From the Mobile Content & Marketing Expo
San Jose, CA—How can you miss with a panel on making money? This session, with Joe Laszlo, director of advertising at the Interactive Advertising Bureau (IAB), moderating a panel made up of mobile video executives, was packed. Each executive spoke about his or her company’s business model. Susan Cashen, vp of marketing at mywaves described the company as a handset agnostic mobile video service that delivers video around the world. “Because we’re free, we’re dependent on advertising,” she said. “We’ve also recently launched commerce with entertainment. When a consumer is immersed in an entertainment experience like watching a free Beyonce video, it’s a natural for them to be able to buy Beyonce content, both virtual and real goods.”
Transpera CEO Frank Barbieri described his company as “building the largest premium ad-supported mobile video network.” Networks in Motion is an applications and platform provider for the mobile phone, focused on search and navigation, with a subscription-based model. “Navigation and search is alive and well on the paid platform,” said CEO Doug Antone. Bytemobile CMO Adrian Hall said his company provides services to the carrier as an enabler to the end-user. “We basically enable the mobile Internet for the end-user,” he said. “And we see user-profile information which is useful for contextual and behavioral targeted advertising.”
On the advertising front, asked Laszlo, are advertisers are willing to pay a premium for mobile? Bytemobile’s Hall said the one thing that appears obvious is that the more targeted the ad, the more valuable. Barbieri said that mobile has far more focus of attention than the PC, where the screen could be displaying several windows and other distractions simultaneously. “For brand advertisers, that increased attention leads to better numbers,” he said. “I think the news is fairly good in these early days.” Cashen said about 6.5 million unique come to mywaves every month; they come twice a week and spend 20 minutes, watching 2 or 3 minute segments. “A 30-second pre-roll just won’t cut it,” she said. “In the short term, there are big opportunities to connect with consumers via direct marketing. There’s genius to leverage the video entertainment on the handset from the point of view of a brand. Taking what works on the web on mobile is taking baby steps,. You have this incredible storefront on the handset. Click-to-call, click-to-buy: there’s no better measurement. Leveraging the entertainment to create action is where we feel good.”
Cashen said that transcoding video for the consumer gives her company information on the consumers. “We have the ability to target by DMA, time of day, and type of handset,” she reported.
Everyone is trying to drive personalization and the consistency of brand across multiple devices, noted Hall and more personalized advertising based on user needs will create a dramatically stronger click-through rate. The mobile marketing campaign has to have ways to interact with the user, said Barbieri. “We work with our brand advertisers to brainstorm the mobile marketing campaign and how to target the audience.”
Antone observed that his company’s business model is different in that the user pays $10/month to navigate. “It’s no longer how you get from Point A to Point B,” he said. “We want someone to turn it on in the morning for real-time traffic information. Not just where’s the local movie theater but what’s playing and when. It’s all available on your client-server application on your handset. See us as a publisher that’s getting your content out to people. Our customers are the carriers, who sell to their customers. That’s our strategy. All of them have this $10 price point. At some point it’ll be $5 and beyond that it will be zero, a free application. The relevance of this is that when someone is mobile, they’re also motivated. When you’re in a browsing application and looking for a restaurant, you’re motivated to go. Targeted, pertinent advertising that can happen during that search is what we’re focused on.”
But to get the numbers, the only way the carriers can make that work is to draw in big percentages of their users. To get 50 to 60 percent, they’ll have to change the pricing model. “We’re betting on the idea that they’re going to try to do that and not roll over,” said Antone
Focusing on how the Networks in Motion product will one day be free, Antone talked about the challenge. “It depends how good we all are at creating the economics on the back end,” he said. “That listing of Italian restaurants in your neighborhood, for example. Would you find it offensive to get a manipulated search, where the restaurant that’s farther away pays to be listed first? When do consumers say, Forget it – you’re giving me something I don’t want. We have to do this in a way that there’s enough economics but the consumer still likes it.”
Finally, panelists spoke about the role of the carrier, between the extremes of a dumb pipe and a walled garden. “There is a smart pipe concept where there’s a tremendous amount of marketing and merchandising power that any one would be a fool to ignore, because they have a connection to the user with billing inserts, with product marketing on the deck,” said Barbieri. “There’s a relationship that can be used to promote content well. We have to move from a programming-type mentality of carriers to more of a merchandising, marketing and retail type of relationship. And that’s good for us and for the consumer as well. We have yet to get to the point where there are tremendous marketing and retailing competencies at some of the carriers, but that’ll change.
The carriers could move faster,” added Hall. “They are desperately trying to be smart pipes and it’s incumbent on us to work with them to become smarter. While they’re starting to recognize they’re sitting in a unique place and make smarter use of the user profiles they see. By doing that effectively, they’ll continue to be smart pipes or, in some cases become smarter pipes.”