ORANGE GAME FOR MOBILE ADVERTISING

ORANGE GAME FOR MOBILE ADVERTISING

By Sean Jackson

Advertising is gaining some traction as a champion for mobile content. But is subsidizing necessarily the way to add value?

January 2007 saw a slew of announcements regarding mobile advertising, continuing the trend established in 2006. Delegates can expect it to be a major talking point at this year’s 3GSM World Congress.

Advertising has been talked up in the past. The difference now, we are told, is that there are enough high-end handsets out there to deliver the level of quality that leading brands are happy to be associated with.

Whichever way you look at it, mobile content has so far failed to set the world afire. Proponents of advertising are promising to solve all that. How? Simple, advertising will make mobile content more affordable for the consumer.

Orange France is using a system supplied by Amobee Media in order to test the business model behind using advertising to help fund mobile content. Subscribers are being offered the option of downloading a game from games publisher Filao at a reduced price or for free, just so long as they opt in and agree to receive advertising within the game.

A number of leading consumer brands are taking part in the trial. The ads are served during idle time in between levels or while the game is loading. For a period of two months, users will have the option to request further details on each brand, either by initiating a call by opening a WAP session, or to click past the ads and continue with the game at any point. Filao has integrated Amobee’s HAPI (Handset Application Programming Interface) into its games. The HAPI is a small SDK file that enables the games to receive ads.

It’s true that, when consumers are given something for nothing, they will lap it up. Someone has to pay, though, and therein lies the problem.

Why would leading brands want to subsidize a product that only a select few were interested in buying (often cheaply) in the first place?

Dan Olschwang, CEO of search and advertising firm JumpTap agrees: “When you subsidize the content it cheapens the content. Subsidized content has a lot of hype surrounding it, and it has potential, but it is a limited potential. It is on the horizon and some operators are talking about subsidizing voice or data, but advertising is not a saviour, we’re trying to provide an upsell.”

JumpTap offer a solution that combines search with advertising. Olschwang backs the sponsored-links approach to generating advertising revenues, although he did concede that the subsidized content market does have some limited potential.

“Mobile is the only media that has not relied on advertising. So we have the luxury that users have a propensity to pay for content. First we need to ask how we layer in an ad model,” Amobee CMO Patrick Parodi told MCI, adding: “It should start with choice. If users want to pay then they can. Advertising doesn’t necessarily mean free and our system allows for that.”

Parodi pointed out that network operators play a unique role setting up a campaign. “If you compare it to the web, a destination is only able to generate advert revenues from one site. So only Google can make money on the Google site. Mobile is different, and the network operators are in a unique position. Amobee provides a service that allows for ads that benefit from knowing the user’s history,” he said.

At the time of going to press there were no publicly available statistics on the success of the Orange trial. Parodi remained bullish, claiming the revenues associated with the advertising make more than the subsidy cost. “We feel the ad model can quadruple the business,” he said.

Another network operator enjoying success with advertising is Temasek subsidiary AIS Thailand.

The carrier is using a solution provided by idle screen specialist Celltick to offer leading brands the opportunity to carry out individual campaigns. One such campaign saw Japanese automotive and electronics giant Honda broadcasting teaser messages with the aim of drawing viewer into a free to enter competition. The firm paid the carrier $1 per click-through, the campaign ran for a three week period and received, on average, 5,500 click per day.

Celltick’s CEO Stephen Dunford gave MCI an indication of the revenue split. “In situations like this a media agent will be involved, and they will generally take 15-20 per cent of the revenues. The rest is shared between Celltick and the operator. Celltick manages and maintain the service.”

When it comes to the revenue share Amobee’s Parodi advocates a tried and tested approach: “We believe that, whatever the split is at the moment, it should pretty much stay the same. The media companies own the content and that is what is being advertised against, but the mobile companies have the technical know-how to make that advertising tailored to the users across platforms, “ he said.

It seems like persuading the network operators should be fairly straightforward-consumers too are likely to ambrace this new ‘free’ world of mobile content.

It could be a little trickier persuading the brands that mobile advertising has long-term value. There are more problems than solutions at the moment, but the arrival of widespread third party brand advertising on mobile phones is almost inevitable.