Issue 5

Thinking about mobile

LOST: Location business model

In this issue... Page 3 Mobile Payments: Serving the under banked; Page 6 Italy’s mobile Internet

boom; Page 7 Company feature: Putting the Smaato thing into mobile advertising; Page 11 Lost: LBS; Page 13

From the Web; Page 15 The fall and rise of mobile video; Page 16, Mobiwan; Page17 PRS in charity and politics

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We’re back

It’s 120 days since the last issue of the mobileSQUARED newsletter. In that time Apple’s App Store has shifted somewhere in the region of 700 million apps to a user base of around 50 million. In the same timeframe, independent app store GetJar has shifted around 180 million apps. If Handango has achieved similar download levels to GetJar, then in four months, three app stores have contributed to over 1 billion downloads. The mobile industry maybe nursing its wounds from the global economic downturn, but the emergence of apps has undoubtedly injected new – and let’s face it – a much needed fresh impetus into the mobile content and services marketplace.

What does all this mean? That’s where mobileSQUARED fits in. We’ve been away over the summer working on internal (and external) projects to make sure that when we returned, we were better equipped for the intense research and analytical demands being placed on us. And we are.

Not only have we been researching the mobile market, but we’ve been researching your views too. Based on our subscriber feedback we’ve made a number of changes to improve how you can use and access mobileSQUARED analysis.

For instance, we’ve dropped news. There are numerous sites and publications already deliver a sterling news service. Why compete? What we excel at is writing up the research and analysis, so that’s what we’ll now concentrate on.

The newsletter is now shorter, with more support from www.mobilesquared.co.uk providing more frequent short, sharp bursts of analysis. Our aim is to provide daily analysis on relevant announcements as well as on our own research and we will be ramping this service up over the coming weeks and months. We will also extend this to a weekly analytical email, delivering the best bits from our daily analysis direct to your inbox. If you don’t want to receive the weekly analysis, let us know. But it will be insightful and make you think and we hope a welcomed addition to your inbox.

Over the last six months a lot of our research has been focused on or around the mobile Internet including the rise of the app stores and the ever-present mobile advertising. Strategic reports on these subjects will be released shortly.

And as we start to demonstrate mobileSQUARED’s research and forecasting capability, we have released our first strategic report covering the Indian mobile content and advertising marketplace. Our unique take on app stores and mobile advertising will soon be transferred into strategic reports, but our focus is our Roadshow. First stop is the UK – if this is a marketplace that interests you, then I guarantee that our research is a must. Read on for more details.

Nick Lane

Editor & chief analyst

editorialNick Lane, Chief researcher/writernick@d2mobile.co.ukTel: (44) 1483 243 382Mob: (44) 7976 057 052

Michael Carroll, Contributormichael@mobilesquared.co.ukTel: (44) 1483 549 840

ContributorEd Barker

How to find us:1 Farnham Road,GuildfordSurrey, GU2 4RGUK

ISSN no. 1759-6483

Published in the UK (hopefully) 10 times per year in pdf format.

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mobileSQUARED is a trading name ofD2 Mobile Ltd.

The mobileSQUARED team offers unique forecasting, analysis, research and insight on the mobile market, providing highly focused reports and bespoke intelligence. We tailor our approach to the requirements of each project and use our network of global networkof contacts.

Our extensive market knowledge stems from years covering the mobile industry meaning that we’re in a position to respond immediately to market developments.

All rights reserved. Opinions expressed by individual contributors may not personally reflect the views of D2 Mobile Ltd. Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither D2 Mobile Ltd nor any person engaged or employed by D2 Mobile Ltd accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard. Readers assume full responsibility and risk accordingly for their use of such information and content.

©2008-9 D2 Mobile Ltd.

Serving the under banked

feature: mobile payments

Emerging markets are ahead of the curve in deploying mobile payments, eclipsing some of the leading western mobile markets in terms of usage and adoption.

Growth is being fuelled by demand for mobile money transfer services in developing countries, where few people have bank accounts, while in developed countries the industry is still bogged down trying to work out how to enable users to pay for goods and services with their handset instead of their credit card.

“In emerging markets, m-banking means m-payments,” says Diarmuid Mallon, senior product marketing manager at billing systems specialist Sybase 365. He says users in developing countries are already using their handset to pay utility bills and transfer money, adding that such services “aren’t relevant” in developed markets where most subscribers have bank accounts.

Simon Cavill, director of strategy at mobile payment service provider Mi-Pay, agrees. “Where [m-payments are] relevant is to use the phone as a payment terminal in the developing world,” he told mobileSQUARED, pointing to services like M-Pacer in Kenya, which he says is already used by 15-20% of the population.

He cited a recent trip to Nairobi where cash was shunned in favour of credit pre-loaded onto his SIM. Payments were initiated by dialling a short-code, inputting the amount

required and a password, and then simply sending the amount to the creditor’s SIM via SMS. Payments were typically confirmed in around 12 seconds, he said.

While Apple has utilised the credit card billing system established for iTunes to make its App Store a success, most UK carriers are still billing customers for applications and services using Premium SMS (PSMS), Mallon says, noting that PayForIt – a joint payment initiative between UK operators – is “premium SMS in new clothes. [Operators] get the same revenue share,” as they do with PSMS.

The opportunities presented by emerging markets are perhaps best highlighted by the attention Nokia is paying to them. The firm unveiled Nokia Money in August to tap into what it sees as a growing market.

Gerhard Romen, director of mobile financial services at Nokia, explains: “Emerging markets offer interesting paradigms. There’s more phones than bank accounts. The mobile phone is usually a [consumers] first contact with the Internet.”

The service is being targeted at customers the firm calls Under Banked – those who have a bank account to pay-in cheques and withdraw the funds in cash -; and the non-banked – users who don’t have a bank account at all.

Nokia Money runs on a mobile platform developed by US-based web payment firm Obopay, which can handle transactions using

4

3G or WLAN technologies. SMS is used in areas where those technologies aren’t available, Romen said.

Basing the service on the Obopay platform means it can also be adapted for developed markets, and Romen says that those markets will be looked at in due course. “Obopay’s platform is used by Citibank, and Mastercard has just started using it in the US,” he says, noting that AT&T and Verizon Wireless are also customers. “It’s an established platform, but also an innovative one, as the company is only five years old.”

Romen wouldn’t commit to any timing for the rollout of Nokia Money in developed markets, stating only that “the biggest opportunity is emerging countries, but we won’t exclude developed markets.”

