It is no surprise! According to a report just released from BI intelligence, programmatic will account for over $18.2 billion in U.S. digital ad revenues in 2018, up from just $3.1 billion in 2013.

So why is it creating such waves within the industry? Read this analysis to find out.
Industry Opinion by Charlie Faulkner, head of EMEA and APAC, Manage.com

Programmatic’s technical sophistication, which has some of the world’s brightest data scientists working on it, combined with its constant evolution has drawn interest from all areas of the advertising industry. Ad exchanges have subsequently taken note, with more and more releasing all their inventory to programmatic. As a result, major brand powerhouses such as Mondelez have reassigned all of their budgets accordingly.

With the industry moving so quickly it is essential that brands don’t get left behind. Rapid advancements in data analysis tools have given brands increasingly sophisticated ways of acting on insight. This in turn, is leading to an arms race to fully understand consumers searching out increasingly niche, longtail content based on their personal interests.

Mobile driving the evolution

With the traditional advertising model of ‘shouting’ at eyeballs being replaced by a new landscape where content needs to be relevant and interesting and engaging, a number of trends are emerging in the mobile space. Mobile is opening up a world of possibilities based on the fact that consumers carry their devices at all times, plus constant rises in smartphone penetration and the development of new technologies:

• Geolocation
  iBeacon is an exciting new technology that is driving opportunities to geolocate content and adverts. For example, in the near future a consumer may be reading about fashion on their favourite mobile website site as they shop for a new summer wardrobe. As they walk past individual shops the adverts presented to them will then change based on the shop in question and the range they would like to promote. Exciting stuff!
• Video advertising
  Clearly, consumers’ attention spans are very short and increasingly so with the advent of social media platforms whose objective is to deliver instant entertainment. To cut through therefore, advertisers need to take advantage of dynamic content. Video provides the perfect opportunity for this based on the increasing access of streaming services due to 3G and 4G being integrated into mobile price plans as standard. The way in which platforms such as Facebook can run videos instantly will also provide instant consumer engagement opportunities.
• Native advertising
  As consumer demands for engaging content increase, so do their potential frustrations with irrelevant and uninspiring advertising content. Advancements in native advertising therefore take into consideration the platform in which the content is being presented to sync adverts more smoothly. This will be particularly significant for social media behemoths such as Facebook and Twitter who are in the early infancy of trying to extract true value from their huge subscriber bases.

Ready to switch on?

When it comes to brand marketing, there is a general consensus that strong data capabilities will separate the winners and losers over the next three to five years. Consequently, as programmatic’s strength is based on the data it generates, smarter decisions can be made. Brands like AOL UK and Kimberly Clark have already become clear advocates for the industry, future proofing their businesses (and their job roles and responsibilities) by embracing programmatic.

Programmatic delivers guaranteed returns, with inventory that is not performing simply switched off. Don’t be put off by the technical sophistication – most providers will be adept at translating the outputs to business benefits with ease. With brand competition increasingly fierce, programmatic really is a no brainer.

It’s no secret that Facebook is a digital advertising behemoth. eMarketer predicts Facebook will serve over 21% of all mobile ads this year, which earns Facebook the number two spot in all digital ad sales, second only to Google.

That being said, Facebook “buy now” ads simply won’t work. Here’s why.
Industry Opinion by David Rekuc, Ripen eCommerce

For most eCommerce sites, a great ad is made up of three key components:
1. The product(s) sold in the ad appeals to its target audience.
2. The audience has the means to buy the item.
3. The ad is shown at a time when the audience is ready to buy.

Advertising on Facebook Marketplace falls short here because retailers cannot target users based on a signal of their intent to buy. In recent years, advertising has improved with Facebook Ad Exchange (FBX), where retailers can target users who have already been to their site but did not complete a purchase. Unfortunately, there is no indication that the “buy now” button will be offered through FBX.

