In brief:

After months of researching my chapter contribution to an upcoming book on marketing to Digital Natives, it’s increasingly clear that mobile advertising companies – and their view of “consumers” needs — must evolve.

Mobile is a fiercely personal device and people – particularly empowered Digital Natives – want content and advertising on their terms. (I purposely mix content and advertising here because they are becoming one and the same thing.)

Another shift in the marketplace: our requirement to have a say in the content/advertising we are willing to receive. This came through loud and clear in the research/interviews I conducted for Mobile Advertising Research U.K. 2009 project, a research project endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA) to expertly document the state of the mobile advertising industry in the U.K.

Among the findings (based on 1,000+ consumer online responses and 20+ interviews with operators, enablers, agencies, and brands): only 32 percent of the 1,000+ consumers surveyed had a positive attitude toward receiving advertising messages on their mobile phone. However, that number rose to 64 percent, provided people were properly “incentivized,” and 70 percent if they were incentivized and “in control” of their mobile advertising experience.

Connect the dots, as an increasing number of mobile advertising companies and ecosystem companies have begun to do, and it’s clear that the capability to provide permission-based mobile advertising (with an easy opt-in/opt-out option) could become table stakes.

MOBILE PIONEERS

Companies such as BuzzCity’s myGamma and gofresh’s itsmy.com, mobile social networks turned mobile social ad networks, need little convincing. They made the strategic decision in 2007-08 to allow their verified members to choose the channel of advertising they would accept. Of course, this wasn’t just out of respect for the individual member. Opt-in also allows advertisers to better target their key demographic (example: sports enthusiasts with sports ads) and ensure members who receive a marketing message actually listen.

In my own mobile advertising road test/white paper (PDF) on behalf road test on behalf of Bango, a provider of mobile analytics solutions and MSG supporter, showed that this was indeed a plus for my own campaigns. In fact, I gave BuzzCity the highest marks overall because its opt-in allowed me to deliver effective mobile advertising. (Happy coincidence — I have an interview with BuzzCity CEO KF Lai next week and gofresh’s Vince Staybl has also just reached out to me from his NY trip to offer me a pre-briefing on some significant news, so watch this space.)

JUMPTAP CONSUMER INTELLIGENCE

Jumptap, a provider of mobile advertising solutions that also operates a major mobile ad network, aims to tackle these shortcomings. The company announced this week that is will implement a new feature in mid-year (translated: by end-June) that “enables mobile consumers to manage their own profiles for a more personalized brand experience.”

The focus is on permission-based advertising and on putting the consumer (individual) at the center of their advertising experience. In a nutshell, the feature will enable visitors to participating websites in Jumptap’s ad network to chose the mobile advertising content that interest them – and the choice to opt-out of the process altogether. (Specifically, all publishers in the network will be able to participate. Participating publishers will need to include a link to Jumptap’s profile manager.)

What’s the user experience?

People can choose from a variety of some 29 advertising content categories, including automotive, careers, chat & email, entertainment, finance, fitness, food & drink and games, as the slide below illustrates.

What’s at work (and how) in the background? And how does Jumptap avoid potentially presenting the same people with the same ads?

JumpTap operates a premium mobile advertising network with a penetration of approx. 50 million unique visits a month in the U.S. alone.

Predictably, Jumptap’s IP, which includes patented technology, mobile search algorithms and proprietary know-how around targeting and relevancy (which I have analyzed in this post), plays a huge role in delivering people mobile advertising they will likely find relevant and useful. The company counts unique visitors based on “distinct IDs we get from carriers, cookies, request headers and device IDs.” This can vary across network. “In instances where we don’t have a unique ID, we estimate the number of unique visitors based on page views/unique user that we see elsewhere in the network.”

INTERVIEW WITH PARAN JOHAR

Armed with this background I caught up with Jumptap CMO to learn still more about the nuts & bolts of this ambitious solution and what is says about the company’s wider mobile advertising strategy.

Q: Jumptap is one of a growing group of companies sharply focused on putting the consumer at the center of the mobile advertising ecosystem? Why is this important and what do you offer people?

A: What we’re now seeing is a new wave of mobile advertising right, with the focus on customer intelligence and really putting the customer at the forefront of the mobile advertising ecosystem. Many companies got lost and focused on other constituents: operators, publishers and advertisers. They are all important people, but we are putting the customer at the forefront of the mobile advertising ecosystem, and the way we’re doing that is allowing them to manage their own profiles in a really simple format. This also drives the relevancy of ads.

The concept of is revolutionary but because everyone else has been trying to satisfy other constituents. By driving customer intelligence you’re going to see a higher engagement rate. If you see a higher engagement rate, you’re going to see advertisers who are getting better ROI. If they’re getting a better ROI, you’re going to be able to charge them more. If you can charge them more, by default, you get a better publishing yield so you’re really taking care of all these other constituents by focusing on your core audience, which is the customer, and driving the customer intelligence.

Q: Other companies have a similar approach. And just last week Alcatel-Lucent broke on the scene with a mobile advertising solution that is the subject of a larger report I am currently writing. In it I argue that permission-based advertising is a good fit with messaging because you build a conversation that – in turn – can improve the customer data. But your focus is display….

A: Yes, it’s only about display and it’s not about behavioural targeting. What this is about is empowering consumers to choose their category of interest. That’s one component of the data that will drive the delivery of relevant advertising. It goes into the user profile. And then there might be a component related to context, a component related to carrier data, a component related to publishers’ data – or a keyword from a search. All these are components and the ultimate goal is to drive consumer relevancy through this focus on consumer intelligence– and the better we can understand our mobile ad network, the better we can serve relevant ads to consumers.

Throughout this process three things are critical. One is full-transparency. Two is respecting their privacy and making sure all this data is completely anonymous. And third is preference. We’re allowing them to tell advertisers ‘these are my categories of preference.’

Q: What’s the roll out and what are plans beyond the iPhone?

A: That’s a great question. We’re rolling this out at the end of Q2, and you’re going to get a link to a Beta site where you can go in on your iPhone – or any device – and just scroll through and change categories of interest to suit you. It’s incredibly simple. The idea was to keep it as simple as possible.

Q: It it’s for all handsets from the get-go?

A: It is for all handsets and all advertisers. It’s on iPhone and on mobile Internet, so it’s going to be limited at first. But, as it rolls out, it’s going to obviously develop [momentum]. The goal is ultimately to drive more relevant advertising to everyone on all handsets.

Q: I mentioned that other companies have placed some form of permission-based advertising at the core of what they do. Take BuzzCity. BuzzCity even surveys its members and shares this anonymized information with advertisers to help them target their audience. From an initial look at Jumptap is different because it offers the data to third-party publishers. This would perhaps be the differentiating factor. At the other end of the spectrum there is Alcatel-Lucent’s Optism solution, [a solution that harnesses permission-based advertising – specifically, text messaging – to improve targeting.] So, there are other flavors out there…

A: No one else is doing this the way we are. It is absolutely one of our key differentiators. We also have 80 percent of the carrier business in the U.S. AT&T works with two sales partners, right? One is Jumptap and the other is Yahoo. Needless to say, we’re in good company.

We also have the broadest IP portfolio of any mobile ad network. And we have our pay-per-lick performance marketplace that allows users to bid at a keyword level, category, handset or carrier. We’re the only ones who have all of that.

You bring up the mobile social networks such as BuzzCity. I think it’s a little bit different within a social media construct. That is one component that can be added to the user profile, certainly. But remember we are not taking a siloed approach. It’s not just contextual, not just consumer category information, not just behavioural, not just carrier information. It is all of these components aggregated across multiple forms of data to drive relevancy. That’s our consumer intelligence.

Q: Another part of this might be that you are a neutral network. You belong to a group of ad networks – including the likes of Millennial Media and inMobi – that is not in the Google or Apple camp…

A: I think that’s a great way to break out the marketplace now and there are three groups, so to speak. There’s a lot coming from Apple that I agree with — and there’s a lot that I don’t. On the one hand, Steve Jobs came out publicly and said that mobile advertising sucks and that he has this goal of driving relevancy right to his network. That’s something we applaud. It’s very much in line with our strategy of customer intelligence, so that I think is dead-on.

The piece I don’t think is dead-on is his approach. He’s almost creating a walled garden for himself, almost an AOL of the mobile Internet. Advertisers really don’t care where their ad runs. They care about reaching their audience, not the device. iPhone happens to be the sexy thing right now, but Android will be the next sexy thing – and it [Android] is already is starting to catch a lot of that limelight.

Imagine you were a TV buyer and you had to buy a 30 second TV spot and you had to be cognisant of whether your audience is watching television on a Samsung, Sony or Pioneer TV set. And then you had to worry about whether they were watching it over cable, satellite or a dish network. And then you had to customize your creative accordingly. And so on. It doesn’t make for an efficient marketplace and that’s where I think Apple is missing the boat a little bit. They’re becoming a walled garden in advertising, which I think is not good for the mobile advertising ecosystem in the long term.

Q: Finally, where is the excitement?

A: We’re doing a lot in rich media. Our Unified Rich Media Platform [which I detail further down] delivers the industry’s broadest set of rich media units – for both mobile Web and in apps – all from one network. And our rich media platform is completely open. So, if you’re a rich media buyer for you plug right into our system. We work with iPhone, Android, Palm, and Blackberry. We’re an open system and we help advertisers reach their target audience.

***

MY TAKE: Permission-based advertising sits at the core of a variety of approaches and solutions I analyze in my upcoming report for GigaOM PRO, a project that has evolved from a SWOT analysis of mobile advertising solutions (including Alcatel-Lucent’s Optism and JumpTap’s solution powered by “consumer intelligence”) into a wider discussion of the business value of permission-based (opt-in).

We have ample evidence that permission-based messaging delivers positive results and response rates. A messaging approach also allows brands and other companies in the ecosystem to build on this personal profiling data (with the individual’s permission) by adding questions to refine the profile. This way, an individual who has signed up for car ads (a broad topic) might divulge that they are more into Audi than BMW and even say why they prefer one over the other. All voluntary information an advertiser would no doubt value.

Display is a different. It’s more one-way than two-way, and there is a danger of “spamming” people with repeat advertising because there aren’t enough ads in a category – or because the ad networks can’t identify unique users (and therefore gauge whether an individual user has seen the same ad already, or not). Jumptap claims to have addressed the latter with its IP, technology and techniques that allow the ad network to identify 50 million uniques per month in the U.S. alone.

This week’s announcement builds on that foundation. The focus is to increase the value and relevancy of mobile display ads. (Thus, Jumptap does not compete with companies that focus on mobile messaging and direct marketing.) To achieve this Jumptap inputs the advertising categories chosen by the individual into a much larger, more sophisticated equation that includes data from carriers, searches and some context. This covers the bases to provide people a better user experience (provided there is a good supply of ads in each category), and that should certainly lead to high advertiser ROI and publisher yields. Of course, the proof is in the numbers. We’ll have to wait a while for those. In the meantime, Jumptap’s move can be read as an important confirmation that all advertising – not just messaging – is correctly evolving to provide people more of a say in what they get.

Disclaimer: Bango is an MSG supporter with a branded thought leadership presence on this website; Jumptap has been an MSG supporter and sponsored a series of podcasts.

Today MSG was formally named a top 50 influential tech blogs in a new report from Konector, a company linking digital marketers with leading bloggers to help promote brands to highly targeted audiences. The report, Top Independent Gadget Blogs and Bloggers, profiles leading tech sites and found that a whopping 40+ million visit the top 140 technology and gadget websites each month.

MSG joins an impressive roster of technology websites and blogs including CrunchGear, Crunch Mobile and ReadWriteWeb. Other important destinations not included in the top 50 but nonetheless listed in the top 140 tracked in the Konector report include: All Things Digital, Mobile Industry Review and Scobleizer. (Konector does not include corporate blogs or blog networks in the Top 50 list, which is why websites including Ars Technica, Gizmodo and VentureBeat are not mentioned.)

