Peggy adds: Talk about timing! Andrew Grill and I are both set to speak at the Location Based Services 2008 conference (organised by IIR Ltd.) on October 28^th, a day dedicated to topics including location based advertising, local search, and geo-blogging. Knowing Andrew as I do, he’ll no doubt challenge our ideas about mobile advertising and the role of location. As he should! Andrew, a recognised mobile advertising evangelist and regular contributor to MSG, draws from an extensive background in mobile advertising (he offers consulting services to vendors such as Gigafone from his office in London) and a career in location based services (he held an executive position with LBS pioneer Seeker Wireless before founding his own company). I’m pleased to have him back on MSG, and encourage you to peruse his popular mobile advertising blog London Calling, where he is also hosting this week’s Carnival Of Mobilists (highlighting the best posts from the brightest in the blogosphere, including a summary post outlining my own mobile advertising white paper).Following Andrew’s thought-provoking string of posts on the recent Mobile Marketing Association event in Budapest, I caught up with him to ask where mobile advertising is and why it isn’t further. His views may surprise you.

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Like many MSearchGroove readers, I look forward to catching up on the weekend papers over a quiet coffee. As per normal, this week I grabbed a copy of the Daily Telegraph and was surprised at how heavy it had become. It literally broke the handles off my fabric carry bag.

After sitting down with my vente latte, I sifted through the different folds to see what I would read and what sections I would rather skip. As it turned out, for my £1.60, I found I only really wanted to read the main news fold, the business section, and the glossy Saturday magazine. The rest ends up in the recycling bin -along with all of the advertising brands assumed would interest me. If they only knew!

I then proceeded to rip open the plastic sealed weekend magazine section; I was amazed at the number of inserts that were contained – all of which I discarded. In fact, I cannot recall one single advertisement. Again, not the response that an advertiser – who spent money to reach me- would appreciate. But, as I argue in this column, advertisers are not reaching us. To the contrary, the way they communicate with us (or rather, how they think they communicate with us) is outdated and ineffective.

Put another way, the traditional way of advertising is not working. And the advertising I ignore or simply throw away is proof of this. It’s a waste of money and effort, and – what’s worse – advertisers have no real way of knowing they have failed.

Charles Saatchi, co-founder of the global advertising agency Saatchi & Saatchi, once famously said that 50 percent of all advertising is wasted – but we need to know which 50 percent in order to improve it.

At first it seemed as if the Internet solved that problem. The advance of search engine giants Google and Yahoo in the late 1990s provided advertisers a new way of reaching consumers, targeting them with advertising relevant to keywords in their search queries. And let’s not forget the euphoria around email and its pivotal role as the perfect “one-to-one” marketing tool. Well, spam changed all that, and no one would regard email as a serious tool today. If you aren’t convinced, then consider Gmail – a free email service sponsored by ads. It’s touted as a great success, but when was the last time you clicked on a Gmail ad? Hmmm…I thought so.

The new object of our aspirations is the mobile phone. The logic: It’s a personal device and a lot of people take them everywhere. What a wonderful medium to deliver advertising! Even better if we can deliver mobile advertising to the right user in the right circumstance. It is a tempting scenario, and the vast majority of people – including myself – have been talking up this new medium because it has the potential to become the Holy Grail for advertisers. But mobile hasn’t happened yet. Mobile advertising budgets are single-digits, and money earmarked for campaigns is internally referred to in many agencies as “funny money,” underlining its strategic importance (or lack of it).

The bottom line: So something is broken. But we need to understand what is broken first before we can attempt to fix it.

We can start by pointing the finger of blame at ourselves. We fail to understand that mobile is mobile. It is different from all the media preceding it (cinema > radio > TV > Internet). It’s a new space with new rules.

Consider the introduction of TV. At first it was “radio with pictures” (because it followed and therefore built on the radio experience that preceded it). Advertising? In the early days of TV, this was limited to a live voiceover with a few shots of the product thrown in for effect.