On the other hand, Google’s ads are inherently more valuable to eCommerce sites because searching for a product indicates a consumer is ready (or almost ready) to purchase an item. Google ads pass all three of the criteria above – and they don’t require a third party ad unit to support the transaction.

Unless Facebook plans to integrate the new button into its Ad Exchange, the “buy now” feature will not reach potential customers when they are ready to shop. This means the “buy now” button will only ever be useful for impulse products, which only make up a small fraction of the eCommerce industry. Without retargeting capabilities, the efficacy of the “buy now” button will always lag behind eCommerce ads on Google and FBX.

For what it’s worth, Twitter’s plan to incorporate eCommerce advertising also fails to target consumers when they are ready to buy. However, Twitter ads are new and exciting; they don’t suffer the same negative perception as ads on Facebook. Consumers may be more willing to give them a shot and retailers more willing to wait for a reasonable ROI.

David Rekuc (@DaveRekuc) is the marketing director at Ripen eCommerce, a full-service agency that specializes in building custom solutions for online retailers. For more information, visit www.ripenecommerce.com.

Payment is often seen as a difficult step in commerce, so in recent years a lot of effort has been going into finding new and better ways to allow customers to pay.

Now PayPal and Starbucks are piloting a new payment scheme that may be the easiest ever, and it is based around the new Gear 2 smartwatch from Samsung.

The transaction is very simple from the customer’s perspective, and consists of the following steps:

Notice that this transaction did not require a wallet, a card, any cash, or even the need to remove a mobile phone from your pocket. And there is added security because the barista sees an image of the person that is authorized to use that specific device for payment.

The pilot is taking place within the Starbucks store on the PayPal campus in San Jose, California, so clearly it is a very pilot-friendly location. However, it is good to see companies trying out new approaches to payments.

PayPal has not indicated any time frame when this might be rolled out to the world in general, but PayPal senior PR manager Kathy Chui has said that “overall, PayPal employees that have used Beacon and/or Samsung Gear 2 smartwatch have loved their experience and are excited for the larger rollout.”

China is by far the largest mobile market in the world with over 800 million active subscribers, over 250 million mobile internet users and over 200 million new handsets sold each year.

Even at this scale, the growth hasn’t slowed, with 8 to 10 million new subscribers are still being added each month (the size of a medium size operator in many countries!)

Having a basic understanding of this massive market – with its huge potential for advertising – is important for everyone that is involved in the mobile marketing industry.

3 Chinese Mobile Operators – All Government Controlled!

One of the most basic facets of the Chinese mobile market, in addition to the raw size, is the core operations/culture of the mobile carriers themselves. All three Chinese carriers – China Mobile, China Unicom, China Telecom – operate both mobile and landline networks, and are essentially state-owned enterprises, even though their shares are traded on the public markets.

Every few years, the leadership of these carriers change places in a kind of “musical chairs” movement. Major policies/strategies of these carriers are controlled by the central government ministries not to optimize profits, but rather to optimize execution of the government’s long term plans. (see this Guardian article)

3G penetration in China: low but growing

Just over a year after officially starting 3G deployments in China, there are now over 30 million 3G users in the market, with ~30% of new subscribers being 3G users.

Unfortunately only accounts for less than 4% of the installed base. Lack of number portability, multiple standards, spotty coverage, higher price plans, immaturity of TDS-CDMA and limited choices of 3G handsets have all contributed to slower than expected adoption rates. 3G penetration will undoubtedly accelerate in the coming 1-2 years, but it will take at least 3-4 more years before it will overtake 2G user base.

Chinese Smartphones

Although behind Western markets in 3G adoption, China’s smartphone penetration is on par with most developed markets (25-30%). At the end of the day, most experts will agree that advance handsets have done more to change user behavior than availability of higher network speeds. A single handset, the iPhone, has transformed the US market from mobile industry laggard into a trendsetter.