To deliver their message to their target demographic marketing, advertising and PR professionals must connect with quality audiences of influencers who will accept and – even better – amplify the brand message. To achieve this Konector uses a unique methodology to measure the quantity and quality of visitors. Ranking is based on reach, frequency and interaction. As Kingsley Maunder, a director at Konector, put it in a press statement: “We use our proprietary Online Impact Factor to measure how many people visit a blog, how often they visit that blog, the time spent on the blog and how active they are once they get there.”

TIPPING POINT

Being named a top 50 influential technology destination is the latest in a string of developments and accolades that has seen MSG extend its global reach and reputation through the production of highly-acclaimed white papers, market research, podcasts and editorial content for the mobile industry.

Working with the fantastic team at Tego Interactive, an experienced team of professionals helping to build businesses through converged Web and mobile solutions, MSG is extending its reach with new projects and new partners. In the next weeks you’ll see more thought leadership from leading companies as I formally take the wraps off a series of branded microsites – known as Briefing Rooms.

These destinations, accessible via the MSG homepage and mobile website, will promote ideas and insights from MSG partner companies and supporters including Tego Interactive, mobile payments and mobile analytics provider Bango, mobile search provider Taptu and mobile commerce and communications provider Netsize on topics ranging from usability and user experience to mobile industry mega-trends. I’ll announce additional partners in the areas of mobile marketing and Augmented Reality in the next weeks.

MORE AWESOME AUTHORS

MSG is also growing its roster of contributors and collaborators.

In addition to exclusive columns from leading industry executives including Colm Healy, Vice President of EMEA Services for Qualcomm Internet Services (QIS) and General Manager of Xiam Technologies, and Antti Öhrling, Co-Founder of Blyk, the messaging media that works with mobile operators to link young people with brands and other stuff they like, I’ve found a new author who shares MSG values and vision (!)

Eliza Dashwood will be contributing regular analysis of mobile advertising and social media, and commenting on key industry data points. She has a 10+ year track record in the online industry delivering digital strategy and execution for brands and accounts including Mercedes Benz, The White Company and Optical Express. She has also held a variety of senior positions at digital agencies including Ambergreen, a digital marketing agency headquartered in Scotland, and MediaVision, a media planning agency with clients throughout Britain, Europe and North America.

More importantly, she knows the industry and cares about the trends/shifts impacting it at all levels.

Eliza consistently tracks how social media, mobility and permission-based marketing combine – even collide – to change all the rules. But it’s not just about identifying the opportunities and challenges ahead. Eliza also architects strategies that allow brands and companies to connect with empowered people (consumers) who expect/demand a conversation and not a sales pitch.

I look forward to the ideas and insights she will bring to MSG and encourage you to reach out to her directly (elizadashwood at googlemail dot com).

KONECTOR REPORT

The Top Gadget Blogs and Bloggers report provides marketing, advertising and PR professionals with key data and stats on the most influential gadget blogs they should target to promote their brands online, helping them understand:

• Which blogs have the most impact in gadgets
• Which bloggers have the most impact on their audience
• Which bloggers have a captive audience most suitable for their target
• market (by demographic and location)
• Which bloggers promote and review products and services most suitable for their brand

The Top Independent Gadget Blogs and Bloggers report will also give marketing, advertising and PR professionals additional insight into promoting their brands on social networks, including YouTube, Facebook, MySpace and Twitter, giving them an opportunity to increase their exposure to this wider audience.

A detailed overview of the report, including sample pages can be found here.
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Disclaimer: Tego Interactive, Bango, Blyk, Netsize, Taptu and Xiam (all mentioned in this post) are MSG supporters.

Kudos to Mark Hawkins and the team over at the Mobile Data Association

On the face of it, the partnership between BBC Radio 1 and all the major U.K. mobile operators is aimed at allowing listeners in the U.K. to send the radio station picture messages (MMS) from their mobile phones for the first-time ever all day today (December 11) free of charge. But dig a bit deeper and the event has been set up as a springboard to encourage people to use their phones to do more.

To this end the MDA has also launched an educational website with the long-term aim of helping people to send picture messages: http://www.getsettings.org. The idea is to provide people a “single, unified hub of settings information” and address configuration issues around older handsets in circulation and SIM-only contracts.”

Of course, this problem isn’t limited to the U.K. and I hope this educational effort sets a precedent other professional organizations and mobile companies follow.

NIGHTMARE AHEAD

In fact, the job of solving the myriad of issues around customer education to make using our phones and accessing the mobile Internet a no-brainer is widely considered to be the chief business imperative of the coming year.

This is the view that came across loud and clear at MIDAS: Managing Innovative Devices and Services, an industry event I attended and spoke at last year (organized by my esteemed colleague Abraham Joseph, Founder, Device Management Forum).

During the event we discussed the advance of the mobile Internet and what the impact would be on stakeholders (device makers, mobile operators and software vendors, distributors and retailers) when we all need assistance to surf the Web, send email and download/install apps. The scenario, we agreed, was a nightmare.

Fast forward, and the problem is no longer a discussion point for passionate technologists; it’s a business issue for companies across the ecosystems banking on us all to use our phones to do more.

Yes, people need assistance to understand and configure their devices. The MDA recognizes this, which is why it has launched an educational web site for precisely this purpose. However, people also need fast track training to get on the mobile Internet and the industry is under pressure to have to come up with some solutions – sooner than later.

PEOPLE ARE BAFFLED

Indeed, a raft of studies shows that we are baffled by our new phones and features. One that stands out comes from independent research firm Coleman Parkes, which asked 4,000 people in the U.K. and U.S. about their pet mobile peeves. (The study was commissioned by Mformation, a provider of mobile device management (MDM) technology. But vendor spin aside it sheds some important light on this real problem.)

Among the key data points, the survey found that a whopping 85 percent of people said they were frustrated by the difficulty of getting a new phone up and working. Additionally, 95 percent said they would try more new services if phones were easier to set up and 61 percent said they stopped using an application if they could not get it working straight away.

So, we know people would like to do tasks as browsing the Web, reading email or sending picture messages, but the complexity of mobile phones (really handheld-computers at this point) is too much for them.

TOP TEN HEADACHES

During the MIDAS event that impressed me with the scope of this problem, I met with Wouter Deelman, CEO of Qelp, who blew me away with his presentation and an eye-opening list of the Top 10 device management challenges. (By way of background, Qelp is a Dutch software-as-a-service company sharply focused on solutions that increase revenues and reduce customer support costs.)

Wouter co-presented with Blyk, a Qelp customer and ad-funded MVNO model (this was before Blyk shifted its focus to becoming a media company). Blyk revealed that it had achieved a 60 percent success rate getting users to accept Over-the-air (OTA) settings (critical since much of Blyk’s ad-funded model was built on users’ ability to receive and respond to MMS mobile advertising messages). In effect, Blyk admitted a 40-percent failure rate – a problem Blyk said it solved by working with Qelp.

Indeed, OTA settings top Wouter’s list of Top 10 device management headaches.

1. Over-the-air (OTA) settings require user acceptance.

2. Some devices do not support OTA and require manual configuration.

3. New handsets are coming to the market through different channels (not just via mobile    operators), so the problem and the responsibility to solve it is fragmented.

4. Remote access to a device requires access to the mobile Internet (which is what most users are trying to set up in the first place).

5. Users are confused when settings arrive, and often don’t know what they are for or where to store them on the device.

6. Each handset has a different UI (user interface).

7. Call center support is an option – but costly for the operators and frustrating for the users.

8. Second-hand devices are preconfigured incorrectly.

9. Network operator settings get preference over MVNO settings.

10. New IMEI ranges and handsets not yet recognized by the operators systems.

It may seem that Apple’s iPhone and the slew of new touch screen interface devices/ smartphones solve this problem (because they come preconfigured by the iPhone exclusive channel on the market and most available services are displayed via icons on the screen and not buried in a sub-menu).

But the range of new devices and multitude of UIs only exacerbate the problems. And let’s not forget the many people unlocking their

iPhones because they want to have the devices and the operators they want (!) and therefore need to configure the device themselves, manually.

NEED HELP? GOOGLE IT

Can the device management issue impede the growth of mobile Internet usage? The jury is out on this one – but it’s common sense that we would use it a lot more if we could. (We cannot use what we cannot use.)

Ironically, the mobile operator – the player you would expect would want to educate us to use mobile data (and generate additional data revenues in the process) – appears to have missed the plot – and the opportunity.

In a recent must-read guest post for VisionMobile, Wouter road tested six U.K. mobile operator websites to look for support and set up email on a Nokia N96. The result: a mix of irrelevant results and no results at all. Wouter’s conclusion: for an end-user seeking help to get a service up and running on their mobile phone, the answer is not just a few clicks away.”

Wouter then looked for the same information using Google. The answers are marginally better – but the search results do include sites such as Know Your Mobile, that do the job just fine.

Understanding that Google is destined to play an increasing role in customer care (becoming the first place people look for help to configure their phones) KPN (also a Qelp customer) has applied search engine optimization techniques to ensure it’s website (and brand) at least show up in the top Google search results. (Daily statistics now show that 50 percent of KPN’s subscribers go to Google first for answers.)

The takeaway: The MDA has literally done us a service in the U.K., but there is a lot more work to be done. The advance of the mobile Internet has encouraged us to check out the wealth of apps and content available. However, many of us need help setting up our phones before we can explore this brave new world. Providers have a choice: improve customer education and support, or deal with customer frustration (and lost revenues) when people quite literally turn off.

Mobile Groove, the monthly podcast that focuses on the news and companies that matter most in mobile — is back with a great line-up of topics and the usual mix of insights and outspoken observations from co-host Inma Martinez, my über-connected and always professional partner in crime. (We missed posting on Friday, but the reason for the delay will be clear when I take the wraps off an all-new MSearchGroove, so watch this space.)

Mobilize, the conference Inma attended in September, left a lasting impression. Her SWOT analysis: a great line-up of startups and a high level of energy and VC activity in the Valley. Where does this leave Europe? Inma (also based in London) connects the dots in some recent investor reports and concludes Europe may see its best and brightest in mobile “defect.” Is the U.S. the place to be if you are a mobile entrepreneur? Listen in and let us know what you think.

Speaking of startups, Inma also outlines the highlights from Seedcamp, a program created to jumpstart the entrepreneurial community in Europe by connecting next generation developers and entrepreneurs with over 400 mentors from a top-tier network of company builders; including seed investors, serial entrepreneurs, product experts, HR and PR specialists, marketers, lawyers, recruiters, journalists and venture capitalists. One company that stood out: VouChaCha, a U.K. startup that delivers vouchers to your mobile phone. Where is the hold up in Europe and why aren’t coupons a de facto part of our daily mobile routines (as they are in the U.S.)? You tell us!

Other success stories Inma shares: Flirtomatic, iScoot and eBuddy.

CONTEXT MATTERS?

Will location-based services excite women? Well, we beg to disagree.

Listen to the lively podcast here [23:54].

What about women who are interested in bargains are willing to drive miles in pursuit of discounted designer clothes, for example. (Think of the success of outlets in the middle of nowhere?!) Will an app that tells women what’s on offer nearby fly or fail? And where are the female-focused apps anyway? Men may have their iPhone app that celebrates flatulence – but where are the apps that target women? Talk about leaving money on the table!

BLYK MEDIA & SOCIAL MEDIA

In a follow up to the last podcast Antti Öhrling, Blyk Co-Founder, joins Inma for lunch and the opportunity to explain Blyk’s real business objectives. It’s not about mobile advertising; it’s about mobile media. Inma tells us it is an ambitious model – but one that could work well for Blyk. Listen in and find out.

And we discuss the buzz around social media, giving Vodafone (and the fast-followers sure to make headlines in the next weeks/months) huge credit for Vodafone 360. Why is social media big in mobile? Inma tells us that part of the reason could be the popularity of Twitter on mobile. (She should know; when it comes to mobile London is the Twitter capital.)

We also revisit Spotify and dissect its mobile ambitions. Is it gearing up for a showdown with Apple? Listen in and let us know what you think.

