In brief: In line with MSearchGroove’s ongoing and in-depth look at smart toolbars, personalized portals and the players that set the bar for these technologies, regular columnist and contributor Jim Levey shows a robust economic system (and new content distribution model) is emerging with personalization at its core.

It is no secret that the success of well-known Internet portals, whether they’re oriented towards mass media or are vertically driven, is content that is fresh and personalized.

These portals have developed large online communities by empowering users with self-service tools that enable them to create their own personalized homepages chock full of content that is dynamic, up-to-date and consistently relevant to their preferences.  This is achieved thanks to widgets that interoperate with specific applications such as search, weather, finance and social networks.

Fast forward and it’s the same model in mobile – although mobile markets in Europe and Asia have stolen the lead on North America (at least for now).

Why are operators outside the U.S. so far ahead in the delivery of content experiences that users appreciate? In my view, mobile operators, particularly in Europe, have embraced path-breaking personalization solutions that implicitly push relevant content to subscribers based on their browsing behavior. But their business objectives don’t stop at delivering a satisfactory mobile user experience (because it is personalized); they are further harnessing these solutions to deliver targeted advertising that potentially drives results.

Put the two together, (personalized mobile experiences and advertising messages targeted to users based on their content consumption), and you have the capabilities mix to satisfy users and – at the same time – create a sizeable market conditioned to accept relevant advertising. (And isn’t this exactly what brands have been waiting for?)

Put simply, by collecting and wielding terabytes of data, which reflect subscribers’ mobile Internet habits, operators can lay the groundwork for contextual ad serving.

The endgame is all about delivering users content they want and advertising they will appreciate. But these business benefits can come at a price. This mass customization requires network resources and bandwidth beyond what most operators anticipated or can afford. Clearly, users who can finally get the content they like are eager to explore the wealth of content and apps at their fingertips. This results in increased usage, challenging operators to think of new ways to generate new revenue streams (potentially to offset bandwidth costs or at least invest in network upgrades which will become a top priority if advertising on mobile becomes video-centric).

WHO FOOTS THE BILL?

Against this backdrop, the big question becomes: Who is going to pay for it all? Some mobile operators are betting on differentiated pricing and data plans (which require users the foot the bill) to solve this problem. However, this is hardly a long-term sustainable model in an age where free is the norm. Ad-supported content and business models are the way forward.

The real money is with the brands.  But, as we all know, brands are sitting on the sidelines waiting for the mobile industry to provide reach, standards, accountability and access to customer data. High marks to U.K. mobile operators who are trying to achieve this with the GSMA, but it’s a work in progress and it’s not clear if brands can wait.

So, why are operators slow to get onboard and get thinking about ad-funded models?

It’s clear: Operators are caught between a rock and a hard place. On one hand, they are sitting on stockpiles of data that can power personalization and ad serving engines.  On the other hand, while operators know brands would like to get their hands on this data, they also know their subscribers trust them to act responsibly with their personal information. Indeed, the blogosphere tells us some people are even spooked by personally relevant content and advertising. (Interestingly, many more reports show consumers see huge value in receiving content such as coupons and vouchers relevant to their location or intent to buy.)

Naturally, some mobile operators have responded to this with a wait-and-see strategy. Others, however, have turned a problem into an opportunity, using personalization solutions that anonymize customer data, to develop sharper segmentation and deliver mobile content experiences that set the bar.

These solutions make sense because they encourage subscribers to browse the mobile Internet freely, while at the same time anchoring them to their operator’s portal start page because the experience (in tune with their lifestyles) is so good. Beyond this, some personalization solutions harness widgets (in the form of a widget toolbar, for example) to enhance this experience by delivering fresh content to the handset and take the tedium out of navigating the mobile Internet.

MARKET PERSPECTIVE

What is the value proposition and how has the market reacted? I recently caught up with Joel Brand, Product Manager at Bytemobile — a provider of network-based service delivery platforms that enable the delivery of value-added servcies –  to get his perspective on this next mega-trend.

The way Joel sees it, mobile content personalization is “a subtle approach to marketing.” Subtle here means a trust-based give and take.

From the get-go this conversation – which we recall is based on a deep understanding of behavior and personal preferences/tastes — is a rewarding exchange that respects the individual and further rewards them with a fulfilling mobile experience that is perfectly in tune with their lifestyles.
As a result, the line between content and advertising blurs and the individual welcomes both because there is no noticeable difference. Both are relevant, useful and enriching. With this the groundwork is laid for an ongoing brand dialogue that can continue at other times and in other sessions. Quid pro quo.