Overcoming another form of payment

Global carrier Vodafone is also focussed on money transfer services, says spokeswoman Caroline Dewing. “We’re more interested in money transfer,” she told mobileSQUARED, noting that using handsets to pay for goods and services in developed markets will be a tough sell, because they already have “so many ways to pay for things.”

The firm is heavily involved with the M-Pacer project, via its Safaricom subsidiary in Kenya. Dewing said Vodafone has also deployed M-Pacer in Tanzania and Uganda, where it is used for money transfer and loading credit onto the phone.

While m-payments means financial services in emerging markets, the focus in developed countries has been on paying for goods and services.

Near Field Communication (NFC) technology has been touted as one of the best ways to enable handsets to be used for payments, with operator trials proving popular and commuters in London responding well to its deployment in Oyster travel cards, which allow them to ‘touch and go’ on all public transport run by Transport for London.

The GSM Association has backed NFC as the technology of choice for mobile payments, mandating that it be installed in all new mobile phones made from 2009 onwards. The Association predicted a rapid rise in the number of compatible devices from 2010, and analysts rushed out bullish forecasts regarding the number of handsets and potential revenues from NFC transactions.

As we enter the last quarter of 2009, it seems those forecasts have been, at best, optimistic.

Few handset vendors have produced NFC devices – Nokia has only three models in its range, and Sony Ericsson is yet to enter the space– and it remains a tough sell for retailers, who have only just invested in chip and pin-enabled Electronic Point of Sale (EPOS) terminals, and so are reluctant to issue another round of upgrades a couple of years into a typical five-to-seven year lifecycle.

Jonathan Collins, principal analyst at ABI Research, explains that many forecasts are based on outdated information, and

concedes the 2009 figure might not reach the 1.79 million devices ABI first expected (see graph). Updated figures are due from the firm during 4Q09 that will offer a clearer picture, he said.

“Overall…it’s fair to say that NFC has lagged significantly behind early expectations from analysts and from within the industry,” Collins says. “The complexity of deploying the infrastructure to support NFC and the partnerships that build out requires, along with the business partnerships required to support multiple NFC applications on a handset, have been key factors in the slower-than-expected availability of NFC handsets.”

While it might take longer than originally expected for NFC handsets to roll in large numbers, Collins says that once they do, the market will develop rapidly. “When deployments begin we will see significant numbers of handsets shipping in a short span of time.”

Juniper Research expects interim services that work on non-NFC handsets to bridge the gap in the meantime, including use of m-coupons and embedding m-payment capability on removable memory cards.

Mobile banking to hit billions

As a result, the firm still expects a buoyant m-payments market to emerge over the next three years, and recently predicted revenues from NFC transactions would grow from $8 billion in 2009 to $30 billion in 2012. It predicts the number of users accessing mobile banking services will hit 1 billion in 2013, up from 67 million in 2008.

For firms like Visa, which is backing O2’s Wallet service, the revisions are not unexpected. Mary Carol Harris, Visa’s European head of mobile, notes that it usually takes time for new technologies to be integrated into handsets. “Traditionally this stuff doesn’t [happen overnight],” she says.

feature

Harris says the faster mobile data rates from 3G/HSPA networks have improved the customer experience of mobile payments, and that the rollout of contactless payment options on credit cards will help with consumer awareness and acceptance. “[There’s] a lot of activity around contactless on cards,” she says. “The infrastructure is being rolled out,” referring to work Visa is doing in the UK, Turkey, France, Italy, and Portugal. “[That] same infrastructure can be used [for phones].”

Liisa Kanniainen, executive director of the Mobey Forum agrees, telling mobileSQUARED that consumers have responded well to trials of NFC payments on handsets. “At the moment, there’s around 100 pilots going on around the world. The majority of feedback shows strong consumer interest.”

NFC booster

The Mobey Forum recently signed an agreement with the NFC Forum that will see the groups focus on boosting use of NFC as a point-of-sale option for handsets. “Its similar to Oyster cards, but with the [technology] residing in the mobile phone,” Kanniainen explains, adding that the Mobey Forum is “following what the analysts say,”

regarding forecasts on the number of NFC devices and overall m-payment revenues.

NFC will most likely be used for localised payments, Kanniainen said, which is one of four mobile financial transaction types the Forum anticipates will develop. With the other three being remote payments, mobile banking, and trust services.

Remote payments which are most likely to be used to handle payments for mobile applications will be covered by existing SMS and mobile data billing systems, while banking and trust services will require use of a PKI-based system of passwords and codes.

Operators need convincing

Technology issues aside, a lot of work still has to be done to convince operators of the benefits of enabling mobile payments. Andrew Bud, executive chairman at billing technology firm mBlox, points out the basic psychology of a mobile carrier is direct contact with the customer. “[They’re] fundamentally a retail-focussed business,” he explains, adding that carriers “struggle to accept a loss of control,” of the mobile end-user.

Apple got round the problem by offering

carriers exclusive rights to sell the iPhone, and that might make it easier for mBlox to sell its Sender Pays service to carriers.

Bud says the service takes the business model of SMS and applies it to mobile content. Rather than pay data charges to receive new applications, users would pay only for the services themselves. Operators would then bill developers for the data traffic.

The benefit is that operators can glean more value from their expensive data networks. “Operators have a monstrous problem coming… Just like consumer ISP’s, they [operators] are cut out of the value chain,” Bud says. “Sender Pays give operators that value. They can bill increasingly rich content providers.”

Bud says changing the business model would make m-payments more attractive to carriers, noting that transactions ranging from paying for film tickets, mobile advertising, and e-ticketing are already technically possible, but are under-utilised by operators who struggle to see the added value at present.

michael@mobilesquared.co.uk

In the next issue...

feature

Mobile advertising one year on: where has all the money gone?

Company Feature on Airwide Solutions

Consumer research on the mobile Internet

Best Bits

Data2

The world’s most expensive data plan: how the automotive industry is driving into the mobile space

6

data2

Italy’s mobile Internet boomThe Italian mobile market is one of Europe’s most vibrant, primarily because over half the population possesses more than one SIM card. Italy has a little under 59 million mobile subscribers, yet a mo-bile penetration of 153% accounting for around 90 million subscriptions.

A recent survey earlier this year – by an undisclosed party of the Italian mobile market revealed that 13% of subscribers used the mobile Internet in 2009, ap-proximately 7.6 million.

That places Italy behind the UK, the most advanced mobile Internet market in Europe, and provides some indication that the survey results are an accurate reflection of the marketplace.

The survey results are further support-ed by research released by eMarketer in October 2008 claiming Italy had 25.3 million Internet users, with a little over 10 million households with broadband. This suggests that Internet usage trails the most advanced markets, like the US and UK, and is a further reflection of mobile Internet penetration in Italy.