RAISING OUR GOBLET

This time Inma salutes Mark Curtis, the mastermind behind Flirtomatic, a phenomenally successful freemium flirt and fun service.

Fresh from several mobile advertising events, I raise my goblet of rock to Dagmara Brylack for sharing a milestone mobile advertising case study during Mobile Marketing Forum Europe (which I analyze here). I also recognize Mark “Mr. Mobile” Wächter, for his work to launch MMA Germany. When it comes to mobile advertising, Germany is a potential powerhouse (!)  and future posts here on MSearchGroove will highlight the stats, campaigns and companies that make this market the one to watch.

Until next time – keep it fun!

PERSONAL THANKS

Our thanks to the Grant Butler Coomber team (and Billy Burnett) for their continued advice and support on how to build awareness of this podcast series and other MSearchGroove initiatives.  I fully recommend them as our PR team of choice if you want to build your brand in Europe. In the U.S. I am indebted to Jeff Fishburn (“always-on” at OnPR) and Liz Erk, whose agency, The Jaxson Group, also advises MSearchGroove. Her talent: securing major media placements and speaking engagements for client companies.

But most of all – thanks to you, our listeners. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter (@mobilegroove) or email us at mobilegroove AT msearchgroove DOTcom.

Related posts:

PODCAST: Thought-Provoking Mobile Groove Series With Inma Martinez Debuts Today; Offers Inside Track On Industry Disasters, High-Flyers & What’s Highest On Investor Radars

In brief: MSearchGroove proudly steps up to the plate and hosts the Carnival of the Mobilists for the first time.

The last weekend in August and I spent much of it at a two-day summer festival in Siegburg, Germany, where I’m based. I’ve been on a natural high with good friends, great food and a wonderful line-up of home-grown entertainment. But not all the excitement was at the local fairgrounds. The Mobilists have also come up with a mix of thought leadership and must-read posts that give us new perspectives on mobile and start our adrenalin flowing.

Andy Favell and the team at mobiThinking.com do us all a great service and compile a comprehensive list of mobile industry facts and figures. The first in this series focuses on the size of the mobile Web and the implications for marketers. What do the numbers tell us? Should investors/companies take advantage of the economic slowdown and move ahead while others are standing still? Read on, find out and tell us what you think.

Another round of important mobile stats comes from Jose Colucci at Mobile Strategy, who continues the countdown of the 12 Reasons Why Canadian Banks Should Really Offer Mobile Services. Jose expertly brings together figures that show significant growth and penetration (despite strict government regulation, a lack of competition and a sky-high mobile data plans and pricing).  The bottom line: over 70 percent of Canadians have wireless access. Is Canada an untapped market for banking services? Is there a first-mover advantage for financial institutions that get involved? Read on, find out and tell us what you think.

With all the buzz around app stores and the proliferation of mobile devices (beyond just phones), the timing couldn’t be better for this post from Antoine RJ Wright. In it he recounts Nokia’s size, scope and industry influence, and wonders if the Finnish giant has the resources and marketing muscle to sustain three brands/strategies: Ovi, Symbian and Maemo. Could Maemo be the “wild card” in Nokia’s hand? Read on, find out and tell us what you think.

Tsahi Levent-Levi at VoIP Survivor, a blog in RADVISION’s blogs network providing insights into the VoIP industry, connects the dots in recent analysis/commentary and examines the outlook for mobile VoIP. Will current interest among carriers create the conditions for a viable market? Or will it simply advance the shift to IMS (IP Multimedia Subsystem) – a technology that defines how to set up advanced services for 3G cellular networks – and put operators back in the driver’s seat? Hmmm…should Fring and Truphone watch their backs? Read on, find out and tell us what you think.

A refreshing new idea comes from Judy Breck at Golden Swamp. She uses the debut of  Half the Sky, a new book documenting the plight and progress of the world’s women, to start a long overdue discussion about the impact of mobile on women in the emerging markets. Must women such as Saima Muhammad, a Pakistani woman who routinely beaten by her husband until she started a successful embroidery business, continue to endure their terrible fates in silence? Or does personal mobility offer the promise of liberation and freedom from oppression? What is the outcome when the world’s women have access to the Internet in their pockets? Read on, find out and join in the conversation at Golden Swamp.

Meanwhile, Dennis Bournique at WAP Review uncovers disturbing inequities in the price of mobile data in the developed world. He successfully argues the case for a rethink based on his shocking observation that (currently) all prepaid data is “wildly overpriced.” So, what is fair price for mobile data on prepaid plans? Dennis does the math and provides us a reasonable model that makes money and sense for everyone. Read on, find out and give us your take.

Some eight operating systems are battling for market supremacy. Will there be only one? Digital evangelist Ian Wood (thankfully) moves us past the academic discussion and back to basics in a post that draws from his vast personal experience and road tests. His conclusion: look for consolidation that will see three OS providers emerge. Who will make the winner’s circle? Read on, find out and let us know what you think.

Kudos to C. Enrique Ortiz at About Mobility for asking the question: is Apple a control freak? He connects the dots in recent developments – such as the decision by Apple to reject both Google Voice and Riverturn’s VoiceCentral application – to communicate an uncomfortable truth. But it’s not about whether Apple is morphing into a monopolist; it’s about the larger impact on the ecosystem and the third-party developers that have made iPhone the success it is. What are the arguments (pro and com)? What’s at stake? Read on, find out and speak out!

Finally, MSearchGroove uses COM #189 to showcase Mobile Groove, its new, no-holds-barred podcast series. I join with series co-host Inma Martinez, a leading digital media strategist and advisor to venture capitalists who has been referred to as a “free radical” by Red Herring and Fast Company. Together we raise our goblet of rock and speak out on the rise and demise of Blyk, what went wrong at Spinvox and what we can expect from Microsoft moving forward. Read on, have fun and contact us with your ideas/input! (mobilegroove AT msearchgroove DOTcom)

Post of the week goes to Judy Breck at Golden Swamp for prompting us to see mobile as a tool (for change) rather than a technology. Access to the mobile Internet gives everyone – particularly women suffering in isolation – a voice, allowing them to connect with people and peers who can amplify their message and fight their cause. Thanks, Judy, for reminding us why mobile is amazing and why we must strive to bridge the digital divide.

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If you’re like me, then use the last days of August to catch up on your reading and check out the Carnival posts we unfortunately missed on MSearchGroove.

COM #186 at allaboutiphone.net (Topics include: what brands want from targeting; U.S. wireless data stats from Chetan Sharma; and a look at whether Europe risks losing its competitive edge in mobile. A highlight: an answer to the question – does Steve Jobs hate the App Store?)

COM #187 hosted by Jamie Wells at mobilestance.com (Topics include: five iPhone apps that could make publishers money; a discussion around the future of paid content; an in-depth look at what a mobile Web OS experience could offer; and an exclusive interview with Blyk.)

COM #188 at Golden Swamp (Topics include: how location adds context to content; a look at the cool new Layar Reality Browser2.0; an analysis of Nokia; and a new take on mobile education.)

Thanks to COM contributors and readers.

Look for the Carnival next week at WIPJam - and be sure to catch up with Caroline Lewko and the great WIPJam team at the next Jam Session on the World Tour: WIPJam@OSiM (Open Source in Mobile), September 16, in Amsterdam.

When I first met Inma Martinez at Mobile 2.0 Europe I was struck by the depth of her knowledge and the strength of her determination to speak her mind. I made the decision to work with her at some level. A few in-person meetings in London (where she is based) and many Skype chats later we are proud to take the wraps off Mobile Groove, a monthly podcast series here at MSearchGroove that will provide short, digestible and insightful commentary on what’s hot in news, investments and developments impacting the mobile space at all levels.

Mobile Groove will air on the last Friday of every month and consist of three thought-provoking segments: The Big Picture, a wrap of the month’s news and views; Street Groove, an informed discussion of the companies and technologies sure to rock the mobile space; and The Radar, a roundup of talk on the street and what is highest on investors’ radars.

OUTRAGEOUS & INSIGHTFUL

The first in the series kicks of with a look at the the rise and fall of ad-funded MVNO Blyk, the controversy surrounding voice-to-text provider Spinvox and an in-depth look at the key platform players (Apple, Google and Microsoft) – specifically the news via Taiwan handset makers that Microsoft plans to adopt a dual platform strategy to promote its Windows Mobile OS (operating system) and, thus, take aim at both Android- and iPhone-based platforms.

Inma, who stands out as an über-connected advisor to venture capital firms, also gives us the inside track a new fund by entrepreneurs for entrepreneurs that may spell relief for European startups and smart people with brilliant ideas.

We joined forces to provide industry commentary and insights on the top market news in the mobile industry. But it doesn’t mean you can’t get involved. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter(@mobilegroove)or email us at mobilegroove@msearchgroove.com.

Listen to the podcast here. [22:25]

A ROUND OF THANKS

And finally, thanks (again!) to Inma, for the energy and excellent ideas. Thanks to Annette Kramer, a Stradbroke Partner and presentation coach, for her kind offer to do the intro and outro to our podcast series; and to Alfred DeRose, Brian Avery and the team of professionals at Tego Interactive, a company helping to build businesses – including mine – through converged Web and mobile solutions. The company has been instrumental in creating some new features and functionality (including a mobile site) for MSearchGroove, with more soon to come, so please check back regularly.

And a special thanks to RealWire, an MSG partner and supporter whose global news release distribution service (specializing in the online media and mobile) consistently delivers reach, audience and exceptional analytics. MSG uses RealWire for all press releases, and I recommend you do the same.

For now our podcast will be accessible via the MSearchGroove web site home page. In September Mobile Groove will also be available for download via a dedicated iTunes channel.

On the heels of the extremely popular posts on Blyk and MSG’s exclusive interview with Pekka Ala-Pietila, CEO and Co-founder of Blyk, the timing is perfect to deep-dive into Orange UK’s mobile advertising aspirations now that it has formally folded Blyk’s MVNO activities into its wider strategy.

The first service that draws from Blyk’s mobile advertising model – an approach built from the ground up to encourage a dialogue between brands and people that want to her their message by delivering people relevant advertising in tune with their preferences and profiles – is Orange Monkey.

The first Pay As You Go (PAYG) package for the U.K. market offers free music to customers when they top up their mobile. (Although PaidContent suggests the service is not about free music since the tunes you get to listen to (not own) when you top up add up to about 600 minutes each month. This translates into GBP2.14 ($3.53) for customers regularly paying GBP30 ($49.23) in phone credits. But that may just be picking nits since people are getting music at no extra cost.)

More about Monkey: it provides exclusive music, pre-release tracks and other content from Universal Music’s catalogue and relies on British broadcaster Channel 4 to get the word out to the target demographic (16-34 year-olds with mass market phones) via the Channel 4 portfolio including 4Music, billed the most watched music channel in the U.K. A clever twist and nod to the power of multi-channel promotion: The 4Music team will be the editorial voice of the official Monkey website which will carry news, artist features, playlists, exclusive content and competitions. (Check out the Orange site for more details and a video demo of the service.)

The promotion is about building buzz, loyalty and community. So, where does/will Blyk’s mobile advertising approach come in?

The focus on engagement and social networks is baked into the offer. As well as free music, Monkey offers customers free texts, allows for playlists to be shared on social networks, and it “delivers great offers from relevant brands direct to their mobile.”

Prior to the Monkey launch I was pre-briefed by Marc Overton, Orange VP of Wholesale, Business Development & Partnerships, who walked me through the concept and – more importantly – where brands and Blyk fit in the scheme of things.

AN EXCERPT OF OUR Q&A

Q: To backtrack for a moment, Orange essentially owns Blyk and the capabilities it has built to deliver targeted information and ads. What is the plan here?

A: We have been keen to get this [Blyk's end-to-end capability] as a core part of the Orange organization. We already have mobile advertising and cross-platform capability, and for us, this allows us to have fundamentally different relationship with our customers. It’s not about ad hoc adverts or repurposing display adverts; this is about targeting and tailored information delivered in a timely fashion as part of a broader proposition that has great benefits.