What is the user experience when content and advertising combine? Joel offers this. “If a subscriber is browsing mobile travel sites [then] the system may push content from Expedia or Club Med.” Similarly, , if the user purchases South African jazz ringtones, the system can work with a third-party ad network to serve a marketing message about FreshlyGround, a hot band from South Africa. The possibilities are limitless because it’s tailored to each individual.

Put another way, the goal is to blend content with marketing messages in a non-intrusive fashion. The content is informative; the advertising is informative and the message is welcomed.  Advertising works best when it is subtle.

AMDOCS INTERACTIVE

Another significant player in the mobile Internet personalization space is Amdocs Interactive ChangingWorlds. The company’s solution, which is deployed in 56 top-tier mobile operators worldwide, harnesses advanced algorithms to analyze individual browsing behavior in real time and push relevant content into the portal.

I got together with Mike Lurye, Product Marketing Manager at Amdocs Interactive, to get his take on where this is going. As Mike puts it, it’s all about personalization, “but the value is in user choice.” The Amdocs approach lets users make the decisions, providing them the option to actively configure content requirements. But the system also makes decisions for the user, choosing which content to push dynamically based on the subscriber’s browsing behavior.

In practice, Amdocs Interactive features a smart icon-driven toolbar which supports more intuitive navigation and links to third-party content and services including social networks, ecommerce, search and news. All can be launched from the operator’s portal, but the experience doesn’t end there. The toolbar remains in the browser and travels with the user as they engage with these services.  As Mike puts it: “All this intelligence is logged, analyzed and optimized for a personal portal experience.”

With both Bytemobile and Amdocs Interactive, the marketing approach is subtle and the chances of success greater. This is because subscribers are in control and therefore comfortable about making personalization choices, either through configuring the widget toolbar that travels with them everywhere or by letting marketers/operators know what they like.

ROBUST ECOSYSTEM

Connect the dots, and the pieces are in place for a sustainable economic model that fosters the growth of the entire ecosystem. Why? Because aggregated and anonymous browsing behavior provides the data essential to the creation of well-defined profiles that, in turn, pave the way for brands to deliver subscribers an offer they literally can hardly refuse.

Marketers benefit because these personalization solutions provide the much-needed basis for an effective ad-supported content distribution model. The insights they provide into individual browsing behavior combined with other data points provide a consolidated view of the customer. And, as we know, delight the customer is the first rule of successful marketing.

Personalization pays for operators as well. In fact, Mike tells me one of his company’s operator customers saw as much as 20 percent uplift in revenues. It’s difficult to say whether the revenue boost was due to increased data usage, more premium content consumption, upgrades to richer subscription plans or more beneficial revenue share agreements with third-party ad networks – since the solution impacts each of these – but it’s clear that personalization had an impressive incremental effect. The same solution potentially improves mobile search, resulting in a more personal (hence useful) user experience.

And finally, it’s good news for the publishers as well – provided they forge relationships with the clever operators that have embraced these personalization solutions in the first place. By negotiating licensing and rev share agreements with these operators – ones that are willing to stream subscriber intelligence to the publisher ad servers – these publishers have the capabilities to extend the personalized marketing experience that subscribers have come to expect. No longer in the dark about their users profiles and preferences,  these publishers have the business and customer intelligence the need to serve relevant ads and sell premium inventory aimed at a high CPM audience.

THE BOTTOM LINE

While the mobile ecosystem seeks a silver bullet solution that will get brands to open their wallets and increase mobile advertising spend, some companies are growing the market by focusing on the user side of the equation. Companies like Amdocs Interactive and Bytemobile are sharply focused on the connection between personalized content, relevant marketing and personalized search. Together the companies count an installed base of more than 100 mobile operators worldwide. Do the math and those  implementations translate into tens of millions of subscribers who already enjoy a personalized portal with widgets that travel, and would likely be open to marketing messages that match their interests.

Personalized advertising is not science fiction.  It’s happening now because it must. The advent of 4G and LTE pushes operators to pursue new revenue streams to offset capital expenditures. Operators will therefore need to leverage subscriber intelligence, invest in personalization solutions and so take the lead in building an ad-supported content distribution model that works for everyone. This will surely spark interest among the marketers currently sitting on the sidelines and get the attention of the brands.

Tags: 4G, Amdocs Interactive, behavioral targeting, Bytemobile, changingworlds, Club Med, Expedia, FreshlyGround, LTE, Mobile Advertising, mobile analytics, Mobile Marketing, Mobile Video, Recommendation

This entry was posted on Monday, August 24th, 2009 at 2:32 pm and is filed under Content Discovery, Mobile Advertising, Mobile Content, Personalization. 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.