And so are we about to repeat this mistake again? The mobile is widely regarded as just another screen (only smaller) and the mobile Internet is about delivering Internet content to mobile devices. I argue that mobile is much more than this, and it requires a new approach.

This becomes painfully obvious when we look at advertising. Internet advertising was all about getting the attention of the user with flashy graphics, banners, pop-ups, pop-unders and the like. We all got fed up with that rather quickly, which is why most browsers now allow us to block out banner ads.

We are tuning out because we can. And new technologies provide us new tools to make sure we only see what we want to see. To get our attention, advertising messages have to be relevant and genuinely useful. And here’s the one that changes all the rules: Advertisers have to ask before they sell.

This is the view of my friend and fellow mobile advertising evangelist, Jonathan MacDonald, a Senior Consultant with OgilvyOne. At the recent Mobile Marketing Association (MMA) conference in Hungary, Jonathan drove this point home in a powerful presentation where he outlined his 3 Ps of mobile advertising (privacy, permission, preference). You can read my comprehensive post on his presentation here.

Put simply, Jonathan’s 3Ps can be defined as follows:

· Permission - People will decide what they see/receive/engage with, so we need to ask their permission

· Privacy – People will decide where their data is and how it is used, so we need to respect their privacy.

· Preference – People will decide what content they find relevant, so inference and assumption have a limited lifespan

I imagine the first two are nothing new. The popular discussions around opt-in and data protection are early attempts to address these requirements. But preference – and accepting that people will decide what content they want. How are we going to achieve this?

Simple – we ask.

We ask consumers to tell us what they are interested in, and we provide them with a benefit for doing so – and we do this via the mobile channel. Why mobile? Because it is a personal device that research tells us the vast majority (94 percent) of us keep within arm’s reach 24/7.

So we have a suitable medium. How do we ask people for permission and learn about their preferences without annoying them in the process?

Clever companies such as Gigafone have come up with some smart approaches that tick all the boxes.

Gigafone lets consumers opt in to receive advertising, and asks them to fill out their preferences using their mobile phone. Then, when the phone rings or an SMS is received, they are shown an ad related to this profile that they have freely offered. This advertising model is also unobtrusive because it fits with our daily routine. When our mobiles ring or beep, our first reaction is to stop what we’re doing to look at the display. Now when consumers look, they see advertising that they have permitted. They are in control and Gigafone, by delivering advertising consumers themselves deem relevant, has won their trust.

But don’t take my word for it. Mobile advertising pioneers such as Blyk have long proven this model drives results. The company, which offers ad-funded mobile services to the 16 – 24 year old demographic, counts more than 200,000 users in the U.K., and recently announced plans to expand across Europe. (You can check out MSG’s in-depth analysis here.)

But the Gigafone model does more than meet the requirements of empowered consumers. It addresses the issue of measurement and the metrics by which advertisers can judge their campaign performance.

Advertisers that broadcast using radio or TV can only guess how many people got the message. And tracking conversion is even trickier. Mobile – especially if it is tied to permission – solves both problems at a fraction of the cost. What’s more, asking consumers to divulge their preferences (which the examples I’ve noted show they’re happy enough to do on a mobile phone) ensures the right person will see the ad. Now that’s a key performance metric no other media can offer.

But there will be challenges. We may be shocked to find that that some consumers (or a lot actually) may reject existing approaches used for mobile advertising because the advertising they are seeing is not of interest to them. But if we can reach the consumers who want our advertising (by asking them), then we are achieving a great deal. We can deliver advertising effectively and be assured it is indeed effective.

Think this through carefully and we may have revolution on our hands – who would have thought?

Fortunately, the signs of a movement of sorts are growing.

At the same MMA conference where Jonathan spoke, I also witnessed a brilliant keynote from Khurram Hamid, Global Head of Mobile Marketing for Procter and Gamble. When the world’s biggest advertiser, with 350 brands across 54 countries, starts talking up mobile – it is time to take notice. (You can see the full post on my blog. If you read nothing else today – you need to read this post.)