Q: Blyk has run over 2,500 campaigns. What sets the stage for what we might see from Orange?

A: The Lucozade campaign stands out. It gave out vouchers and consumers could redeem them for a free bottle of Lucozade. The response rates were overpowering just based on a [Blyk] subscriber base of 200,000. If we can start delivering that to our subscriber base of 16 million, then we can generate results and create something quite special. (By way of background, the Lucozade Energy campaign, documented in this case study, delivered vouchers via a bespoke WAP site Blyk members could visit to read about the promotion. A click on a link on the site sent an SMS voucher sent to their handset. Voucher requests from the Blyk activity accounted for 35 percent of total requests for 1 percent of the media spend.)

To do this you need the ability to design an end-to end creative campaign that delivers campaign and targeted to consumers. It’s something that isn’t easy to do. To do it ourselves means we would be sitting here in a year to 18 months having a similar conversation. It [the partnership with Blyk] gets us to market ahead of the rest of the competition in the U.K., and gives us the experts [Blyk support] that have been doing it and establishing the category so we can have these conversations [with brands] and off the back of it we can do develop some unique and unrivaled propositions.

Q: Such as?

A: Keep in mind that we have also signed a strategic partnership with Barclays in the U.K. to develop mobile payments and that will come online in the next year to 8 months. Linking mobile payments with mobile messaging – being able to tell people about relevant offers and where to redeem those offers – is going to be an exciting proposition, particularly combined with location services.

At a larger level, it’s about us as an operator having a deeper relationship with our customers and giving them assistance beyond telling them what their bill looks like. We are the place they can come to for great offers and benefits that they wouldn’t know existed if we didn’t have this [advertising] ability.

From an awareness level – telling customers about new products coming to market and get that community, dialogue and click-through going on between customers and brands – we are looking to target different segments with different types of messaging and campaigns. It’s a bit of a journey, but we’re confident we’ll get the right mix.

Q: What does this push look like on a practical level? Who is in charge of what and what is my relationship – as a brand or advertiser – with Orange?

A: Orange will do the ad sales, supported in this by Blyk. I see this as a team effort and the way we work together and reward each other is based on that team working. It is without a doubt a different skills set that Blyk has built, and there is a credibility and value to having Blyk support our ad sales force.

Q: You mention other segments and I left us hanging in our last post with the observation that operators can use the Blyk approach to target more than youth. What are your plans in this direction? Will we see a Blyk-like offer for customers over the age of 24?

A: Absolutely. We’re keen to offer this capability to all our customer segments. The model will likely change depending on the segment and type of customer, so it is our intent to have this as a core capability for our media business. We’re not restricting it just to the youth market and not just to consumers; it will be business professionals as well. In our view, Blyk has created a highly intimate way for a mobile operator to communicate with its customers, and it shouldn’t just be restricted to young people.

Q: Would it be a messaging option you offer to brands? Or would you use this to promote your own offers and perhaps also do your part to solve the content discovery dilemma: surfacing all the apps and content people can’t find and buy because mobile search doesn’t cut it yet?

A: It’s a conversation and we could us it to draw customers’ attention to a variety of offers, including our own [two-for-one price movie deal] Orange Wednesdays. We could also use it to launch propositions for [content/app] partners, or simply package it up for advertisers. Filling up the pipeline won’t be a problem.

Q: Earlier you referred to Orange as a ‘media company.’ That’s very different thinking for a mobile operator. Can you elaborate on this strategy and how it ties back in with the group and what I imagine would be your big-picture goal to offer brands a cross-media approach?

A: You’re right about the cross-media possibilities. That’s the group ambition and one that brings together other [group] capabilities such as our heritage as an Internet provider and portal provider with Wanadoo, our content production facilities in Spain and our mobile ad sales force in the U.K. We have capabilities – from a media perspective – that other operators don’t have. It’s a core part of our strategy to leverage these assets and capabilities and relationships into the media world. We’re doing a launch in a couple of weeks and talking to the media agencies about our ambitions in this space. We can brief you on this, if you like. This is a serious part of our business and the upcoming announcements demonstrate this.

Q: Sure thing –let’s connect then!

MONKEY BUSINESS

Since Marc couldn’t go into the specifics of the Monkey launch, I checked back in with Mat Sears, Orange Head Corporate & Consumer Communications, to fill in the gaps around the service and find out how it’s done to date.

Predictably, Mat couldn’t provide stats on a service that only launched July 30th. However, he did say the offer is “flying off the shelves.” Will advertising follow? Orange is getting in gear, and MMS and SMS ads (again, following the Blyk blueprint) are next on the agenda. The focus is on lifestyle companies around music (clothes, cosmetics, soft drinks), rather than other music labels or individual artists (extending their message to the community through a dialogue), although we may also see some campaigns to promote music and related events.

WHAT WORKS?

My take: Orange ranks high in my book as a mobile operator making the inevitable shift from access company (telco) to audience company (media player). It was one of the first operators out of the gates with a comprehensive mobile advertising offer, opening its Orange World portal to advertisers back in August 2006. Incorporating Blyk’s operations is a logical step in the strategy and choosing to focus on segments beyond youth makes hard business sense. I wonder if Orange will crack the code and grab the attention of the prosumers or any of the other potentially lucrative segments Novarra outlined it is path-breaking report. (Look for more on Novarra, next in the series Getting Personal, a special MSG report on personalization technologies.)

While it’s a smart move for Orange to target other segments, it begs the question: how should Orange tweak the Blyk blueprint to achieve its business objectives?

Free content/services works with cash-strapped youth. But how do you get the attention of affluent mobile professionals or life-stressed muli-taskers? (And let’s not forget the same dilemma faces Blyk copy-cat service providers such as Croatia’s ad-funded MVNO Tomato Plus and Gigafone, a mobile marketing services group that borrowed more than a page from Blyk’s founding concept.)

Happy coincidence that I was thinking this through when I bumped and connected with Alan Moore, an esteemed colleague and renowned social media/engagement marketing  pundit you’ll see a lot more of on MSG. (In fact you can get in the mood for our regular laid-back, hands-on look at what YOU need to know about social media marketing by checking out my two-part interview with him on behalf of bnetTV here.)

So, what are the do’s and don’ts for Orange (and really any company serious about advertising) moving forward?

1)   Think beyond offers that are about content and apps. Youth may like them, but the real value may lie in the mashups that bring it all together (with calendars, contact books, communities, you name it!) to simplify/enhance our lives on mobile.

2)    Don’t get hung up on free. As Alan pointed out in an invigorating rant on Skype, and again in his must-read post, Spotify is a case book example of how functionality (allowing people to do something with the content they get for free and share the end-results with the people who matter to them most) beats out freebee. As Alan puts it: “Last.FM or Spotify have understood that “FREE” is not the kicker, it’s the quality of the service that ‘enables’ its users in a rich variety of ways. Playlists, recommendations, personalization, discovery, contextualization, location, sharing are again part of this new vocabulary.”

3)    Think big – and think networked. Enabling people to interact with content on their terms is they way things are. Get it right and reach will follow.

The bottom line: While flat-rate data plans have become more pervasive, and mobile data use has increased, cost still remains a very sticky subject, particularly for content not covered under unlimited data plans. This is a huge issue for operators and content providers looking to increase uptake of mobile content, but the implication is pretty clear: consumers don’t have good pricing information, and they’re hesitant to shell out without it.

***

THERE’S A MIDDLE CLASS OF IPHONE APP DEVELOPERS, says mobile apps analytics company Flurry, with them bigger than independent developers, but much smaller than the traditional mobile powerhouses. The company studied the distribution of the most popular games on US carrier decks and in the Apple App Store, and found that the iPhone environment wasn’t dominated by the same big names (EA, Gameloft, Namco, etc.), but rather by smaller, newer developers.

Flurry says the cost of content is a big issue: it notes that in the App Store, EA’s games mostly run from $5 to $10, compared to the $1 to $2 of other more popular games. It also notes that just before it conducted its analysis, Gameloft sliced the cost of its iPhone games to 99 cents; consequently 3 of its games leapt into the top 25 list. Source

The bottom line: Once again, these figures show how price-sensitive consumers are when it comes to mobile content. The question for the likes of EA, though, falls back to that wonderful economic concept of price elasticity: by cutting the price of a $5 game to $1, will they get 5 times as many buyers? It’s hard to get a read on that from Flurry’s data, but anecdotally, it seems that users have a much easier time paying the mental transaction cost of a 99-cent app, and the lower price tempts a lot more curious buyers.

***

SIXTY-TWO PERCENT OF MOBILE VIDEO USERS SPEND MORE TIME ON THE MOBILE INTERNET than they do surfing the internet on their PCs, according to a survey from mobile video delivery company Transpera, compared to just 9 percent of people who don’t watch mobile video. There’s a wide gap in other usage stats between users and non-users of mobile video, making it clear that those who do use it are heavy mobile users in general.

There’s also some good info for potential mobile video advertisers: the company found that mobile video users eat out more, travel more and tend to earn more money than non-users. Of course, if these users are out of their home or traveling more often, and cost isn’t a concern, they might be expected to use mobile services more heavily. Source

The bottom line: Clearly people using mobile video are early adopters and heavy users of mobile data services. This is great and makes them a good target for advertisers, on one hand, but on the other, expresses that use of mobile video is still far from mainstream.

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THE MOBILE WEB ISN’T JUST LIMITED TO SMARTPHONES, browser behemoth Opera says. In its latest State of the Mobile Web report, the company says served over 10.4 billion pages to the 26.5 million users of its Opera Mini browser in June, up 8 percent over May. It reports the top ten countries for Opera Mini use in the month were Russia, Indonesia, India, China, Ukraine, South Africa, U.S., U.K., Poland and Nigeria, with India overtaking China last month. Source

The bottom line: Opera Mini remains a popular way for feature phone users to get online, and coupled with the use of operator-provided transcoding services, as well as good old carrier decks, remind us that browsing the mobile web isn’t limited to the likes of the iPhone and other high-end devices. Users of simpler devices remain a huge and viable audience for mobile content providers and advertisers.

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MOBILE DATA PLANS ARE ONE OF THE FIRST THINGS CONSUMERS LOOK TO CUT when they hit budget problems, says research from Strategy Analytics. It found that almost half of Americans surveyed said they’d drop mobile data completely if they needed to cut household costs, a far greater percentage than mobile voice, fixed voice, digital TV or broadband internet.

The bottom line: While mobile data use grows, it’s still viewed largely as a luxury item, rather than a necessity. Just 10 percent of people said they’d drop their fixed broadband completely, showing just how important it has become to people – meaning mobile data has a long way to go.

***

TEXT, VOICE, THEN MOBILE WEB are the most common features used daily by UK mobile subscribers, says Lightspeed Research. But the gap between text and voice, and mobile web remains pretty huge: About half of those surveyed send a text every day, while a little more than a third make a call each day; but just 9 percent use the mobile web every day. Source

The bottom line: While mobile web use continues to grow, as we’ve seen from multiple data points today, there’s still a lot of room for growth and several obstacles remain. For advertisers, a bigger audience would be beneficial, so what can be done to help to grow that audience? There’s the Blyk model (documented in Peggy’s in-depth analysis), which looks to offer free service to users in exchange for ads, but perhaps other sponsorship opportunities exist. Vodafone’s “free internet days” have generated a lot of interest and usage, and these sorts of offers could represent a sponsorship opportunity.

In brief: An analysis of what Blyk’s partnership with Vodafone Netherlands really means, an exclusive Q&A with

It’s been a bit quiet at MSG as I finalize the plans and partnerships that will transform MSG into a media company and lay the groundwork for an ambitious mobile marketing publishing project that has already earned the endorsement of several major industry organizations.  (More in a press release soon via RealWire, a global news release distribution service and MSG partner that, like the online media industry that is its focus, is always-on, always-connected and always professional, which is why I can recommend them so highly.)