The penetration of the iPhone in China is far below developed markets. They account for less than 1% of all handsets in the market (iPhones compose over 70% of smartphones in Japan), compared to ~40% market share for Nokia (Symbian) phones in China. The price premiums of the iPhone and lack of Chinese apps/iTunes adoption has made it less attractive in the market, but lower cost iPhone copies and Android smartphones will grow in market share in the near future.

By early next year, industry experts expect to see 800-1,000RMB ($120 to $150) Android smartphones hit the market By contrast, the iPhone was selling for 10,000RMB ($1,500) when released, though they are now available for less than 6,000RMB ($900), and less than 3,000RMB ($450) with a contract.

ShanZhaiJi (fakes/clones) of leading smartphones sell for 400-800RMB/unit ($60 to $120). Custom versions of these ShanZhaiJi phones can be turned around in a matter of weeks vs. the months or years of the big brands, and often with advanced/unique features not available in the originals.

Chinese consumers spend 10% of annual salary on phones

China’s consumer behavior is also a bit different than Western markets.

In the US, people complain about spending $99 for a new phone (0.25% of average US annual salary), whereas the average Chinese consumers won’t hesitate to spend 2000-3000RMB ($300-$450 or ~10% of average Chinese annual salary) for a newly released phone. 56% of phones sold in China in 2009 were above 1500RMB.

The mobile phone is not only a communication/productivity tool but more importantly a status symbol or fashion accessory for the modern Chinese consumer, and worthy of the investment.

Highly developed SMS and WAP industry

Well before American Idol introduced SMS to the US market, China had broad base adoption of text messages. In 2005, SMS adoption was already above 95%. And even today, SMS is still the preferred means of communication for the mobile phone (in fact, preferred over voice).

And rather than surfing the shrunken internet sites that the iPhone popularized in the US, Chinese mobile users still prefer the “mobile internet” or WAP sites (Wireless Application Protocol sites) that is viewable on even primitive 2G phones.

Where are the mobile ads in China today?

Although China’s mobile industry as a whole is huge, its mobile marketing spend has not yet followed. There are certainly large amounts of money flowing between consumers and carriers for telecom, data fees and value added services fees, but very little flowing between advertisers and mobile properties/agencies.

The total mobile marketing spend in China was between 100-200 million USD in 2009 (ranges widely depending on source), which represents about ~0.6% of total ad spend in the market. Given the reach, precision, richness, timeliness and influence of this medium, it’s only a matter of time before these numbers spike.

Even though the total ad budgets have not fully materialized as we’d all like, there is certainly strong interest and intent on the part of major brands to include mobile as part of their marketing mix. Unfortunately, most of them don’t know the best way to do this, and sadly, neither do their agencies of record. Some more progressive agencies have already formed mobile focused arms to service their clients, but even these organizations are understaffed/under-resourced and often included in the client’s planning process only as an afterthought.

For those brands that have tried mobile, most have found it to complement their existing marketing mix quite well and could often greatly enhance the effectiveness of their campaigns with a minimal cost impact. We have seen clients with over 10X ROI for budgets they’ve put into mobile campaigns or marketing elements. Response rates, redemption rates and conversion rates are all much higher on mobile vs. online or traditional media, and what’s more, mobile is more measurable and allow for long term communication with the target customer once they respond.

What ads work in China?

A wide range of mobile formats are being actively tried and used in the Chinese market.

• The most popular mobile elements for brands to utilize are still the more traditional mobile site, mobile messaging, mobile newsletters, cross media call-to-action, web-to-mobile integration and even mobile couponing.
• A high amount of interest seems to be expressed for custom mobile apps, mobile social networks, mobile search, mobile CRM in the past few quarters. Mobile apps that truly deliver value for the user will find its audience grows virally, whereas those that are overly advertiser centric will get little to no traction.
• 2D barcode, Bluetooth and augmented reality seem to have lost some of their former luster.