The key takeaways from Khurram’s presentation:

• Mobile vendors need to learn marketing, and marketing players need to learn mobile.
• Mobile is the first truly global direct to consumer mass medium for the 21st century.
• The planning agency should take the lead on mobile.
• Sometimes the key agencies are very slow and the brand needs to navigate outside to get things done.
• We are seeing the same attitude as with online a few years ago – and only spending small amounts on mobile.
• The media planners need to be the leaders – if you’re not going to then we (the brands) will have to bypass you.

More critical insight into the state of mobile advertising comes from Vodafone, which recently sponsored an international Mobile Marketing seminar bringing together 100 invitation-only delegates from 70 major brands and agencies. As part of the event, Vodafone conducted a delegate survey to better understand their views on mobile advertising. (For a summary of the results, check out this post on MobiAd News.)

Put simply, mobile advertising is still seen as a low priority for businesses at the moment, with 70 percent of respondents saying they allocate less than 1 percent of total budget to mobile. Of the brands surveyed, 29 percent think mobile is a top/high priority for their marketing strategy.

What are the barriers? The usual suspects: Lack of Evaluation Tools/Metrics for campaign planning; a resistance of players to free up budget for mobile; and a lack of measurement for judging campaign success.

The results confirm my argument that mobile advertising is not working (yet), and underline the need for solutions. We must fix mobile advertising – otherwise brands may think mobile is a tough nut to crack and abandon it altogether.

Let’s focus on a key complaint from brands at the MMA event, which echoes in the Vodafone survey. The industry suffers from a lack of useful data – primarily because mobile operators have so far failed to collect the metrics that matter.

Why? Because mobile operators have never needed to ask mobile subscribers the sort of questions that advertisers need answered in order to properly place their advertising. Questions like what are your hobbies, your lifestyle interests, and how do you spend your leisure time are of immense interest to advertisers. But mobile operators – whose corporate DNA is all about getting consumers to send more texts, make more calls, and consume more mobile Internet – don’t need to know consumers’ preferences, so they simply don’t ask.

Ironically, mobile operators have a wealth of data, such as the numbers we called, the destinations we browsed, the content we bought – and the time of day when all this transpired. Mobile operators might take it a step further and warehouse location information – adding more value to the data they already have.

There is no shortage of data, and, in a way, that’s the problem. Operators have stockpiles of information – just not the format or the focus that advertisers find genuinely useful.

An entire industry is built around mining the data, and many of these solutions are spot on. But programs that mine the billions of call records and make sense of them will always come up short because without the permission of consumers and the insights into their preferences (which they provide themselves, so it can’t be anything but correct), we can only second guess what people really want.

As I said before, we need to ask – not assume.

Who is going to start this conversation? Khurram from Procter and Gamble hinted that brands may make their move. Rather than wait for mobile operators to collect the right data, they may just source it themselves.

And why shouldn’t they? I would argue that brands may be best placed to ask people for permission and preference.

If we have a relationship with a brand and can see a benefit in volunteering information about ourselves (via mobile), then we may be willing to do just that. If this happens, then the currency of preference and permission will belong to the advertisers and not to the mobile operators.

Will brands displace mobile operators in this value chain? Will they wield the analytics that allow them to deliver the right ad to the right person with right results? Or will mobile operators beat the brands at their own game and kick off the conversation with consumers first?

There are no easy answers.

One thing for certain: Mobile changes all the rules. We must all recognise and apply this in earnest. Mobile is a personal device, and we have to get personal. This means developing mobile campaigns that adhere to Jonathan’s 3Ps – that start by asking people their permission and inquiring about their preferences (while respecting and allowing them to manage their privacy).

Only then, in my opinion, will the way be clear for mobile advertising to really take off.

This entry was posted on Tuesday, October 21st, 2008 at 2:50 pm and is filed under Location-based services, Mobile Advertising, Mobile Research. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.