But I couldn’t end the week without posting an analysis of the exciting (but not unexpected) news from Blyk, combination mobile engagement media company, mobile advertising startup and MVNO, that it had signed an deal with to roll out its branded service in partnership with Vodafone Netherlands and to share revenues with the operator.

Connect the dots, and Blyk has executed on the game-changing strategy that Antti Öhling, Blyk co-founder and CEO U.K., outlined in May in this exclusive Q&A. In it he provides solid logic for “making the switch” from MVNO (a model he called a “proof of concept”) to youth engagement media. The reasons range from scale and speed (both accelerated through partnership with operators) to the ones that matter most to advertisers: reach and engagement.

As Antti put it: “An MVNO means that you have to make up-front heavy investments. We needed to do it in the U.K. in order to get the whole machinery working. We needed to have access to all the tools that the operators have in their server rooms. Now that we understand how to use it [technology] we know how to help them. We know exactly how they can combine operator infrastructure with our ad engine and campaign management. We can make every campaign pixel perfect but what’s more important is that they [campaigns] are extremely relevant to the receiver. We saw the MVNO model as too slow for growth. If we partner with operators, we can triple or quadruple the speed, and reach the scalability that many advertisers are looking for.”

And while we’re reviewing the milestone statements from this Q&A (opinions that have new and significant meaning in view of the Vodafone Netherlands partnership), allow me to bring your attention to the one from Antti that speaks volumes (literally) about why operators would/should tie up with Blyk for a Blyk-branded service in the first place. In a word, brand.

As he put it: “Blyk is a simple end-to-end proposition that covers everything from ad platform, campaign management, user experience and audience management to technology.  Sometimes when I discuss this with operators, I say, ‘Think of Blyk as a Coke.’ as this example makes our role easier to understand. We have the recipe and we have the brand. People understand Blyk; young people understand what it means when we come to a country.  The recipe is how you make it work.  The operators have the factories for making all the refreshments they need, and they have their existing distribution channels. Basically, they have the works. But if they bring Coke in there, they can get so much more volume and so much more value. It’s a lot more interesting – and lucrative – to have Blyk as part of the operator offer. In other words, they can expand their reach to offering another well-known product.”

EXPERIENCE EXPERTS

Jonathan MacDonald – friend, esteemed colleague and, importantly, an architect of Blyk strategy – highlights another ace that plays in Blyk’s favor as it enters into this and other partnerships with mobile operators: breadth of offer.

Based on a background briefing with Antti Öhling, Blyk co-founder and CEO U.K., Jonathan pieces together what he calls the “Blyk partnership Blueprint” (which he shares in this post).

The model:

1)    Position yourself as an MVNO (as Blyk did) to perfect the process of linking brands with people. As Jonathan, an eyewitness to this stage of the company build-out observes: “Over time there was constant improvement of processes and tools which all connected to creating a true experience for Blyk members and creating the world’s first network as a media.”

2)    Productize this offer. Create a comprehensive capabilities mix whose components (in the case of Blyk) include: “Blyk brand, Blyk user experience, Blyk approach, Blyk audience management and of course, Blyk advertising sales.”)

3)    Partner with mobile operators. Use the existing infrastructure and capabilities of the mobile operator, experts at customer acquisition, billing and delivering great service.

Intrigued by this model, I caught up with Pekka Ala-Pietilä, Blyk co-founder and CEO, earlier this morning to deep-dive into Blyk’s real business objectives and the real value of brand in the scheme of mobile advertising. (My personal thanks to Irene Nyberg, Blyk Head of Analyst Relations and International Press, for arranging this briefing on short notice.)

AN EXCERPT OF THE Q&A WITH PEKKA ALA-PIETILÄ

Q: What have you achieved in the U.K. and how will you bring this to bear in your partnership with Vodafone Netherlands and others in the pipeline?

A: There are three elements. We have developed the capability to make ads relevant, that has allowed us to create an opt-in audience that want to receive this advertising. Beyond this, we have changed the whole context of advertising. Advertising ceases to exist because it is perceived as content. And that is one of the great aspirations of advertisers: to get to a level of relevance where what they send is perceived as valuable information, valuable content and important social currency. The fact that the audience responds positively to this response is reflected in the third element of this: our net advocacy scores. [By way of background, Net Advocacy is a measure of the volume of positive and negative word-of-mouth.] With over 40 percent, we’re at the same level as YouTube and Facebook. That is important for advertisers. Net advocacy is high and so are response rates. They have stayed at 25 percent for over 20 months now. [NOTE: Some 200 advertisers, including major brands such as Coca-Cola, L'Oreal and Sky, have run some 2,500 campaigns to date, reporting an average response rate of 25 percent.]

Q: You have achieved brand awareness without yourself spending on advertising and promotion. It worked in the U.K., but what will be the strategy for other countries? And how do you quantify your brand strength?

A: We believe the Blyk brand has several facets. The consumer-facing brand has the capability to spill over. Consumers are connected and can find out about our brand on the Internet or from other sources, so we believe that is how awareness will continue to grow. Our brand also has a great crossover effect when it comes to advertisers. We work with all six major advertising agencies and a large number of international and global brands. Finally, our brand is known to mobile operators who know what we achieved in the U.K. and what we plan to do in The Netherlands. Many forget that we have successfully recruited youth, the most difficult audience segment to reach because you have to get to them through the clutter of other media. We did this because youth is an extremely important segment for advertisers.

Q: The news is the partnership. But why not just go it alone?

A: Mobile advertising is not a technology game. Technologies can be bought. Of course, you need to have a good technology, and we have it. But it comes to the ability to deliver a seamless end-to-end media experience, which is why we are a media company. Operators are telecom companies and all the corporate DNA and KPIs [key performance indicators] are telco-driven. In the model [Vodafone Netherlands partnership] the operator brings the telco capability, the infrastructure, the billing and the ability to acquire customers and on a mass scale and feed that into an opt-in database that you need to make advertising work. We bring the audience management – the member experience – and we manage it for them. We bring the processes, how the media works between the members and the advertisers; and we bring the technology and the ad sales force. All this means we can get off to a flying start, and that’s a great benefit for operators.

Q: You have a kind of turnkey solution here; one that you say gets you off to a “flying start” when you move into a new country. What countries are on the roadmap?

A: We have a model that doesn’t only allow us to grow fast in a country. We can roll it out in number of countries in parallel.

Q: Such as?

A: We are moving in Europe and Asia. One of the guidelines we follow is the interest shown by advertisers, the markets they think are important. Asia is where broadband has not and never will take off to the same level that it has in Europe. There mobile will be THE digital media. There is no other digital advertising channel available.

Q: We hear that a lot – but why is advertising the major revenue source for every mass media except mobile? And where are the mobile operators? My own mobile advertising research (Mobile Advertising Research U.K.) revealed value chain confusion is to blame, along with a lack of awareness and education. What’s your take?

A: For one, the industry has tried to take the online experience – such as search and banner – and apply it to mobile. We have not yet come up with an adaptation that is right for the mobile context. It’s the same as in the 1990s, when we learned that you cannot force mobile on the Internet and saw that WAP didn’t work.

Second, operators have taken a purely technology approach. They have brought in multiple platforms, in some cases two, three, even four technology platforms, and none is generating revenues. So they have gone for piecemeal and not complete solutions and it’s only a recent revelation [among operators] that this isn’t going to work.

But awareness is changing and that will sharpen the focus on mobile advertising. Another development that has raised the stakes is the intention of the Internet companies – Google, Apple, Microsoft, Nokia and others – to make money and a business out of mobile advertising. So, there will be an interesting increase of efforts and tensions, and this will create an increased sense of urgency on the part of the operators to put more effort into mobile advertising. There will be a battle between players to decide who will be first to create the foundation and grow to become the game-changer in mobile advertising.

Q: My own research also revealed a growing concern that the number of mouths to feed in the value chain exceeds the revenues to share. How many mouths are in your value chain?

A: We have only three mouths to be fed: agencies, operator and us. So, there is more than enough to be shared and go around. If the value chain is a puzzle then, you are right, there are too many players that need to be taken care of, and you have more companies than revenues to go around. On the topic of costs, we can partner in way that the incremental cost for an operator to actually build this capability from the technical side is low. The production cost and what’s need to achieve economies of scale for producing [advertising] messages is also low. On top of that the incremental cost for us to connect [our media offering] with different operators is again low. So, when you look at the cost competitiveness of different alternative value chains or solutions – the one we have built is almost unbeatable. There are revenues to share and the partners involved [Blyk and the operator] already have an optimized cost structure.

Q: Lastly, a look back to your off-portal play. You have a partnership with Velti and a sharp focus on content portals and providers. What does this tell us about Blyk objectives? Some could argue this conflicts or that you could be spreading yourself too thin…

A: This is not a zero-sum game. That model only applies when the market is stagnant – but on the mobile side – content and consumption the market is on a growth curve. What happens off-portal – and promoting it – is a way of helping acquaint people with mobile and encouraging them to use services and content, and that is a benefit for everyone. A parallel is i-mode. There are open and closed spaces – and helping both to grow is a win-win for everyone.

Q: It’s about content and services. But what about apps? Companies tell me they are excited about apps and getting in now with advertising schemes and strategies. Is Blyk going to jump aboard the app bandwagon?

A: We will have an aspect in our business which will definitely, and in due course, be aligned with the elements you mentioned. Having said that, we don’t see the need to rush to the app stores – especially when our core business has so much potential. We have more then enough work and opportunities just focusing on what we do.

WHAT DOES THIS ALL MEAN?

My take: Connect the dots, and Blyk has its eye on the prize: developing the capabilities – in partnership with mobile operators – to be a game-changing engagement media in reach and response.

It’s also about leveling the playing field and helping mobile operators understand the terrible truth: mobile operators are no longer in the access business and focusing on growing subscriber numbers obliges them to overlook the very opportunities (such as mobile advertising) and value creation opportunities that Internet brands are rushing to embrace.

Indeed, let’s not forget how bullish Google CEO Eric Schmidt is on mobile advertising. In August 2008 during a guest spot on CNBC’s “Mad Money with Jim Cramer” he stated: “Over time, we will make more money from mobile advertising. The reason is because the mobile computer is more targeted. Think about it–you carry your phone everywhere; it knows all about you.”

But it’s more than a play to make sure the Internet – where network operators (who owned the networks) and media companies (that owned the content) lost out to Internet giants such as Google – doesn’t repeat itself.

Mobile has to be different, which is why the partners (Blyk and Vodafone Netherlands) have also agreed to maintain the Blyk brand to their mutual benefit. (Makes sense… Why start with a new brand when Blyk already has a high net advocacy rate and high profile with agencies and advertisers?) Against this backdrop, a Blyk brand in the arsenal is a great way to jumpstart a youth-focused mobile offer wrapped in a proven media model brands and agencies understand. Now it’s up to the partners to turn it on and turn up the volume (literally) to build the opt-in database of members that will attract the brands.

But does it have to stop with a youth brand? I doubt it. A look under the hood a the breadth of the Blyk offer tells us this is a turnkey solution that clever operators could brand and turn on for other customer segments that advertisers want to reach (other age groups or illusive prosumers, for example).

And why not?

After all, the solution is the same (Blyk built it); the value chain is manageable (always and only three mouths to feed); and a raft of recent research reports tell us people everywhere respond positively to mobile advertising that is relevant to their interests and respectful of their right to co-create their advertising experiences. (Or at least they have to have that option. No doubt the 90/10 rule that holds for the Internet – that 90 percent are lurkers and 10 percent are contributors who get involved – goes for the mobile Web, but it’s best to ask permission all the same, and it’s a great way to gather the demographic data that so far only the social networks can.)

And if this sounds far-fetched then consider a surprise finding that emerged from the interviews that fed into Mobile Advertising Research U.K.: a growth opportunity lies in building the capabilities mix to improve audience segmentation and deliver demographics brands and agencies know from other media.

From the report: “However, this opportunity also represents one of the greatest challenges to mobile operators. While they wield powerful data about their customers, many operators have not yet structured their organizations to deliver this in a form that brands and agencies appreciate. As one executive at an application provider put it: ‘Operators must be able to segment the audience into media segments that make sense. Till now they haven’t done a good job at that.’”