No matter what technologies or mobile elements are chosen, the key is making sure that mobile elements are integrated into the overall marketing plan from the beginning while keeping mobile media’s advantages in mind and integrated with all the traditional media elements.

Secondly, it is important to focus on creating “long-term” trusted relationships with your customers via the mobile medium – don’t just spam them, give them value. The ROI on mobile spending within campaigns is proving to be quite high. We’ve seen a number of campaigns where mobile KPI can exceed that of Web portion even at a fraction of the costs.

Where are we headed?

Over the next few years, the telecom infrastructure will continue to be refined and optimized as will the handset technology the consumers buy. Mobile marketing formats will get even richer and more engaging as marketers learn what works on this medium and how best to integrate it with what they already do.

Just as users have grown to depend on mobile in their daily lives, marketing will grow to depend on mobile to enhance the effectiveness of their campaigns and tie together the disparate pieces in their marketing plans. Mobile handsets as the center of communication, computing and media consumption in China will come faster than most will expect.

For more information on China, read these MobiAD articles:

• 3 Hong Kong Launches Ad-funded Mobile TV

• Using Mobile To Reach Next Generation Fashion Consumers
(a Chinese mobile marketing fashion game)

• University Students Happy To Receive Mobile Ads
(a survey of Chinese students’ attitudes about mobile)

Alvin Wang Graylin is the CEO and co-founder of mInfo Inc. (www.minfo.com), a leading mobile advertising and mobile search provider in China.

The article, written by Mona Elesseily, VP of Online Marketing Strategy at Page Zero Media, outlines differences between traditional paid search and mobile paid search and explains how they lead to a difference in value of keywords, the difference in targeting options, and an increased importance of being in the first couple of results.

In terms of how consumers use their mobile device, the article explains that in general mobile advertising works best for low price products as people searching on the mobile web tend to be looking for short, quick-to-consume information. This leads to great results for actions such as downloading music/ringtones, finding places to eat or ordering fast foods.

Because of this difference in consumer use the article advises to keep queries short. However the article mitigates this by saying that with an increase in uptake of voice search longer queries may produce results in the future.

The article then looks at the different targeting options that are on offer with mobile devices. These include handset types or specific operators. It goes without saying that if you are selling an iPhone app you don’t want your advert to appear on Android devices!

One of the most important thing that the article underline is that with mobile screens being substantially smaller than computer screens, it is vital that your ad appears in the first couple of positions. The authors explains that there is a massive decrease in CTR and ROI if the ads appear lower down the screen as users don’t tend to go to the bottom of the screen.

The writer also looks into how the use of :

• Google maps
• Incentives
• Locations
• Click to call
• The App Store

To read the first part of the article Click Here, and to read the second part Click Here.

The article, contributed by Dave Morgan, CEO of New York Based TV marketing agency Simulmedia and previously founder of TACODA, suggests that LBS will take between 20% and 25% of the ad revenue of local media by 2014!

He explains several reasons for the expected impact on local media. Among them are:

• Mobile user base has massive scale.
• It is a powerful person-to-person-to-place connectivity.
• It is the most “relevant” media platform ever.
• It is cheap.
• And it is fun.

He goes on to compare LBS to “craigslist on steroids”.

To read the full article please click Here

In this article, we’ll look at some of the recent moves by Microsoft related to mobile and mobile advertising to see what may be in store for this high profile company.

They have a long track record of success in technology businesses and big ambitions in the mobile area, but given their recent missteps in mobile, time may be running out.

Overall, the past year has been a good period for Microsoft. In their basic line of business, PC operating systems, the new Windows 7 OS seems to be gaining popularity. In the area of online search, their revamped search product Bing and partnership with Yahoo! is emerging as an alternative to Google. In fact, Microsoft just recently reported record revenues and net profits for the 2010 fiscal year of $62 billion and $18 billion respectively.

But there is one noticeable dark cloud in an otherwise sunny outlook for Microsoft: Mobile.

