMillan, Sally J. Exploring Models of Interactivity from Multiple Research Traditions: Users,

Documents, and Systems Handbook of New Media: Social Shaping and Consequences of ICTs. 2002.

Sage .

Moss, Pandey, and Clark-Dickson. Mobile Content & Services 7th Edition. Informa Telecoms & Media.

Vollmer Christopher, Precourt Geoffrey. Always On: Advertising, Marketing, and Media in an Era of

Consumer Control. 2007. Strategy + Business

http://www.amazon.com/exec/obidos/search-handle-url/ref=ntt_athr_dp_sr_1?%5Fencoding=UTF8&search-type=ss&index=books&field-author=Christopher%20Vollmer

http://www.amazon.com/exec/obidos/search-handle-url/ref=ntt_athr_dp_sr_2?%5Fencoding=UTF8&search-type=ss&index=books&field-author=Geoffrey%20Precourt



About Comviva

About Comviva

Comviva adds value to the mobile service provider‘s business and operational environment, creating subscriber stickiness via innovative products, applications and service offerings that cater to every aspect of the subscriber wish list, whilst addressing critical operational issues confronting the mobile service provider today.

With an extensive portfolio of solutions that drives content, commerce and community-focused services and revenues for operators, Comviva enables mobile users to interact and access infotainment easily.

Operator goals of improving performance and enhancing the user service experience are supported with solutions that enable rapid and profitable service extension to new and existing subscriber segments, whilst enabling end-to-end service and customer lifecycle management.

A global leader, Comviva‘s solutions power value added services for operator customers in over 80 countries worldwide.

Singapore Office No. 10 Jalan Besar #11-05 Sim Lim Tower Singapore 208787 Tel: +6392 0021 Fax: +6392 0923

Gurgaon Office A-26, Info City, Sector 34 Gurgaon-122001, Haryana. India. Tel: +91-124-4819000 Fax: +91-124-4819777

Bangalore Office 2/20A, 35/36, Bellary Road Allalasandra Rly Gate, Yelahanka, Hobli Bangalore- 560065, India. Tel: +91-80-43401800 Fax: +91-80-28562517

Comviva Regd. Office Aravali Crescent 1, Nelson Mandela Road Vasant Kunj, Phase-II New Delhi- 110070, India.

Bangalore Office #4, 12th Km, Bellary Road Jakkur, Bangalore- 560064 India. Tel: +91-80-43401600 Fax: +91-80-28565854

UAE Office Comviva Technologies Limited Executive Suite . Y-43 P.O. Box 9242 Sharjah, UAE.

UK Office Level- 1, Cyberhouse Molly Millars Lane, Wokingham RG41 2PX, United Kingdom. Tel: +44-118-9890144 Fax: +44-118-9793800

Bangalore Office Maruthi Towers, 138 Airport Road Bangalore- 560008, India. Tel: +91-80-40301500 Fax: +91-80-41150552

Mumbai Office Unit No. 1-4, 1st Floor, Paradigm Tower, Tower B, Mindspace Malad-West, Mumbai- 400064, India. Tel: +91-22-40774300 Fax: +91-22-40774333

Comviva's registered office is in New Delhi and primary development centre is in Gurgaon. Its other R&D centers are located in Bangalore and Mumbai. Comviva has representative offices in UAE, UK, South Africa and Singapore.



Restrictions and Copyright Declaration

The information in this document is subject to change without notice and describes only the product defined in the introduction of this documentation. This document is intended for the use of prospective Comviva customers for the sole purpose of the agreement under which the document is submitted. No part of it may be reproduced or transmitted in any form or means without the prior written permission of Comviva. The intended audience for this document is professional personnel, who assume full responsibility for using the document appropriately. Comviva welcomes customer comments as part of the process of continuous development and improvement of its documentation. The information or statements given in this document concerning the suitability, capacity, or performance of the mentioned hardware or software products cannot be considered binding, but shall be defined in contextual specific eventual agreement made between Comviva and the customer.

However, Comviva has made all reasonable efforts to ensure that the instructions contained in the document are adequate, sufficient and free of material errors and omissions. Comviva will, if necessary, explain issues, which may not be covered by the document. Comviva‘s liability for any errors in the document is limited to the documentary correction of errors. Comviva will not be responsible, in any event, for errors in this document or for any damages, incidental or consequential, including monetary losses, that might arise from the use of this document or the information in it.

This document and the product it describes are considered protected by Patent, Copyright and Trademark laws in accordance with relevant Indian laws.

The only warranties for Comviva products and services are set forth in the express warranty statements accompanying its products and services. Nothing herein should be construed as constituting an additional warranty. Comviva shall not be liable for technical or editorial errors or omissions contained herein.

The Comviva logo is a registered trademark of Comviva Technologies Limited. Other product names mentioned in this document may be trademarks of their respective companies and they are mentioned for identification purposes only.

Copyright © 2009 Comviva Technologies Limited. All rights reserved.