But this looks set to change. Research by mobileSQUARED reveals that Italy now has one of the fastest growing mobile Internet user bases across Europe and is expected to maintain this growth over the next five years.

mobileSQUARED projects that the number of mobile Internet subscribers in Italy will increase to 30.1 million by 2014 – almost 50% of total mobile subscribers.

Of those existing Italian mobile Inter-net users, the survey reported some 6 million connect approximately 10 times per month for an average session of 11 minutes, or 110 minutes per month. That means that the majority of users are

considered heavy consumers. Although 50% of users connect via mobile Internet to access emails, one-third access news sites, and 14% access social networks, around 90% of users visited their opera-tor’s portal.

While the Italian mobile Internet is not as open as the UK, for instance, the 10% of users avoiding the operator portal are most likely to come from smartphone users. That would equate to 760,000 smartphone users enjoying the open Internet.

However, a Nielsen report out in Sep-tember states that Italy has the highest smartphone penetration across Europe with 28% compared to 23% in Spain, 12% in the UK and Germany, and 11% in France.

What is not clear is whether the 28% refers to subscribers or subscriptions. Assuming it applies to subscribers, then 16.5 million users own a smartphone in Italy. And that 10% of open Internet

users, stems from 4.6% of smartphone users.

Smartphone users are unquestionably the heaviest mobile data users and it is these users that are believed to be contributing to the phenomenal global increase in mobile Internet usage.

Yet the data from Italy implies that this trend is yet to really grip the Italian smartphone users. Even if all of Italy’s mobile Internet users are smartphone users that would still leave 8.9 million smartphone users yet to connect to the mobile Internet.

It is the smartphone users that will drive mobile Internet usage and provides a transparent explanation as to why mo-bileSQUARED’s forecasts for the country are so buoyant.

nick@mobilesquared.co.uk

MOBILE INTERNET USERS

source: mobileSQUARED

company feature

Putting the Smaato thing into mobile advertisingMobile advertising is coming of age, as a raft of new application stores prompts carriers and developers to seek new ways to encourage users to download content and services onto their phone.

The concept has been around for several years – almost as long as adverts on web pages, but it has proven to be a tough sell because regular web adverts simply don’t translate well to the small screen of a mobile phone. Users consider the ads to be intrusive, and the bandwidth required to display moving advertisements was too great for operators to see the benefits.

App stores have presented a new opportunity for mobile advertising, which is good news for firms like Smaato that boast in-app advertising capabilities among its box of tricks.

The privately held firm was founded in 2005 with backing from venture capital firm aeris CAPITAL, and considers itself to be in a good position to help applications developers and publishers because it started out as a mobile app developer itself.

“First, we had an application to show adverts before and after calls that was developed for carriers,” Harald Neidhardt, chief marketing officer and co-founder of Smaato, told mobileSQUARED, adding that it began to evolve into an advert aggregator in late 2006/early 2007.

Swiss carrier Swisscom trialed Smaato’s in-call advertising application in 2007,

and enjoyed a response-rate of 15%-23% for the post-call ads, a huge response considering the click-through rate of traditional web adverts is typically about 0.01%.

The challenge Smaato faced is that its trials with Orange, Swisscom and Telenor’s “payground” came before the market was ready for mobile advertising. “We were a little too early in some instances, but now have a built a platform, that addresses the open mobile Internet as well as applications and now have a reputation,” Neidhardt says.

That platform is SOMA Smaato Open Mobile Advertising. SOMA is an advert optimization platform that handles mobile web and widget adverts, as well as in-application ads. The server-based platform uses XML- and HTML-compatible open APIs, and works with Android, BlackBerry, iPhone, Java ME, Palm, S60, and Windows Mobile operating systems.

SOMA is compatible with mobile web and widgets, and can handle live ads in mobile apps and games, on browsers, in-calls, on SMSes, and e-mail. It is connected to more than 30 ad networks globally, sending adverts to 215 countries.

“We’re focused on helping individual mobile publishers and application developers, that want to have a higher return on their mobile audience by monetizing their complete content inventory,” Neidhardt says (see fig.).

That approach means Smaato can offer multiple adverts to independent developers and publishers, with one technical integration without the need to close contracts with several traditional advertising networks. By working on a revenue-share basis optimized for the publisher’s end, Smaato should offer the apps firms better value than traditional advertising networks.

Focusing on the brands of the value chain means ad networks aren’t as committed to the applications firms as they need to be. Indeed, Smaato maintains such networks work harder for the advertiser “buy-side” than the developer (“sell-side”), resulting in lower CPMs (cost per thousand) for applications firms.

Some developers have also started to work with multiple ad networks, linking

8

them together like a daisy chain. The result, Smaato says, may be poor user experience of mobile advertising, caused by network latency and the difficulty small developers in particular have in assessing which ad networks are best for the multiple local markets they may serve.

Smaato says SOMA can offer a better fill rate – the percentage of ads available versus the number of ads requested – than single ad networks, because the platform optimizes the inventory automatically for adverts available depending on geography and pricing by sourcing multiple ad networks per requested advert.

It all sounds great, but as is often the case in mobile, the term ‘build it and they shall come’ doesn’t always apply.

To boost interest, Smaato is running its second annual Mobile Advertising Award, which aims to establish which ad-enabled mobile content is best. The winners will benefit from individual meetings with leading venture capital firm partners, and an all-expenses paid trip to next year’s Mobile World Congress, including a booth at the event.

“We’re trying to help developers and publishers gain recognition,” Neidhardt explains.

The venture capitalists on-board for 2009 are Tim Draper of Draper Fisher Jurvetson, Innovacom Venture Capital’s Frédéric Veyssière, Niall Davis from aeris CAPITAL, Mark Kvamme of Sequoia Capital, Accel’s Rich Wong, Jörg Sievert from SAP Ventures and Tim Chang from Norwest Ventures.

The contest attracted 100 entries in 2008, and Smaato hopes it will attract even more in 2009 after splitting it into three categories, comprising the best iPhone app, mobile website, and apps or games running on any other platform.

Neidhardt says it makes sense to offer an iPhone-specific award, because Apple has set the standard for mobile applications. Such is the importance of the iPhone to Smaato that is has developed a version of SOMA specifically for the device. Neidhardt hinted the firm might do the same for Google’s Android, now that the platform is “gaining ground,” with

big-name vendors including Sony Ericsson, Samsung, and LG Electronics.