Despite pouring significant resources into mobile, Microsoft has not yet managed to come out with a mobile product or platform that catches the imagination and support of consumers and developers. Over time, as the number of mobile users continues to greatly outpace the number of PCs, and as mobile takes over more of the world’s communications, connectivity, and internet access, this could become a major problem for the company.

Windows Mobile gives way to Windows Phone 7

Windows Mobile launched several years ago, but never became a truly mainstream mobile OS. Over the past 3 years, Windows Mobile has been overtaken in the market by RIM, Apple’s iPhone, and most recently by Google’s Android.

Today, according to the latest Mobile Metrics report from AdMob, Windows Mobile represents only about 2% of the smart phone ad requests that they see on their network. The AdMob chart below also indicates that Windows Mobile users are less active on their phones then, for example, Android or iPhone users. This may be due to a wider variety of apps that are available for the iPhone or Android platforms, or perhaps due to the ease of use and user interfaces of the OS themselves.

Clearly Microsoft understands the weak position of Windows Mobile, and at the Mobile World Congress in Barcelona this year they announced a successor product. Windows Phone 7 is a completely new mobile operating system, much more graphically focused, easier to navigate. It was intended to help users aggregate and manage information from multiple sources, and initial reviews have been basically quite positive. (see Engadget’s Windows Phone 7 in-depth preview).

However, one big problem remains – timing. Windows Phone 7 is not scheduled to appear in handsets before October or November 2010 at the earliest. Based on past experience, it is likely to take at least a year beyond this before everything is in place for consumer demand for the platform to really take hold. (As an example, the first Android handset appeared in September 2008, but it wasn’t until the holiday season December 2009 that a reasonable variety of handsets and applications became available making the platform much more attractive).

This means that the currently most popular mobile platforms such as iPhone and Android will have another 14 to 18 months to continue to build on their lead over Microsoft. At a recent Worldwide Partner Conference, Microsoft CEO Steve Ballmer acknowledged that the company had missed the boat, saying “On the phone side we missed a generation with Windows Mobile.”

Kin: The end of Microsoft branded handsets?

Both of Microsoft’s major competitors in the mobile arena have produced mobile handsets as part of their overall strategy.

In the case of Apple, the iPhone, the iPod Touch, and the iPad all share the same operating system, and can in general run the same applications. This results in a larger installed base which is attractive for developers. These products have all been hugely successful and a big financial contributor for Apple.

At Google the situation is quite different. They launched the Nexus One Android phone in early 2010, reportedly in order to jumpstart the Android platform as well as revolutionize how mobile phones were sold.

Now, about 6 months later, the Nexus One represents only about 2% of the overall Android installed base and Google is quietly stopping the product. However, given the vibrancy and growth rate of the Android market, Google Chairman & CEO Eric Schmidt believes that the product successfully achieved its objectives. In an interview in the Telegraph, Schmidt commented about the Nexus One: “It was so successful, we didn’t have to do a second one. We would view that as positive but people criticized us heavily for that.”

Unfortunately for Microsoft, they have not been able to replicate the handset success of either Apple or Google.

In May 2010, Microsoft released the Kin One and Kin Two phones on the Verizon network in the US. These phones were particularly aimed at the youth market by focusing on functions such as texting, status updates, and video. To a large degree, these phones were the follow-on from Microsoft’s acquisition two years previously of Danger – the maker of Sidekick, a handset very popular with the US youth market.

Unfortunately for Microsoft, in the time between the Danger acquisition and the Kin launch, consumer expectations had greatly moved on. Thanks to the iPhone and Android platforms, consumers had learned how interesting and engaging a full smartphone platform could be, with great web access and thousands of creative to choose from.

And these were features that the Kin could not offer. As a result, the Kin had very limited appeal, and just 7 weeks after launch, Microsoft killed the product. Today the final units are being offered for sale on Amazon for $0.01. In the future, it looks as though Microsoft will have to rely solely on handsets produced by other companies such as as HTC, LG, Samsung, and Dell.