Maybe the Blyk Blueprint shows the way…

***

RELATED READING

·       Blyk: Inventory Doesn’t Make Mobile Operators Media Companies; Why Mobile Advertising Must Be Relevant

·       Ad-funded MVNO Blyk: Alive & Kicking – AND Coming Exclusively To MSG

·       Mobile Advertising Success: Orchestrate Don’t Dominate

·       PODCAST: Blyk COO Leif Fågelstedt On Stats, Response & Competitive Landscape; Mobile; Does Blyk Break The Mould?

·       Podcast: Blyk COO Leif Fågelstedt On Mobile Advertising,

In his view, mobile advertising is a form of mobile marketing that has many forms – all of which must be relevant to us. “The key across all platforms and forms of advertising – search, SMS, banners, and barcodes – is the relevance and the ability to target. Is mobile another screen, or the fourth screen, as some say? I would say it is the first screen. It’s always-on and always with us, and that means we can learn a lot more about the visitors [but not individual visitor] to a site or an ad campaign. We can know more about the people who interact with advertising, and we must use this to give them advertising to interact with.”

Put simply, relevancy rules (!) The message isn’t lost on MSG. Almost five years ago, I wrote the first report on mobile search and content discovery, where I preached the importance of delivering the right content to the right person – better yet in the right context. And that has been my message ever since. (Also reflected in the MSG strapline: At the intersection of content and context.) It’s where the action is!

And if you think it only applied to mobile content portals, then I have one word for you: App stores. This well-written and thoughtful column from Mark Lowenstein speaks volumes. He makes a plea for more personalization in application storefronts, and companies would do well to listen.

“I think the most important way to differentiate in this growing but increasingly crowded market is to deliver a more personalized, contextual applications experience. In most cases, all users launching an app store are presented with the same menu. There have been some early stage attempts to enable users to do some content configuration on operator or third party portals, sort of a wireless version of My Yahoo. But if we’re dealing with tens of thousands of apps and a small screen device with limited input capability, we have to get a lot smarter about what is presented to the user, with the magic being done in the background rather than relying on the user to self-configure.”

Where’s the connection with Blyk? The answer is evident when we consider (in my view) a  milestone quote/observation (below)from Antti Öhling, Blyk co-founder and CEO U.K.

Relevancy, as I illustrated above, plays a major role in content/app promotion and sales, and it will play an even larger role in mobile advertising.

I made this point in my advertising webinars (in fact, I used Blyk examples and slides in each). And I also addressed this issue in my Q&A with Antti, working it in between the questions that had to be asked following the controversial announcement last week that Blyk, the world’s first ad-funded MVNO, was moving to an operator partnership model. Why is Blyk making the switch? How can operators become media companies? And Why should they be wary of Internet players? These are just a few of the questions we explored in the following Q&A.

Q. First – let’s go back to the NewMediaAge article that started it all. I read your statement. My question is why?

A: We announced already in November 2008 that Blyk will change from MVNO to operator partnering model.  So this is not a new business strategy, just the next step in Blyk’s evolution.  I was surprised by the New Media Article.   The problem is that talking about media as we do is confusing for a lot of people, the NMA included. People fail to understand that being an MVNO is not important; it’s merely a means to an end.

When Blyk started out, the aim was to make mobile advertising work. And if you look in the traditional media, there isn’t a media in the world that wouldn’t somehow include the consumer of that media into the value chain. So you look at mobile and ask where is the consumer in the value chain? Because mobile companies come from a telco world, they were thrilled about the idea of inventory.  They think: Wow, we have inventory, let’s use it.  Well, there is plenty of inventory in the world. But inventory doesn’t make it a media. We looked around and said OK, we’re moving from an MVNO business model into a partnership model in order to roll our consumer offering out to a much larger audience and much quicker.

People have asked what is going to happen to our member [subscriber]  base. We spent a lot of energy and time creating a community of 200,000, so we are definitely going to take good care of our core assets. Everybody who works in the media industry understands how valuable an audience is.

Q: I would like to know what happened to the MVNO model and the ambitions behind it. You are not going to be an MVNO in the other markets in Europe…

A: Blyk’s goal is to become the biggest youth engagement media in the world.  The U.K. is a proof-of-concept. It works, and now it’s time to shift up a gear in expansion. We are switching from the MVNO model to operator partnerships in the U.K., Europe, and Asia. Blyk is currently validating the different options, and active negotiations are underway.

Why the switch? An MVNO means that you have to make up-front heavy investments. We needed to do it in the U.K. in order to get the whole machinery working. We needed to have access to all the tools that the operators have in their server rooms. Now that we understand how to use it [technology] we know how to help them. We know exactly how they can combine operator infrastructure with our ad engine and campaign management. We can make every campaign pixel perfect but what’s more important is that they [campaigns] are extremely relevant to the receiver. We saw the MVNO model as too slow for growth. If we partner with operators, we can triple or quadruple the speed, and reach the scalability that many advertisers are looking for.

Q: A question via Twitter from mobile advertising maven Helen Keegan. Let me confront you with what’s being said out there in the market place. For one, people are leaving Blyk. What do you have to say?

A: I’m not dismissing it.  We have never denied that we have streamlined the organization. That’s the modification we’ve done, so we are now steering this with a similar volume, but with a much lighter ship, which makes sense, especially in the current financial situation. We are seeing month on month growth in our advertising revenue, which in this environment is very promising.

Q: Tell me more about the partnership model.  How does the model function in practice and how many operators are you looking at in each market?

A: Blyk is a simple end-to-end proposition that covers everything from ad platform, campaign management, user experience, and audience management to technology.  Sometimes when I discuss this with operators, I say think of Blyk as a Coke as this example makes our role easier to understand. We have the recipe and we have the brand. People understand Blyk; young people understand what it means when we come to a country.  The recipe is how you make it work.  The operators have the factories for making all the refreshments they need, and they have their existing distribution channels. Basically, they have the works. But if they bring Coke in there, they can get so much more volume and so much more value. It’s a lot more interesting – and lucrative – to have Blyk as part of the operator offer. In other words, they can expand their reach to offering another well-known product.

Blyk is a brand focused on young consumers and our goal is to become the biggest youth engagement media in the world. We have deliberately chosen to target this audience, but it doesn’t mean that operators couldn’t work with us to make a similar offer to a different segment or to their entire customer base.  But then it wouldn’t be called Blyk at that point. As part of this partnership model, we’ll most likely choose to partner with one operator per market. Using what we bring is the fastest way for operators to get ahead of the game before their competition.

Q: Speaking of competition and competitive edge, who are Blyk’s competitors now that you are making the move from MVNO to mobile ad enabler?

A: The competitive landscape is actually the online Internet giants. It’s the companies we know from the Internet who are now wanting to make the operators dumb pipes, just selling data tariffs, so that they [the Internet giants] can deliver [their services/content/advertising] on top of that. If you think about the user experience, it’s not really a great model and it doesn’t create any value for the operators.  They [the operators] have no reason to be there and no role to play. But, if we add the engagement media, as we call Blyk Media, then the operators will have all the tools, all the bells and whistles under their control. They have it all.  We just show them how it needs to function in a way that no online player can replicate, a way that works more efficiently and creates a much better user experience. The Internet giants are treating mobile as part of their online offering – this will not work.  In Asia, for example, ‘online’ hardly exists, whereas mobile is widely used. Mobile really is the 7^th mass media.

Q: What does Blyk concretely bring to the table?

A: We have a full sales force, full understanding of how the media works, how it should be sold, how the campaign should be managed, and how you drive traffic to app sites.Based on 18 months’ research before launching in the U.K. in Sept 2007, and because we were a full MVNO with many specific custom-built functions, we have gained unprecedented expertise on how  [mobile advertising] works end to end. We call that magic dust, because it’s not enough to have just the hardware. You need to have a special understanding of the marketplace. Some people in the industry say Oh, we’ve bought this ad platform so now we are a media company.  No, you’re not. You might have a platform that can send stuff to people, but that doesn’t make you into a media company.

Q: What else do you need?

A: You have to start with an opted-in audience; you have to start with your full capabilities of profiling these people.  You then have to create a media environment where the people are happy interacting with the message that you are sending or the messages that they get in order to get the responses, and there you can use the profiling methods, there you can use the whole enrolment method.

You also have to bring something good to these people; a concept that they feel it is valuable to be part of. This personal value can be a free offer or it can be something else, but it has to be there to make communications relevant.  You have to get something out of that equation.  Getting a banner to your phone which you have not ordered gives you nothing.  If it’s not even profiled, that becomes spam and that leads to churn

Today, the way most of the mobile advertising works is not media.  We’ve been able to show that if you make it work, it becomes unprecedentedly efficient, with an average 25 percent response rate. This is what mobile can deliver, provided that – and again I repeat – you have an opted in audience, you have made them understand why it’s beneficial for them by profiling, by providing them relevant advertising which starts to feel like a service. By enhancing the user experience and making it richer than anything else, you achieve high response rates and you can call yourself a media company. That’s been completely missing from the telco industry because operators don’t think of themselves as a media, they think of themselves as a utility company providing a service.

Q. Just curious here. Why the focus on advertising campaigns when I have it from other agencies that search is red-hot?

A: Mobile search. Yes, that’s one revenue stream, obviously. But it’s not going to be the whole equation. It’s all based on a mobile Internet concept which, though it can provide information and all sorts of other things, hasn’t proven to be a great revenue generator per capita, and that’s important because click through rates are low and they will get even lower the more you have similar types of offerings.

In Japan, for example, a country that has had mobile Internet for four years, the lack of relevancy means the market is still under $1 billion and it’s a 120-million people market.  It’s dismally small because the click-through rates are so low, the value is low.  In the Blyk model, you get high response rates, and the value of any single customer is multiplied. A telco may think it needs to have 100 percent penetration. But we are a media company. A media company with say 3 or 6 percent of the entire U.K. population following it is still considered to be a big media player.

Q: I want to talk about your move to mobile portals. I’ll cover this further in my podcast with Leif [Fagelstedt] next week. But why don’t you just walk me through what you are doing and why…

A: We wanted to apply our methods to the traditional content business, which is suffering from the fact that service discovery and content discovery is so poor. Even in the iPhone App Store, the content is great but the problem becomes how do you find it? We know the importance of personalization and engagement from mobile advertising, and we felt the impact would be positive [on discovery] if we could push [suggest] content to people based on this [what we know about them]. And the numbers bear this out; they are very good.

We tested different types of offers and when we changed our consumer offer from the original one to the GBP15 a month allocation, the requests to join the network went up by 30 percent. That was a surprise because it normally doesn’t happen.  You make a lower offer, not a higher one, and people get more interested. With this new member offer, we gave people the flexibility to use Blyk as they prefer – voice, text, or data – and this gives us the opportunity to start testing data usage and finding how that correlates if we then begin to use our engagement media and start to push people to content. So, right now it’s about understanding all of the mechanics of this. We’re still building it, we’re still learning it, but we want to bring some new rules into that game as well.

Disclaimer: Bango is an MSG supporter.

If you think you read wrong when you understood from today’s report in NewMediaAge (NMA) that Blyk had indeed pulled the plug on its U.K. operations, you are absolutely right. My first reaction was disbelief, and I immediately called Blyk to get the story from the source. The story is: There is no story. [SEE UPDATE BELOW]

Jonathan MacDonald – a brave voice in the mobile advertising space, who, during his time at Blyk, was instrumental in developing the company’s strategy – has summarized the facts in this post. (And I see that NMA, just minutes ago, had retracted the headline that started it all.)

Judging from the level of excitement today, the timing couldn’t be better for a serious analysis of Blyk’s partnership strategy (and an update on negotiations with mobile operators). Another important development that needs some clarification: The announcement during Mobile World Congress that Velti and Blyk have sealed a deal to launch a content portal.