However, the firm could face some hurdles when it comes to Android, because Google is one of its main rivals in the advert aggregation business. Neidhardt says another major competitor is Admob, though he says Smaato is in “co-opetition,” with that firm, because they are each working together to grow the market for mobile advertising. “[It’s] the same with Buzzcity,” he adds.

Such ‘co-opetition’ means the market for mobile advertising is ready to take off, Neidhardt says, predicting an explosion in the next two years. “With ease-of-use, clear revenue cuts, and guidance [to advertisers], the whole ecosystem breaks loose.”

That guidance for advertisers will be an important step, Neidhardt says, because they must understand the potential for mobile adverts as improvements to handsets see consumers engage even more with their devices.

“[In] our view, adverts and branding have to push the envelope harder for engaging rich media formats,” he says, noting that PC users are already engaging with short film adverts. Smaato’s job is to work with industry associations like the Mobile Marketing Association to convince big brands that mobile advertising is something they should do.

Unusually for an industry focused on the ‘youth’ sector, Neidhardt expects mobile advertising in its existing format to be an easier sell for users in the 25-34 year-old age bracket than it is for the 16-24 year olds. “Young people are very engaged with their phone and in mobile social communities but a lot depends on their contract,” he says, pointing out that younger users are perhaps still mostly engaged with text messaging.

Older users have grown up with the Internet, and so are possibly more amenable to the idea of mobile advertising. And that’s before you consider that older users are more likely to have a monthly mobile data plan, which makes it easier to get the ads to their devices in the first place.

michael@mobilesquared.co.uk

Smaato Fast Facts

Smaato Inc. is based in Redwood Shores, California. The company is privately held

and was founded in 2005 by an experienced International management team. The European

R&D headquarters are in Hamburg, Germany.

MANAGEMENT TEAM

Ragnar Kruse, CEO & Founder

Harald Neidhardt, CMO & Co-Founder

Marc Junker, CIO & CTO

Joerg Anhalt, SVP Mobile Publisher Development & Monetization

Petra Vorsteher, EVP, Strategic Alliances & Co-Founder

Oliver Reiss, VP Finance

Marc Theermann, VP Business Development

SELECTED RECENT NEWS

October 07, 2009 – DialPlus, the winner of Smaato’s Mobile Advertising Award in 2008,

has released their first commercial DialPlus application, which is now available via T-Mobile

USA’s web2go service on a variety of Windows Mobile and Blackberry Smartphones.

June 18, 2009 - With some key hires the leading mobile ad optimizer Smaato is growing

stronger to support their partners globally. This spring Smaato could welcome its 30th

team member. Marc Theermann is new Vice President Business Development at Smaato.

Smaato also hired Oliver Reiss as new Vice President Finance.

February 10, 2009 - MocoSpace and Smaato, announced a new strategic partnership

for mobile advertising. MocoSpace (www.MocoSpace.com) has more than 5 million

registered users and 2 billion monthly page views. The US-focused mobile social site was

recently ranked No. 1 in mobile entertainment by Hitwise (www.hitwise.com), an independent

market research firm.

company feature

Join the research revolution at the mobileSQUARED Roadshow

Research

mobileSQUARED is hosting ‘Taking Internet Mobile’, a half-day masterclass seminar to deliver expert insight on the UK mobile market and answer key questions for any brand wanting to make mobile a successful part of their communications strategy.

‘Taking Internet Mobile’ is based on mobileSQUARED’s primary research and will deliver the results of the most comprehensive piece of research yet available on the UK mobile market. We have gathered insight and data from over 75 companies which will provide granular insight into the UK marketplace for the next 5 years in terms of both market size and consumer behaviour.

mobileSQUARED is in the process of conducting extensive mobile market research. So far our research has included:

GroupM, LogicaCMG, Acision, O2, T-Mobile, Tekelec, Airwide, Reuters, TrinityMedia, Fox Mobile, Unanimis, 4th Screen, Player X, RealNetworks, ROK Entertainment, Mindshare, MediaCom, IAB, WeLoveMobile, Vodafone, Bango, Play123, NetBiscuits, Opera, Openwave, Novarra, GetJar, Volantis, Nokia, Harris Interactive, Femto Forum, Qualcomm, Smaato, Velti, Disney, Movenpick, Orange, Airvana, Mobile Marketing Association, Wapple, Sony, GraphicoDMG, Cambridge Broadband Networks, Ericsson, ADC,

It’s not too late to be included in the research. Contact nick@mobilesquared.co.uk asap.

This seminar will bring together a unique panel of speakers from senior brand marketers at Sony Music, Vodafone, Microsoft, Reuters and Movenpick Nestle, to research partners

Lightspeed Research and Trendstream, and mobile and agency experts including Ogilvy Worldwide, Mediacom, Bango, and WeLoveMobile. Hear directly from senior marketers how they harness the power of the mobile Internet to achieve ROI.

The full research report is included in the delegate cost and will be available to all seminar delegates to take-away after the event.

Seminar content: ‘Taking Internet Mobile’ will answer these key questions;

• How to use the mobile Internet to better engage your customers - improve brand awareness, customer marketing, and lead generation

• How to successfully integrate mobile internet into your communications strategy and achieve ROI

• How brands and businesses can use mobile social networking to communicate with consumers

Seminar costs £350; including half-day event delegate pass + full research report to take away + post-seminar networking event.

Book your place by clicking here

Taking Internet Mobile: UK, the strategic report will be available to purchase for £595 from November 6th.

Details of the mobileSQUARED Roadshow 2010 will be unveiled on November 5th.

www.mobilesquaredroadshow.com

Hear how major brands can get ROI from18 million UK mobile Internet users

1pm – 6pm,November 5th 2009Institue of Physics, 76 Portland Place, London

m2

ResearchMobile Internet projections, revenuesand forecastsNick Lane, Chief Analyst, mobileSQUARED

Consumer mobile Internet insightTom Meyritz, Director, Lightspeed Research

Mobile social networking insightTom Smith, Managing Director, Trendsmedia

To register go to:

www.mobilesquaredroadshow.com

Research, Reportand Briefing just

£350+VAT

SpeakersGraeme Ferguson,SVP Digital,Sony Music

Mike Godwin,UK Managing Director,Mövenpick

Alexandra Mecklenburg,Global Brand Director,Ogilvy Worldwide

Hugh Griffiths,Director of Mobile,Microsoft

Mark Curtis, CEO,Flirtomatic

Sarah Evans, Head ofCommercial Partnerships,O2

Ben Scott-Robinson,Creative Director,WeLoveMobile

Gerry Griffin, CEO & Founder,Skill-Pill M-Learning

Nick Lane, Chief Analyst,Managing Director,mobileSQUARED

Graham Darracott,Managing Director,Digital Architects

Media Partners:

Sponsors:Platinum Sponsor:

Gold Sponsor:

Bronze Sponsors:

Brand Sponsor:

Produced by:

Mobile squared A4 ad_revised 18/9/09 3:26 pm Page 1

consumed2

The inherent value in providing a loca-tion or navigational service to a con-sumer on his mobile device when on the move and away from a PC is one of the clearest user cases of all services on mo-bile. Frustratingly for the mobile industry, is that the majority of consumers do not want to pay for the service. Navigating around the issue of price is undoubtedly the biggest hurdle for the LBS industry,

Clearly, their expectations have already been set by SatNav devices which require a large one-off payment only. For up-to-date, real-time traffic information, consumers have the option to upgrade and pay for a subscription service, gen-erally starting from £2.50 per month. While there is no available data on the success of these navigation subscrip-tion services, the latest research on the mobile industry maintains the notion that the vast majority of consumers want location-based information for free. (And just to clarify, when referring to loca-tion-based service throughout the article, for simplicity this includes navigational services also.)

As always, mobileSQUARED has teamed up with Lightspeed Research to survey a na-tionally representative sample of the UK public on their views of mobile location-based services (LBS).

Almost 53% of the UK population are yet to use location-based services. Of those that do use LBS, the more tradi-tional SatNav devices dominate with

31% of respondents using the likes of TomTom and Garmin. Just under 7% of respondents use only their mobile phones for LBS, while 9.5% use a combination of SatNav and mobile. The over 55s are the highest users of SatNav, while it is the 18-34 year olds that are most likely to use either their mobile device, or both their mobile and SatNav.

The research certainly indicates that there is an untapped demand for LBS on the mobile. For instance, approximately 30% of respondents knew that their mobile device was location-enabled, compared to 40% that said that their device was not location-enabled. The remaining 30% did not know. Thirty percent of users represent a high level of awareness of what is a reasonably ad-vanced mobile data service. Pure specu-lation, but the rise of Google Maps and the simplistic advertising of the iPhone has most likely aroused consumers’ inter-est in LBS, which can only be a positive development.

It was not until consumers were asked which of the suggested services they had used on their device, that the data became more insightful. For instance, 75.8% had not used a location-based service on their mobile phone. Of the 24.2% of respondents that had used location-based services on their device, the majority had used more than one service. Not surprisingly, navigational and mapping services were the most popular,

closely followed by location-based social networking and dating, and service find-ers, such as restaurants, bars and ATMs. The least popular service was find-a-friend or child finder.

A breakdown of these figures reveals that males are more likely to use the navigational and mapping services com-pared to females, though females are more likely to use the social networking and finder functionalities of the device than males.

Clearly there is a demand for loca-tion-based services and it looks set to grow on mobile, but the real stumbling block is establishing a business model to support the service. Only 11.3% of users are willing to pay for the service, of which 3.7% are prepared to pay a monthly subscription, and 7.6% would accept paying for specific information on a usage basis. A further 20.10% of us-ers would welcome free location-based services with advertising which is 100% relevant to their real-time location and mobile search. The remaining 68.6% want location-based services free and without any catches, like advertising. Fe-males were more opposed to paying for location-based services and the concept of associated advertising than males.

The perceived threat of advertising on mobile phones also heavily influenced the results of whether consumers would be willing to provide their location to various recipients. Almost 60% of

Lost: Location-based services business model

12

respondents would share their location with family members – though 40% would not. Similarly, 42.4% of respond-ents would be willing to let their friends know their existing location, compared to 57.6% that would not. Only 5% of users would be comfortable sharing their existing location with third-party compa-nies, leaving 95% against the concept.

It is this last revelation that raises serious doubts for mobile advertising. One of the real plus points of mobile is its ability to deliver relevant, contextual and real-time adverts, and that requires utilising the user’s location. But if 95% of users do not want third-parties aware of their location, this could seriously jeopardise one of the most compelling motives for brands and business such as restaurants to use the mobile medium.

The iPhone has addressed this issue head-on by asking the user’s permission to use their location when they activate a particular location-based application. While this ensures that the consumer is in control, it is another hurdle in an already fragmented marketplace to reach an end user. This could also alter the mindset of those brands already looking to capitalise on location-based advertising. If only 5% of mobile users will accept third-parties using their real-time data, this could severely hamper the reach and scale of a particular campaign or promotion.

And this is where the industry needs to get smart. Paid-for location-based services will remain niche at best. The lack of a viable mass-market business model for location-based services would suggest an ad-funded model, but even this will be rejected by consumers un-less there is an obvious benefit, such as a voucher from a relevant restaurant or high-street retail chain.

The obvious route for LBS to attract a mass market will be to mirror that of the Amazon Kindle, the eReader that provides wireless access to the Kindle Store housing over 300,000 publica-tions. The data costs to download each publication are invisible to the consumer because they have incorporated in the purchase price.

nick@mobilesquared.co.uk

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Mobile browsing consumer tolerance on the upConsumer tolerance towards mobile browsing is increasing, according to personalisation specialists ChangingWorlds. Although the Amdocs-owned company could not divulge the identity of the operator, Stephen Oman, worldwide director of sales engineering, Amdocs ChangingWorlds told mobileSQUARED that one operator will now lose 25-30% of mobile browsers with every additional click away from the mobile portal.

This represents a dramatic leap in consumer acceptance regarding the mobile medium as a viable platform for browsing. Two-years ago ChangingWorlds reported that consumer drop-off-per-click was 50%.

In 2007, content providers or publishers located 10 clicks away from an operator portal homepage receiving 1,000,000 visitors a day would potentially be competing for 977 users, based on 50% consumer-leakage-per-click. Applying this latest figure from ChangingWorld’s and those 977 users have now increased to 56,314 (after 10 clicks from the operator portal homepage).

In the unlikely event that a content provider, for example, is 10 clicks from the original mobile browsing access point, then today they are competing for 5,764% more users than was the case in 2007.

This suggests that mobile sites can now become denser in content, not only with less reliance on being positioned closely to the operator portal, but accessibility and

discoverability issues that have blighted the consumer experience to date, are finally becoming less of a hindrance. It also provides an ideal opportunity for brands going direct-to-consumer and easing the reliance on operator portals for content providers and publishers to reach a mass market.

Of course, ChangingWorlds focuses on personalisation and the ability to deliver relevant and contextual content in the real-time. “It’s all about the consumer data an operator has,” says Oman. “If you have too much information, it’s hard to work out what is and is not important. And then make that data available at the time you need to make that decision. Once you have that data you need to know what to use and when.