While any major tech company is bound to launch a product which misses the market every once in awhile, a “miss” of this magnitude seems to indicate that Microsoft is still having a hard time understanding the mobile market and building a compelling product strategy.

Windows phone 7: Developer love, Monetization, & Mobile Ads

Given Microsoft’s current position and history in mobile, many people believe that Windows Phone 7 (WinPho7 for short) is the company’s last real chance to be a major competitor in this market. Microsoft has a long history of persistently pursuing their objectives, and has often been able to slowly wear their competitors down while improving their own products. In this case however, with the likes of Google and Apple as competitors, this strategy is unlikely to work.

When WinPho7 finally arrives, one of the biggest factors determining its success – or lack of success – will be its attractiveness to developers. Developer interest leads to more interesting applications, and this of course leads to more customers. Attracting new developers will be especially important for WinPho7, as the old Windows Mobile apps will not work on the new platform.

There are quite a few things that influence the level of developer interest in a platform, but clearly one of the most important is the ability to monetize an application. This in turn depends greatly on a couple of key factors:

• Installed base: Whether the application is distributed free or for a fee, having a large base of consumers on a platform gives the developer more opportunities to make money.

  Unfortunately for Microsoft, it will take quite a long time for WinPho7 to build up a significantly large user base. Android, iPhone, and Symbian are already well established, and other new platforms have already launched in the market (e.g. webOS from HP-Palm and Nokia’s MeeGo).

  We suspect that in the early days, Microsoft will need to pay developers to bring their applications to WinPho7 as there won’t be sufficient pull for them to make the commitment themselves.

• Mobile Advertising: Advertising is likely to be one of the primary sources of revenue from applications, and as such the ability for a mobile platform to support great advertising may be one of the key factors for its success. This certainly seems to be a focus for both Apple and Google who have both been spending a lot of time and energy in the area.

Microsoft was one of the first of the big PC/internet companies to get involved with mobile advertising, acquiring mobile ad network ScreenTonic in May, 2007. They have acquired a number of other advertising related companies – including aQuantive, AdECN, Rapt, and YaData – and have rolled them together into a division called Microsoft Advertising. So it is clear that the company sees the long term importance of being a part of the advertising value chain, although much of this activity has been in the online advertising area.

So one of the big questions that is now surrounding WinPho7 is how well it will support monetization through advertising.

Tiles, Apps, and Toast

To date there has not been much information released about advertising in WinPho7, but recently at the Cannes Lions conference in France Microsoft’s GM for Strategy and Business Development – Corporate R&D, Kostas Mallios gave a presentation intended to shed some light on this question.

In the presentation, Kostas showed off the three key advertising related features of Windows Phone 7, and said that he expects the product to be “an ad serving machine that marketers will love”!

Overall we’re not convinced that these features will provide the competitive differentiation the Microsoft needs to succeed in this market. Here is some information about the 3 key features as explained by Kostas, and you can view the presentation itself down below.

• Apps: Of course the new OS will run apps, but Kostas explained that the Microsoft difference will be that the download of apps will be more seamless for consumers, and will better preserve the brand experience.

  Although the App Store for WinPho7 was not running yet so there was no actual demonstration, he explained that when a consumer is browsing a brand’s mobile site and finds an app they want to download, the download will happen directly without the need to go first to any app store, thus providing a better, more consistently branded experience.



• Tiles: These appear to be similar to application icons, but they have an additional feature which makes them relevant to advertising.

  According to Kostas they are actually “dynamic tiles that you can push information to as an advertiser to stay in touch with your customer.” Basically, after an app has been downloaded, if the customer decides to “pin” the application to their homescreen, then the brand can dynamically send messages which will appear on the tile.

• Toast The third means of communication with a consumer is through a technology called “Toast.”