The intriguing part of the release (that no doubt got lost in the trade show shuffle): “The new portal acts as a conduit for Blyk members interested in content from relevant brands or lifestyle choices; which moves away from the traditional mobile portal business model.” (Hmmm – an interesting approach that potentially addresses the frequent complaints I hear from cool content providers and app developers frustrated by the red tape and – in some cases-  re-education  necessary to sell mobile operators on their offers.)

Blyk has a mobile savvy audience of 16-24 year olds (early-adopters), and has built its business on a deep understanding of social media marketing (the models and means to play matchmaker between customers and content/apps). Against this backdrop, the Blyk’s strategy opens up some interesting opportunities and raises some even more interesting questions: To what extent is it possible to encourage discovery based on insights into customer demographics (gathered through opt-in and other means)? In what way can personalization determine the content (and advertising, as Blyk does treat advertising as another form of content) Blyk users will accept and appreciate? Does this model displace carriers, or potentially help them in the inevitable transition from mobile operator to media company?

These are just a few of the questions I will discuss this week with Antti Öhrling, Blyk co-founder and U.K. CEO. We are scheduled for a catch-up call, but I have shifted gears and plan to produce a podcast based on this important discussion.

In the meantime, I invite you to listen in to this podcast from last year, one of MSG’s most popular series. (You can find the second in the Blyk series here.)

Please always feel free to suggest companies and individuals you would like to see on MSG. I am always interested in hearing your ideas!

One you shouldn’t miss: A podcast with a company that has turned the Google model on its head. It’s all about indexing the world around us for the delivery of hyper-targeted/hyper-local advertising and content recommendations.

UPDATE: This just in from Justin Pearse, editor of New Media Age, a publication I also respect and contribute to when the opportunity arises.

From his email:

We did not say Blyk has pulled the plug on it¹s U.K. operations. Our story
said the MVNO was being discontinued. Which is the case. We have not
retracted any headline.

Our story is solid, I would not have let it run if it were not. Of course
Blyk want to deny it. The job of a journalist is to print the news companies
do not want to get out. The rest is PR.

Point taken, Justin. I will most certainly ask Antti to define what he means by “discontinued”. I also plan to raise other matters (such as redundancies in the U.K.) during my call and include the answers in my next post on Blyk.

* * *

Is mobile advertising broken? Or is it just early days?

The jury is still out on that one. But there is no ignoring the gap between the amount of effort companies invest in mobile advertising campaigns and the actual results they produce.

Granted, some well-executed (translated: targeted) campaigns report an average response rate of 25%, (I’m thinking here of Blyk, the world’s first ad-funded MVNO turned media company that has purposely focused on the 16-24 year-old demographic, one that has expressed a keen interest in hearing what brands such as Coca-Cola and L’Oreal have to say). But these are the exception to the rule.

Do the math and click-through rates (CTRs) on mobile ads are generally between 1-3%. The good news: It’s more than the 0.05% CTRs brands get from online banner campaigns. The bad news: It still represents a 97-99% fail rate. Would you build a business model on a medium that fails to satisfy over 90% of customers? Not likely.

Read the rest of this column here.

Editor’s note: MSG has been chosen to undertake the Mobile Advertising U.K. research project. Endorsed by leading global mobile marketing organisations, the Interactive Advertising Bureau (IAB Europe), the Internet Advertising Bureau (IAB UK) and the Mobile Marketing Association (MMA), this research project will expertly document the state of the mobile advertising industry in the U.K., identify growth opportunities in the emerging mobile advertising marketplace, and benefit stakeholders, shareholders and consumers worldwide.

Mobile Advertising U.K., which enjoys the growing support of a cross-section of mobile operators, mobile companies, and big-name brands, represents the first phase of a wider pan-European and later global research project. Specifically tailored to the national needs of individual countries and their goal to educate the market and encourage discussions about emerging business models, industry issues, and areas of growth, this report will help companies engage with potential consumers and ultimately drive mobile advertising revenues and positive results.

Following an RFP (Request For Proposal), MSG was selected from among five research and consulting companies to take the lead role in Mobile Advertising U.K., conducting in-depth primary and secondary research — including one-on-one interviews with 25+ executives at a mix of agencies, enablers, and operators in the U.K. — as well as online and mobile surveys of U.K. consumers. This ambitious and far-reaching project will be coordinated by ÆNEAS Strategy Consulting and Management, an international consultancy firm founded by my esteemed colleague Tarik Fawzi that has driven the development of innovative mobile advertising strategies on behalf of players in the emerging business ecosystem since 2004.

Our research will be the first such project to include the views of both advertisers and consumers, thus providing the industry qualitative and quantitative insights into trends and attitudes. As we point out in the chart below, which shows the USPs of a range of mobile advertising research, our collaboration will quite literally set the bar.

To an extent, Mobile Advertising U.K. will follow the blueprint of Mobile Advertising Netherlands, a mobile advertising research project spearheaded by Tarik and his team that was sponsored by some 20+ companies including GroupM, a leading media investment management operation; telecom vendor Alcatel-Lucent; mobile operators and service providers Vodafone, T-Mobile, KPN, and Blyk; and full-service media agencies Starcom, Marvellous, MADS, Webads, DQ&A, Mindshare, Icemobile, and Mediaedge:CIA.

As Tarik put it in a press statement: “Following our success in the Netherlands, we are ready to rumble, and roll this out across Europe and the U.S., starting with the U.K., and later Germany. We are pleased to be working with Every Single One Of Us and MSearchGroove, and to have the endorsement of three of the leading global marketing organizations, strengthening us in our mission to make advertising mobile.”

Connect the dots, and it’s clear this is not about creating yet another mobile advertising research report. It’s about encouraging discussions about emerging business models, industry issues, and areas of growth to help companies engage with potential consumers and ultimately drive mobile advertising revenues and positive results.

Why?

Because the success of mobile advertising and subsidized models based on delivery of content, applications, and services, is dependent upon the willingness of participants to accept advertising on their mobile devices. Ultimately, users demand advertising that relates to their interests and is tailored to their specific needs. Anything else – as Every Single One Of Us founder Jonathan MacDonald is apt to point out - “will be perceived as ’spam’, which degrades the experience, increases the likelihood of churn, and breeds a distinct lack of trust.”

To build end-user trust, Every Single One Of Us calls on companies involved in the mobile advertising ecosystem to ensure content is delivered in accordance with the 3Ps: Permission (people will decide what brand messages they interact with); Privacy (people will decide where their data is collected and how it is used); and Preference (people will decide what content they find relevant).

The research project stage will conclude by the end of Q2 2009, and findings will be presented on June 25 in London, as part of a larger mobile advertising industry event organized by James Cameron, who has started his own events company to roll out a range of conferences, seminars and master-classes based on the findings and work of Every Single One of Us.

All of us at MSG wish James all the best in his new endeavor!

Disclaimer: MSG has partnered with Every Single One Of Us to conduct mobile advertising research in the U.K. and Gemany.

Why did I include a section on Blyk in my white paper?

Because the company has had phenomenal success with SMS/MMS campaigns, reporting an average 25 percent response rate to campaigns that harness the messaging technology to enable a conversation with users. No doubt this success is linked to Blyk’s bleeding-edge approach to mobile advertising (no spam – no way) and customer profiling (drilling down to deliver the right ad to the right person). However, in my white paper I also argue Blyk stands as an example of what a well-executed mobile advertising campaign can achieve – and one that mobile advertising newbies should note.

The bottom line: Strategy matters. If we accept advertising is content, then it’s clear advertisers/publishers can get a long way if they use existing technologies (SMS/MMS) and focus energy on crafting creative (and engaging) messages. As my dearest and most disruptive colleague Jonathan MacDonald points out: Advertising is in need of a re-think. It’s not about selling hard; it’s about listening harder to what consumers want. Jonathan (ex-Blyk) has obviously left his mark because Blyk excels in delivering advertising as content in a two-way conversation with customers. (For more background on Blyk, please check out this earlier analysis on MSG.)

Against this backdrop, it’s excellent timing to continue with part two of the audio interview marking Blyk’s first anniversary, which I conducted during a recent analyst briefing with Leif Fågelstedt, Blyk COO.

A message that comes through loud and clear: Blyk is not about warm-and-fuzzy business models. It is a serious and successful company that systematically collects and wields analytics (customer data and feedback) to drive high performance. Mobile advertising is just one area where Blyk’s approach pays off. In fact, Leif and I mused that the real money may be in Blyk’s ability to reality-check brands’ preconceived notions about what youth thinks, likes/dislikes, and will likely recommend to their friends.

Listen to the podcast here.

Before I deep dive into Leif’s views and my take, allow me to direct your attention to a recent research note from my esteemed colleague, Marek Pawlowski. (His thought-provoking analysis of mobile usability and user experience issues sets the bar, and his events attract some of the brightest minds in the business.)

We attended the same briefing, and have come to some similar conclusions. While I hint in my earlier post that Blyk should be considered as something other than an MVNO, Marek goes straight to the heart of the matter. He asks: Is it still appropriate to call Blyk an MVNO when the company’s real focus is on being a leading youth media?

While you’re making up your mind, some key figures tell us Blyk has long achieved this status. Some 100 brands have run some 1,000 campaigns on Blyk, reporting an average response rate of 25 percent. The response rate to some campaigns is much higher.

Seeing is believing (and also understanding why the campaigns struck such a chord with youth), so I asked Blyk to create a space where you can check them out for yourself. My personal thanks to Dan French and his colleagues who made this great graphic and the revolving carousel of mobile advertising case studies. Enjoy!

KEY STATS: ARPU isn’t relevant to Blyk and neither is CPM. The performance measurement that matters is Cost Per Response (CPR), which Leif says is “around 50p [pence] for Blyk. If you compare that with other media channels which our advertisers are looking at…[our] Cost Per Response is industry-leading.” Leif notes that other advertising channels cost much more if you want the same impact. The range is GBP1.50 (a figure he mentions in the podcast) to GBP2.20 (a figure Blyk presented during the analyst briefing). The point is: Blyk measures engagement (response), which is what counts on a personal device like mobile.

ADVERTSING MIX: Blyk sells each advertising SMS for GBP0.07 and each MMS for GBP0.22. “So the cost is 7 [pence] to send out the SMS and then 7 [pence] for every individual that is replying to your message.” The power of that two-way conversation is what allows Blyk to measure performance in CPR rather than CPM, a term “irrelevant to what Blyk is practicing.” Blyk assumed the lion’s share of pitches would be push-campaigns, but that has changed. “Probably 95 percent of everything we are doing right now is a combination of SMS and MMS, and [that] it can be linked to different websites….There are a lot of advertisers that have spent a lot of money creating their web portals and everything for mobile, and they want to drive traffic there.”

ROADMAP: Blyk is purposely targeting the countries where brands already spend the most to get their message across: Germany, Spain, Belgium, and The Netherlands. But prepare for some surprises from Blyk. “The first aim is to become the biggest youth media in Europe, and that is what we have communicated and that’s [what] we deliver. We are also looking to other kinds of opportunities outside Europe as well, but that’s not something I can reveal today.”

FREE SELLS: Blyk is ad-funded (hence, free to users). But it’s not an easy act to follow. Rivals would have to make significant investments in analytics tools and target the right growth markets. “We have invested a lot of money in profiling, ad engines, [as well as ways] to do booking and planning [of ads], and so on.” Leif also reports Blyk has “more partners than competitors right now in the marketplace.”

***

Shortly after this interview, Andrew Grill, MSG friend and frequent contributor, posted on a new ad-funded model called Tomato Plus from Croatian mobile operator Vip, a me-too Blyk model he strongly suggests we monitor moving forward. (You can check out the full post at London Calling here.)

By way of background, the brains behind this ad-funded model is global mobile advertising company Out There Media. The company has launched Mobucks, which it describes as a cross operator, cross advertiser marketplace, matching demand and supply for advertising over mobile phones. Mobucks effectively enables the creation of ad-funded tariffs for MNOs and MVNOs.