For Oman, it is large data warehousing built to house large data analysis for strategic decisions, versus the ability to make real-time tactical decisions based on what the consumer needs. “O2 UK is one of the leaders,” for applying consumer data, Oman says. “We’ve been implemented on O2 Active portal for some time. O2 wants to have their landing page on the browser as the jumping off point for the mobile Internet. Mobile Internet will be much bigger than any one operator portal.”

Using ChangingWorlds’ technology, Oman claims that O2’s mobile browsers would each receive a personalised Active homescreen, based on preference, behaviour and context. He said that if all 20 million of O2 UK’s users were to start browsing simultaneously, they would each view a different Active homepage.

“Our solution doesn’t try to fit people into predefined segments,” said Oman. “People are multi-dimensional.”

45% of online agencies moving to mobile in 2 yearsAlmost 50% of online marketing agencies will look to incorporate a mobile strategy into their client’s campaigns within 24 months, according to a survey conducted by mobileSQUARED at Ad:Tech London at the end of September.

A total of 27.5% of companies surveyed will look to use mobile within 12 months, with a further 17.5% of online agencies likely to implement a mobile element to their campaigns within 24 months. A further 25% of agencies anticipate using mobile within three to five years.

While it is encouraging that a significant number of agencies already see the benefits of mobile, the remaining 30% of agencies surveyed are yet to recognise the benefits of mobile. Twelve percent of agencies did not intend to use the mobile channel at all within the next five years, while 18% had already experimented with mobile and were unlikely to revisit the channel within the timeframe outlined.

According to mobileSQUARED research, there are already 15 million mobile Internet users in the UK, and this figure is expected to undergo exponential growth over the next five years. While the number of mobile users in 2009 falls below the 38 million PC-based Internet users in the UK, mobile is an ever-present channel for consumers, unlike the PC.

from the web

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15 years to grasp online now mobile comes alongIt’s taken 15 years for brands and agencies to understand the workings of the Internet, but the mobile channel represents the greatest challenge for media to date.

“Mobile marketing presents a far greater challenge to brands and marketing over the next 10-15 years, compared to what we were facing with the Internet,” said Mike Parsons, managing director at Tribal DDB, speaking at the Mobile Marketing Association’s Brand and Agency briefing in London recently.

Part of the problem, according to Parsons, is that brand owners are not native digital users and have no understanding of how Generation Y is using digital media.

“The serious decision makers within the brand owner are from a different age and not the native digital age,” said Parsons. “As you get into serious campaigns, projects and services, you are dealing with decision makers who are not digital natives, and their point of reference is often what their kids are doing.”

As Parsons highlighted, the advertising agencies and online world are aware of the potential of the mobile channel, the problem is that it has not been clearly identified in a manner that can be explained to the decision makers. Or at least, until now…

Indian market to be worth $2.37 billion by 2013India is set to become the leading global market for mobile content by 2013 according to the latest research report from mobileSQUARED. The report, India: Birth of a mobile content superpower 2009 – 2013, forecasts that the total market for mobile entertainment and content will reach $2.37 billion by 2013, up from $835.78 million in 2009.

The Indian mobile market consists of more than 400 million mobile subscribers, which is growing at 15

million new connections per month and will hit 700 million subscriptions by the end of 2010. This phenomenal rate of growth is fuelling huge new revenues in the mobile content and entertainment market, according to the report. This growth comes despite delays in the roll out of 3G technology.

The continuing growth in subscriptions, and the deployment of 3G expected from late 2009 onwards, is expected to deliver massive growth in mobile voice and value-added services (VAS) revenues for the leading operators and content providers. The continued growth in the take-up of ringback tones, games, graphics driven by strong mobile Internet usage will drive the revenues for mobile entertainment services.

Licenses for 3G spectrum are not likely to be issued until late 2009 after a series of delays by the Telecoms Regulator of India (TRAI). But the inherent increase in bandwidth and lower of per-byte data costs associated with 3G technology will become essential to the ongoing development of the content and services market by reducing barriers to entry for the mass market.

However, the report warns that the market for content in India is at risk of being stymied by highly interventionist operators, who take a huge proportion of revenues from mobile content sales and dictate pricing policy.

Research shows that the operator take of content revenues is normally more than 70% of on-portal revenues, or content monetised through premium SMS. Operators’ strategy in India is in marked contrast to the relatively open content-driven world of the Apple App Store and Google Android devices that are dominating the thoughts of operators, OEMs and consumers in Western markets.

Sponge soaks up high response rateA mobile marketing campaign in Nigeria has generated over 7 million responses over a three-month period. Mobile marketing agency Sponge carried out the campaign earlier this year on behalf of Etisalat, the UAE network operator that launched in Nigeria last year, as part of a $1 million prize giveaway.

On average, almost 78,000 daily responses were generated over a 90-day period on the back of a campaign comprising text competitions, loyalty scheme, a viral scheme and an mTicketing solution for a series of live events and TV shows.

“It is clear is that this has proved much more effective than Internet-based promotions as mobile is more widely accessible and more reliable,” Dan Parker, chief executive of Sponge, told mobileSQUARED.

Nigeria has overtaken South Africa as the continent’s largest mobile market with over 68 million mobile subscribers. Mobile has rapidly become the nation’s primary means for communication, with mobile accounting for an estimated 90% of all phone lines in Nigeria. What’s more, 70% of browsing in Nigeria is on a mobile device.

Aside from the response rate, the campaign has also led to a very significant jump in new SIM activations and ARPU for Etisalat, though actual figures have not been released.

“We’re not aware of any other campaigns like this before, there has been some big brother style TV voting in Nigeria, but in terms of mobile marketing we believe this to be a first,” Parker added. “We hope - and believe - this will be a springboard for mobile marketing in Nigeria.”

from the web

quality. Users too have become ever more comfortable in capturing and sharing ‘moments’ via their handsets.

While high-end handsets such as the iPhone have provoked a reaction amongst consumers, operators are slowly becoming less reluctant to push mobile video, with poor network capacity having held back the market for video in the past. It is true that the vicious circle of who was to pay for the integration of new service first and make money later scared many operators.

But as High Speed Packet Access (HSPA) services have rolled out across Europe, offering consumers faster downloads and operators better network capacity, the potential for a sustainable mobile video business model is in sight. Operators now have the bandwidth to experiment with different business models and a broader willingness to push forward video than they ever had before.