  This is useful when the downloaded application is not running and the consumer has not set up his tile to be dynamic. In this situation, the advertiser is still able to push an advertising message to the consumer, but it appears above the array of tiles instead of within a tile.

Here is the presentation itself.

While all 3 of these features look interesting, they seem to be primarily focused on allowing advertisers to “push” information at consumers, rather than enabling advertisers to engage or entertain or be useful for consumers.

By comparison, Apple’s iAd system is all about trying to provide a seamless, rich, engaging experience (see MobiAD article on iAd), while Google is working on ways to improve mobile search, fully integrate location, and add technologies such as image recognition (see Google Goggles).

Given what we’ve seen from other mobile advertising platforms, it is hard to see at this stage how the WinPho7 features recently announced will provide the necessary competitive advantages to let Microsoft win the mobile advertising battle.

What does the future hold?

It is clear that Microsoft is still willing to invest significantly into their mobile business, and as Microsoft remains a very strong company with enormous resources, they can never be completely counted out of any market.

However, it seems that time maybe be quickly running out for the company: their main competitors are each rapidly building a base of users and developers which is very large and very enthusiastic. In addition, there is already an incredibly wide range of compelling applications available on each of the other platforms.

Windows Phone 7 maybe Microsoft’s last real shot at being a presence in the mobile market. However, to overcome the disadvantage of no-installed base, they will have to come up with some incredible features to excite developers and consumers alike. Although Windows Phone 7 is clearly a much improved mobile platform, from what we’ve seen so far, it doesn’t seem to be the “game-changer” that Microsoft needs to become a top competitor in the emerging mobile market.

At MobiAD News, we usually look primarily at the business impact of mobile marketing and mobile services. But there is another trend, perhaps even more important, which is the critical role that mobile can play in reaching the billions of people in emerging regions that are not yet connected via internet.

This week Ferhan and Jim Cook had the pleasure of speaking with Kazi Islam, CEO of Grameenphone IT about the amazing projects they are working on in Bangladesh. In this interview, Kazi talks about his vision of how mobile can be used to address issues such as health and education in emerging nations, as well as the important role that mobile advertising will play.

Kazi will also be a keynote speaker at MLOVE, taking place June 23-25 in Berlin.

A Focus On Connection

Kazi Islam has perhaps the perfect background for working in the area of social entrepreneurship – he was born in Bangladesh then did most of his schooling in the US. This combination he says, “gives me an interesting view of both worlds – I can personally relate to the problems, and also personally relate to the solutions.”

For the past several years Kazi has been CEO of Grameenphone IT, the company that provides the communications and infrastructure for Grameenphone, Bangladesh’s innovative mobile operator. As such, he has been able to actively push the use of mobile to address some of the major challenges that are facing Bangladesh.

“In a country such as Bangladesh, there is no shortage of challenges and issues. And frankly there is no shortage of technologies that are relevant either. What is missing is the bridge – the connection – between these. And that bridge is often the relevant business model,” Kazi said. “The focus of Grameenphone and myself has been to connect the relevant technologies with the existing needs, through a relevant business model that works for the community in question.”

Grameenphone

Grameenphone was started in 1997 as a joint venture between Norwegian mobile operator Telenor and Grameen Bank, the internationally acclaimed micro-finance pioneer. Grameen Bank and its founder, Dr Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006, for their efforts their efforts to create economic and social development from below.

Grameenphone now has over 26 million subscribers, and is the largest mobile operator in Bangladesh.

Village Phone Lady

Early on, Grameenphone became quite famous for their Village Phone Program. Kazi explains that when Dr. Yunus was first starting up Grameenphone, he would tell people about mobile phones and they would often be very skeptical. They would ask him how – in a country whose population could often not even afford adequate food or clothing – how could he expect people to afford to purchase a handset and also pay the monthly subscription.