From the press release: “This mobile advertising marketplace enables consumers to sign-up, share their data, and receive targeted mobile SMS and MMS campaigns – which is exchanged for free airtime.” Out There Media reports response rates of “up to 75 percent.” Matthias Grundböeck, Vip Residential Marketing Director, is upbeat about his decision to launch an ad-funded sub-brand. “Mobucks AdFund by Out There Media gives us the opportunity to offer genuinely interesting, relevant and useful information to our customer base,” he said in a press statement.

I sent an email to Out There Media requesting a more in-depth briefing to answer key questions: What are the nuts and bolts of Mobucks and who is involved to date? How is customer data collected and what visibility does it provide into user preferences? How many ads, in what form (SMS/MMS) and from which brands? And the list goes on.

In the meantime, you may want to check out this related discussion at MobHappy.

My take: Blyk is a tough act to follow because it understands the business and the pivotal importance of customer analytics. Does the advance of similar models represent competition? Not in the markets that top the Blyk agenda. There, Blyk can protect its turf. However, the advance of ad-funded models such as Tomato Plus sends a clear message to mobile operators that they must choose their course.

To borrow from my esteemed colleague Chetan Sharma and his must-read mobile advertising book, Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market: Mobile operators must decide soon whether they wish to be access companies (pipes) or audience companies (media companies). If the goal is the latter, then they would do well to borrow a page from Blyk (and others) and focus on enabling an engaging advertising conversation with consumers (thereby gaining users’ trust and access to some key customer data) before other companies (search companies, social networks, media brands etc…) beat them to it.

Why the focus on Blyk? For one, it’s a perfect fit with my passion to analyze all things mobile at the intersection of content and context. Blyk has honed its customer profiling to send its users (between the ages of 16 and 24 – the toughest demographic there is) only those advertising messages that they (the users) deem relevant and valuable. Blyk understands the requirement to conduct its business at these crossroads (where content and context meet) and that is rare. It merits a closer look, and I recently attended an analyst roundtable hosted by Blyk executives to find out more.

Listen to the podcast here.

Before I list some of the podcast highlights, allow me to focus on one presentation slide that stood out during the roundtable – one I believe speaks volumes about the brand power Blyk has built over just one year. (No wonder esteemed colleagues such as Emeka Obiodu at Ovum speculate on whether a mobile operator might not just buy up Blyk to pull ahead in mobile advertising.)

At first glance, the slide documents that Blyk has the highest “net advocacy score” among mobile networks. (Translated: 40 percent of those polled would recommend Blyk.) In my view, the real story is the company Blyk now keeps. It trails the likes of YouTube and Facebook – and has pulled ahead of MSN, MySpace and Bebo.

My take: It may not have been Blyk’s strategy to be in the same league as social networks and Internet giants – but Blyk has made the grade.

And that without spending “a single pound on marketing.” Leif tells me Blyk has become a word-of-mouth brand with strong appeal among members of a choice demographic of trendsetters, early-adopters and lead users he calls “The Recommenders.” True to the name, these young people try new things and pass them around to their friends. (Little wonder why friend-tells-a-friend referrals are how 6 out of 10 Blyk users learned about the offer and joined up.)

Can Blyk cash in on this phenomenon to enhance its appeal to brands as a provider of mobile advertising (more correctly mobile social advertising) content to youth?

I put the question to Leif during the podcast. Blyk isn’t pursuing a wider strategy around providing content and enabling mobile social networking – but it could. For now, however, research and focus groups confirm his views that users can and will get content and services from other sources and other kinds of channels. “The evolution of mobile advertising will not go to [in the direction of] more content. It’s about dialogue …it’s not about [adopting] online business models or anything like that.”

During the roundtable, I learned that some companies have approached Blyk – a numbers-run company that takes customer analytics seriously – with a strong interest in purchasing a white-label solution that would get them up to speed and pave the way for them to engage users, collect and collate data, and so effectively advertise to empowered consumers. Will Blyk do it? There are discussions but the company will stick to its knitting – at least for now.

Other podcast highlights:

ADVERTISING & ENGAGEMENT: Combining the two is a core value at Blyk and a key competitive advantage that has allowed Blyk to chalk up some impressive stats, including a 25 percent response rate among Blyk users to mobile advertising campaigns. In fact, the campaign by Penguin to introduce the book Slam by author Nick Hornby resulted in a 67 percent response rate. Over half (51 percent) of users downloaded an audio clip (a preview of the opening chapters) to their mobile phone. Mobile advertising is in need of a re-think (as Jonathan MacDonald is quite quick to point out). Leif agrees and sees some encouraging progress in this direction. “The industry is starting to realize that mobile advertising equates to engaging young people. It’s a communication tool.”

MESSAGING & MESSAGES: Blyk messaging traffic is fairly evenly split between SMS and MMS. Interactive campaigns generally consist of 2 SMS text messages and one MMS. The first text message asks the user if they want to know about a specific brand or offer; the second continues the conversation; and the MMS comes as a follow-up. It’s more natural for someone in the 16-24 year-old demographic to receive and respond to an SMS as opposed to clicking through to a WAP link. (I learned during the roundtable that even if the user says “no” to the first SMS, indicating they are not interested, they will get a message back acknowledging that choice and asking them if they would be interested in something else. This advertising is a conversation.)

Will other forms of advertising, such as display and search advertising, be the “next big thing” in mobile advertising? Not if it’s a conversation. “People don’t want to be advertised to. They want an experience,” as Leif put it. “I think if I take the research …there was a lot of discussion about what would be the driving pattern in mobile advertising. With the [advent of] display advertising, it will be search advertising. [However,] the latest trend reports I have seen … talk about the lion’s share of all investments already now [and] moving forward is based on message advertising. This is for the simple reason that it’s the most common [communication] pattern and the way people use their phones.”

NO-BRAINER CAMPAIGNS: During the roundtable, Blyk asked the big question: Why has mobile advertising not been happening, and why is it happening now with Blyk? Clearly, the emphasis on engagement is part of the answer. But Blyk also has ambitious plans underway to make mobile advertising campaigns (planning, execution and measurement) a no-brainer for brands. Leif couldn’t disclose details, but it’s clear Blyk want to make this dead simple. A welcome change from the bureaucracy brands typically face when they put in a call to a mobile operator.

(Indeed, many advertisers with significant budgets have told me they threw in the towel after making dozens of calls around mobile operators and their ad partners. Even Shaun Gregory, Blyk Managing Director, UK, revealed his own experiment -posing as a brand with a GBP25,000 mobile advertising budget – ended up with him talking to “no less than 27 touch points” at which point he gave up.)

As Leif put it: “We have been working with a lot of big media agencies, and we have developed booking and planning tools that they can use. We also have a couple of frame agreements now in place with the biggest media companies in the U.K.”

CUSTOMER DATA & MORE: These are Blyk’s crown jewels. Users freely share their preferences (filling out customer profiles to qualify for the service in the first place) and freely share their opinions with Blyk on what they think is hot – and not. Case in point is this user response to the question: Are you proud to be British? ^Y/N

“Being British is about drivin’ in a german car 2 an Irish pub 4 a Belgian beer, then on way 2 ya home, grabbin’ an Indian curry or a Turkish kebab, 2 sit on a Swedish sofa and watch USA shows on a Japanese TV. And most of all being suspicious of anything Foreign. Oh and.. Only in Britain .. Can u get a pizza 2 ya home faster than ambulance. Only in Britain do banks leave both doors open and chain pens 2 the counter. Also Supermarkets make sick people walk to the back of the shop 4 prescriptions whilst healthy people get their fags at front of shop. We might be british but by hell we’re funny!”

Read between the lines and it’s clear that Blyk is doing more than delivering mobile advertising and recording the response. It has become a brand users trust with their ideas, feelings and personal opinions. As Leif pointed out: “People are opting in [and] we have a lot of insight into [youth] trends.” This unique position – between the brands and the consumers – is money in the bank, so no wonder Blyk is “accelerating” the development of this “inside piece” of the mobile advertising equation. Knowing why users think a campaign is off the mark is as important as understanding why it is a success. “There are many brands that – before they run a campaign – want to test the waters and know ‘do I have the right value proposition, do I have the right messages.’ It can even be that advertisers want to know what TV shows young people are watching.”

My take: Companies will no doubt try to copy the Blyk model (in fact, MSG has reported on a similar ad-funded scheme here). But it’ll take more than free services to convince consumers to offer frequent and honest feedback to ad campaigns.

Remember Blyk isn’t only delivering mobile advertising. The combination of analytics systems and solutions (supplied by Xtract, a pioneer in social advertising intelligence whose claim to fame is its ability to tap into social interactions, behavior data and other dataflow to create dynamic real-time customer profiles) and Blyk’s own conviction that advertising is and must remain a two-way conversation position at the center of the exchange and allow it to keep its finger on the pulse of users long after the campaign is over. And that’s a powerful place to be.

More in Part 2 of this podcast series – so check back!

My take: SMSPup Mobile joins ComTel’s stable of segment-focused mobile offerings and confirms that Blyk’s model is on the money. But Blyk is keenly focused on the 18-24 demographic, a successful strategy that allows brands to address only that target group. ComTel’s new offer is for everyone (mainly 18-40), so I have to wonder if a service that caters to such a broad segment of the population will allow brands the reach, relevancy, results and engagement they require to make mobile advertising a viable business.

Does a niche market buy most mobile content? It sure looks that way in Australia. According to the latest Australian Mobile Phone Lifestyle Index published by the Australian Interactive Media Industry Association, fewer mobile users are buying content; but those making the purchases are buying more. Only 33 percent of respondents said they bought mobile content in the last year, a drop from 2007 numbers. However, their game purchases increased by 50 percent, and paid SMS alerts also increased 60 percent. Content users want in the future includes maps, news and weather. Only 16 percent have used social networking and instant messaging functions, according to the study.

My take: These numbers should get us thinking… Fewer people are buying more content. Is it the users or the content that is holding back market growth? Answering this fundamental question will help us seek a solution. If users aren’t consuming content because they don’t know how, then we need to focus on improving usability/discoverability. If users know how to get content but would rather not because there’s nothing on offer they like, then we need to fix that (and also make creating and distributing content more of a no-brainer). Either way, the industry is at a critical crossroads.

Which markets lead in mobile Web usage? Two new reports shed some light on this. They disagree on several points – as you would expect – but do manage to agree on one thing: The numbers are on the rise. According to Juniper Research, the community of mobile Internet service users will increase from 577 million to 1.7 billion by 2013. Juniper attributes the increased demand to an increase in Web 2.0 applications, such as social networking, user generated content and instant messaging. Juniper reckons the Far East and China are the largest mobile Web markets, with nearly 416 billion users by 2013. South America is the market with the greatest untapped potential. Meanwhile, research firm Infonetics Research isn’t quite so upbeat about data and Internet use. It expects demand for basic voice services to drive growth in the number of mobile subscribers in Brazil, Russia, India and China. In its Fixed and Mobile Subscribers report, Infonetics reported that the number of mobile subscribers rose 31 percent from 2006 to 2007, reaching 5.2 billion by 2011. Cellular mobile broadband subscribers are expected to grow at a 104 percent compound annual rate from 2007 to 2011.

My take: No real surprises here – but worthwhile stats for our reports/ presentations.

Are operators and service providers holding back profits? A new survey of mobile industry sources from Valista, a digital commerce software and managed services company, indicates mobile operators and service providers are a source of frustration. Eighty percent of respondents said that new mobile campaigns take three to nine months to launch (!). Industry experts say that this should take less than one month. Also, none of the survey respondents said they implemented customer loyalty programs to motivate customers to make either initial or repeat purchases. Instead, more than 70 percent opt to offer promotions, such as discounts, free trials and product bundling. Regardless, opinions on where those purchases will be generated are mixed: 51 percent of respondents predicted that the broadband/cable channel would experience the greatest growth for content purchases in the next two years; 48 percent said mobile would post more growth.

My take: Another report that should have alarm bells ringing in boardrooms everywhere. Mobile content is a retail business where time-to-market is critical. Time is a luxury and having to wait three to nine months to launch campaigns is a risky business indeed!