Business models

While the first wave of mobile video was all about the made-for-mobile short, the burgeoning amount of content on the wireline Internet is having a profound effect on the programming now being made available for mobile. The reality is that a vast amount of short form video that is available on the web is suitable for mobile and few industry players now believe that the economics stack up for

The mobile industry has always had one eye on the future, a technological- or service-based advancement that will generate an unequivocal buzz across the world of wireless and associated media, writes Ed Barker. Over the last five years, this buzz has been attached to the likes of TV, search, Internet, video and advertising, each becoming labelled as the next big thing for mobile.

Despite the poor start for mobile Internet back in 1999, almost a decade later and it is starting to become a phenomenal success globally. And as the mobile industry once again casts an interested eye towards video, the rise of smartphones and high-speed networks has finally created an environment capable of delivering a good user experience for mobile video.

Bytemobile recently revealed to mobileSQUARED that as much as 40% of Western European operators’ network traffic is now video based. Forecasts published by mobileSQUARED suggests the US and UK mobile video markets will be worth US$444 million and US$29 million by the end of 2009, respectively.

Video, once the great white hope of the mobile industry, has been much maligned in recent years. Low penetration of video-enabled handsets and consumers seemingly unwilling to risk the bill shock associated with downloading mobile video clips have contributed to a sector in limbo. The new

data is a clear indication of the return of video to the thoughts of operators and consumers, offering a new hope to content providers seeking revenues from mobile video.

While past hype surrounding mobile video failed to materialise into revenues for operators, the introduction of the iPhone, Google’s Android and other smartphone devices has been pivotal to the recent growth in mobile video. Not for the first time, Apple has been central to change in the mobile industry; iPhone users contributed to a 400% increase in mobile uploads to YouTube. It’s a level of usage that has opened the eyes of other players in the industry to the potential of mobile video.

This is in stark contrast to the first generation of mobile video, which failed not because there was an inherent lack of consumer demand but because of the high data costs operators were charging for what amounted to a poor user experience, with low resolution downloads on a small screen.

In a move that is typical in the mobile industry, simply because it could be done, operators launched video into the market. Early adopters were forced to pay a premium, and everybody else to simply chose to avoid video.

Not so today, with the majority of new handsets offering a camera which is increasingly capable in terms of video

The fall and rise of mobile video

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mobiwancommissioning unique mobile content.

The popularity of mobile social networks is also driving the distribution of vast amounts of user-generated content. Devices with better screens and cameras have encouraged more peer-to-peer sharing – a better consumer understanding has developed not only of how easy it is to not only view a video clip on a mobile device, but to capture and share one too.

But does the preponderance of user-generated video mean the end to premium content in the value chain? The overwhelming success of BBC’s iPlayer service on the iPhone suggests that users want high quality programming – but perhaps only if it is free. The mobile industry may have to find success by exploiting the opportunity for associated content– such as ringtones, wallpapers and video ringback tones – or mobile advertising.

Operators’ challenges

The challenge for operators is to ensure that they remain relevant in this media-driven environment. Many carriers have simply seen video as a way of driving subscriptions of flat-rate data packages by offering media-capable devices to enhance users’ viewing experiences.

This analysis of operators’ strategy is backed-up by mobileSQUARED data. Revenue data suggests that at a typical $3 per premium download there should 148 million and 9.67 million transactions in the US and UK respectively. If this was the case operators should already be looking at ways of expanding their premium video content portfolio. That is simply not happening.

If mobile video can’t deliver revenues outside of data there should be room for linear broadcast mobile TV – so hyped by those pushing DVB-H, MediaFLO and other broadcast technologies.

Yet the models for streaming and broadcast mobile video are still being formulated, and the success of a monthly subscription model is conspicuous by its absence. Indeed, some in the pay-per-view mobile video market have slated broadcast as a “futuristic way of implementing the past.”

Even while consumers wait for broadcast services to develop, the huge growth of both premium and user-generated content over mobile networks in the past year is a genuine boon for the industry. Yet there remains a question mark over how to monetise that video.

Ad-funded video may change the environment, enabling free content to be monetised, operators to make a cut and the cost of content acquisition lowered. But isn’t that said of so many mobile content sectors? It’s a new strategy for many content video content owners too but would enable them to distribute content into multiple markets and increase the number of eyeballs. At least that’s an end goal that appears far closer in today’s market than even a year ago.

info@mobilesquared.co.uk

If the film industry can have Hollywood, and the Indian film industry can have Bollywood, it stands to reason that the mobile industry and its audience of 4 billion should get in on the “ollywood” act in one way or another. Let’s not forget those bygone days of 2005-2006 when the hype and animation surrounding mobile video the next killer app to neutralize all preceding apps was akin to Brad Pitt walking up the Red Carpet at the Oscars.

Until recently “Mollywood” was loosely defined as a sector of the Indian film industry called Kerala, according to the people’s online encyclopedia Wikipedia. A reference which no doubt infuriated the Molly Woods around the world . Now, Mollywood has officially become the term to celebrate all things video on mobile devices. Wikipedia.org defines Mollywood as “successful videos and films appearing specifically on mobile phones”.

Alright, so the hype around mobile video has long faded, and instead of Brad Pitt walking up the red carpet Larry Lamb (Who?) is a more appropriate comparison. But word on the (3G) network is that video is back, and will be back in a big way in 2010. The BBC iPlayer is a popular service not only on the iPhone, but on other smartphone and featurephones.

The fact of the matter is that consumers are watching videos (streaming and downloaded) on small devices. That is something that bodes well for the future and leaves behind the cumbersome click-fest required to access videos stashed away on the device or on operator portals. Networks and devices are finally working in tandem to deliver a compelling experience for the end user and discoverability is no longer an issue. That just leaves the content.

Users are no longer restricted by operator content deals in terms of their choice. Various xPlayer services and YouTube provide a vast selection of content catering to all demographics. The only realistic hurdle now is price.

Little is being done to change the perception of data prices to consumers who remain terrified of pressing the “connect” button on their device. Data usage has expanded exponentially over the last 12 months. But get a clear message about clear data pricing to the mobile consumer and that exponential growth will itself grow exponentially.

The obvious solution to all this is to make a mobile video.

Premium rate services doing its bit for charity and politics

walled garden

Despite an increasing regulatory burden and rising associated compliance costs, evidence has emerged over the past few months that a new confidence is returning to the mobile premium rate services (PRS) market in the UK. Organizations like Comic Relief, Coca-Cola and independent political parties like the Jury Team, are embracing mobile-centric PRS services in efforts to present audiences, consumers and voters with more convenient methods of engagement and interactivity. These developments are significant in that they signal a return of mobile PRS activity to the mainstream media and consumer goods and services industry.

