There are those who think the subscription model for mobile content is the way to go. There are others who think content will largely be free and that advertising will be the predominant revenue model.
For those of us who are in the second camp, one of the compelling reasons that advertising is alluring on the mobile platform is that it’s the only device that is always on and always with you. And, unlike the fuzzy metrics of a “household,” the mobile phone user is a single individual, who drinks Coke or Cabernet, likes NASCAR or knitting. The mobile phone is the ultimate platform for targeted advertising, a way to address ads to a more granular audience and the Holy Grail to the cable and broadcast industry.
The mobile phone may be ideal in its form factor and shape for addressable or targeted advertising, but still has a long way to go to be a practical player in the game. One of the main reasons for this is that most mobile users still don’t consume video and, for those that do, the experience can be slow and trying. I spoke with Adrian Hall, CMO of Bytemobile, about his company’s work in making the mobile phone a friendlier platform for video and, thus, for serving targeted advertising.
Hall says that their customers report that 30 to 50 percent of their data traffic is video and multimedia. (Group deployments of Bytemobile’s products include T-Mobile, Vodaphone, China Mobile and Orange, among others). The main product is the Media Fidelity service, which enables video on phones with no additional technology or extra clients. “It’s all done from the server within the network we have. we have a software-based platform with multiple different services, from web adaptation to video adaptation, and even a service that filters content,” he says.
“Most mass market phones can’t cope with video’s intensive, big files,” adds Hall. “Because of where we sit in the network, we can change the format to something the phone can accept. We look at that device and adapt, whether it’s video or web to the limitations of that device and serve the right amount and type of data.”
Of course, using a solution like Bytemobile’s Media Fidelity service means that a carrier can offer new data services without asking customers to swap out handsets or download software. “The chances of signing up for a data package rather than just standard voice are massively increased,” says Hall.
The end user also doesn’t see how Bytemobile adapts to the inconsistencies of the network itself. “We dynamically look at the speed of the network and we will measure and change the amount of data that can be accepted, protecting the integrity of the video,” says Hall. “Even on a slow link where there’s no way to send video, you can and it’s extremely viewable. It makes the mass market phone look like a more sophisticated smart phone.”
Of course, that doesn’t mean that smart phones can’t use a boost.
Now, back to the topic I started wtih: targeted advertising. What role does Bytemobile play in this?
Bytemobile sits within the networks of the 92 carriers it works with and has access to all of the subscriber data passing through, which means that it has the ability to deliver relevant and personalized ads based on contextual, behavioral and demographic targeting.
“What’s very exciting is that advertising is one way carrier can fund its overall model of much higher bandwidth networks,” says Hall. “From an end user perspective, we won’t accept a bill that’s ten times higher. Advertising is a palatable way to make this affordable.”
Not everyone agrees with Hall’s assessment on this, but he points to a survey Bytemobile did that revealed that 80 percent of users would accept advertising if they could get a video for free.
Bytemobile has the capability to insert a pre-roll or post-roll. “What’s fascinating is that because of where we sit in the network, we see user behavior,” says Hall. “If you like sports, the carrier can start targeting ads of interest to you rather than something completely irrelevant. Then, therefore, the amount of dollars attributable to click-through rate is higher, which helps the industry fund the new business model.”
In this regard, carriers and their partners face the same spectre as do cable and broadcasters: privacy rights. Hall stresses that the data it sees and uses is the carrier’s data, and that the carrier is charged with abiding by privacy laws. “We enable the carrier to use the data that they see anyway,” he says. “That’s a really critical point. We’re not taking data out of the network, but enabling carriers to use it more effectively within the legal constraints.”
Though the reality is that wide-spread adoption of addressable advertising for the mobile phone isn’t going to happen tomorrow, it’s just too good of an opportunity for advertisers to ignore. Even–or perhaps especially–for broadcasters and cablecasters developing advanced advertising strategies, the possibilities of targeted advertising on the mobile phone will be too enticing to ignore.