Perhaps one of the most eye-catching of these from an Industry point of view was the utilisation of a new high-level premium rate tariff for mobile micro-payment charitable donations by the Comic Relief organisation which helped raise a record amount of cash for this year’s BBC Red Nose Day. Almost £8 million was raised via the new mobile micro-payment tariff on BBC’s 2009 Red Nose Day campaign, representing 10% uplift in charitable donations and highlighting the growing importance of the mobile handset in direct response campaigns.

Charitable intentions

The BBC fully committed itself to supporting and promoting a new £5 and existing £1 consumer drop charge

promoted via short codes, across BBC Radio 1, BBC 1’s Comic Relief: ‘Funny For Money’ and ‘Let’s Dance’, BBC 2’s ‘Top of the Pops’ and BBC 3’s ‘Corden and Horne’ programmes. There were also parallel outputs from BBC Radio both national and local all driving awareness including Radio 1 DJs Chris Moyles’ and Fearne Cotton’s climbing of Mount Kilimanjaro.

BBC Interactive Technical Advice and Contracts Unit (ITACU) supported Comic Relief’s work with key suppliers in the premium-rate value chain, including all of the mobile operators, and mobile aggregator Mobile Interactive Group (MIG). The parties succeeded in allowing mobile shortcodes to be promoted on TV and radio and for all of the money to be donated to Comic Relief.

Claire McLaughlin, commercial manager at BBC’s ITACU, says that the above examples are good examples of where innovation can result in stunning success. “In the first minute that the shortcode was promoted on BBC, over £1m was raised. This demonstrates the power of mobile in direct response media and the simple viewer proposition of texting to donate obviously works,” says McLaughlin. It’s also worth noting that the BBC did not receive any viewer complaints, and bad debt was well below the expected level.

The use of mobile also attracted a new level of participation for Comic Relief,

according to organiser Richard Curtis: “The use of social media in this year’s campaign was huge. Mobile was working at the heart of our multi-platform strategy bringing in new audiences which weren’t necessarily available in previous years.”

However, despite the success of mobile within Comic Relief’s fundraising efforts, a new report published last month reveals that non-profit organizations as a whole are failing to make the most of mobile phones in general and text messaging in particular. Charities it seems are struggling to make sense of how to use SMS effectively. Twenty percent have tried using text message donations in their fundraising work but with little success, while 10% tried with moderate success and sadly, no one who has given it a go did so with great success, according to nfpSynergy who carried out the research. (The report can be downloaded here.)

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Charities hold more optimism about the idea of using mobile phones for fundraising than for communications such as messaging. Some charities are not prepared to take the risk of using text message fundraising with 24% of respondents stating that the text message donation technology is confusing and off-putting.

There are two main barriers which are putting charities off using mobile phones within their fundraising and communications work identified by the report. The first is the lack of knowledge within the sector regarding the mobile phone. Charities are put off by the technolog y, they are confused by the different potential uses that are available to them and are unsure of the best way to go about using them to get the best results.

The second major set-back is the net charges from the mobile phone operators, taken from every text message donation to charities, which makes small donation amounts from the public even smaller.

Mobile operator 3 is an enthusiastic supporter of reforming the way that charities collect donations via mobile micropayments. “Mobile networks should support high profile charity events by enabling the highest amount of pass through of a consumer’s donation as is possible,” Rory Maguire, head of payment services at 3 UK says. “We now have the ability to pass through VAT, that would have previously been deducted and by utilizing Internet browser capabilities on modern mobiles, charities can collect other information from users that enable a gift-aid uplift to the donation.”

The report concludes that with the advent of low-cost/no-cost text donations, this could open up a renaissance of direct response public advertising for charities as more and more ways are found to use shortcodes to defray the costs of awareness raising work. They predict that text donations could be raising nearly £100 million a year by 2014. A figure that should help get the operators’ attention.

“The mobile success in Comic Relief’s

Red Nose Day campaign clearly demonstrates what can be done if all parties work closely together,” AIME’s chairman, Edward Boddington comments. “Premium rate has a significant role to play in charity fundraising as it is so simple to use. The ability to handle a large number of texts at any one time means that charities can promote short codes for donations with confidence.”

It is not only charities that are starting to use the power of mobile to disseminate messages and raise awareness. The world of politics is starting to showcase mobile, and none more so than in the run up to the US Presidential election in 2008.

Politics for the mobile masses

While some individual politicians are making impressive forays into using the web and social media platforms to mobilise their campaigns and reach different audiences, it still seems that most of the parties are only just dipping their toes in the water, compared to President Barak Obama’s election campaign last year.

Although all the main parties increased their online activity in the recent European Union and local elections in an effort to bring people closer to the organisation with compelling and engaging content, one new party The Jury Team – went much further by providing a mobile voting platform enabled by the Sponge agency, so that constituents could actually select their MEP candidate.

The Jury Team is a non-partisan political platform aimed at making it possible for independent candidates from the general public to stand for political office. Launched by former Conservative deputy chairman Paul Judge last March, this platform has embraced online, social media and SMS as a way of promoting and engaging the public in “web 2.0 democracy”.

“The use of technology in the Obama campaign gave us some ideas about opening up the election process and we used social media to profile our candidates,” says Judge. “We held ‘hustings’ on our website, via Twitter

and Facebook to engage voters and then provided a mobile shortcode so that people could select their preferred candidate by SMS.”

Sponge provided the messaging infrastructure and managed connections and verification with all five MNOs, ensuring that constituents in 11 UK regions could choose their candidate via one vote per SIM card. Fifteen thousand constituents who used the service were charged their standard network operator cost for sending their vote in via SMS and received a Mobile Terminating message back in return, confirming the selection which was charged at £0.25. From this £0.10 plus VAT covered agency and mobile network operator charges, while the remaining £0.15 pence was used to fund future messages to the user reminding them to vote on election day itself.

Phil Gault says it had been an interesting exercise and one which proved the on-going participatory ability of the mobile platform. “It was a fascinating, but not a technically complex problem,” Gault says. “Getting involved in a movement to throw up alternative ways of engaging people appealed to us and allowed us to showcase how mobile is rising to the challenge of integrating with all other communication channels within politics.”

As politics in the UK reinvents itself, it would seem that anything which boosts one-to-one dialogue with voters will become increasingly important and Judge is looking to repeat the project for the UK General Election in 2010.

By Andrew Darling, director of communications, Association of Interactive Media & Entertainment (AIME).

For more information and upcoming events including “Exploring the Mobile Widget Universe” on October 29th, please visit: www.aimelink.org

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