And then Dr. Yunus realized that in fact, most people do not need to buy phones, and perhaps a better idea would be to rent the phones to them. And so the Village Phone Program was born.

Under this program, Grameenphone would provide a mobile phone to a respected member of a village – usually a woman – on a rental basis. That person would then in turn rent the phone on a per minute basis to other people in the village. These by-the-minute rentals would cover her rental cost plus generate a small income. And the big benefit was that the entire town would gain access to a modern communications, and become linked to the rest of the country.

This program won the “GSM in the Community” award at 2000 global GSM Congress (now called Mobile World Congress), and was one of the reasons that Grameenphone grew so quickly. Kazi explained that the Village Phone was the dominant business model for Grameenphone up through 2003, and even today, with radically lower costs of handsets and services, there are still over 200,000 “village phone ladies” operating in Bangladesh.

Locally Relevant Economic Models

Now that mobile phones have become an integral part of Bangladesh life, Grameenphone is working to use the reach of mobile to address several other challenges that face the country – in areas such as education, health, and agriculture.

However, Kazi’s belief is that the focus cannot be only about technology. “The most important thing is that first we have to understand the local context, and understand the local economics of the project,” he says.

For example, in the area of medicine, Bangladesh has very limited resources for the size of the population, with one hospital per 2.5 million people. But the local context goes beyond this. “You also have to consider that in parts of the country people are very religious, and when they fall ill, they may believe it is actually a punishment from God.”

So it is important for Bangladesh to develop a better overall understanding of the current health situation in the country, as well as getting people accustomed to more modern approaches to medicine. Grameenphone has been working on a pilot project with the Mayo Clinic which uses mobile phones to collect medical data from across the country and link it directly to the Mayo Clinic website for analysis. At the same time, the system can be used to provide medical reminder messages to the people.

Education

According to Kazi, another key focus area is education. Increasing the level of education is clearly a very high priority for Bangladesh, but currently the drop out rate from 5th grade to 10th grade is over 80%.

Grameen innovates here as well: “Grameenphone is currently working with UNICEF on a trial service which supplies on-demand lessons over mobile. These lessons would include not only the complete subject content, but they would also provide access to an automatically generated test” says Kazi.

Although this type of lesson would fit very naturally on modern smartphones, because of the installed base of devices in Bangladesh, everything has to be made to work on much lower end “feature phones”.

Mobile Advertising & Marketing

Although not yet a major factor in the Bangladesh market, Kazi is a strong believer in the power of mobile advertising. “The mobile-based service industry will become the largest platform to deliver products and services, and mobile advertising will play a great role,” he says.

In fact, mobile advertising will be important in several ways:

First of all, it will be critical for raising awareness and promoting the various social programs that exist; there is really no other media channel with the ability to reach all segments of the population as well as mobile can.

Second, mobile can be used to actually sell the products and services. Being linked with Grameen bank, there is clearly a strong belief in bringing financial services to the rural population, and mobile can play a critical role.

Finally, there will be ad-funded services: “Mobile advertising will support an important part of the business model where revenue from the ad lowers the cost of service delivered to the end user, i.e. education and health awareness”, Kazi explained.

The Relevant Business Model Rules

In each of these projects, as well as many others that he is passionate to talk about, Kazi explains that Grameenphone focuses on satisfying three objectives:

In Kazi’s opinion, mobile is the right media to focus on: “There is certainly a convergence of technology happening around both the TV and the PC, but convergence around the mobile is happening with a much broader range of technologies and at a much faster pace.”
 
So in the longer term, Grameenphone and Kazi believe that mobile technology is destined to play an increasingly vital role in solving the unique issues facing countries such at Bangladesh. But always when coupled with an equally innovative business model.

Russell Berry from AppCreatives shares his strategies that may do the trick for you!

Unfortunately new apps can sit in the Apps store unnoticed very easily. To ensure this doesn’t happen to you, be sure you are ready with a plan to market your app before it goes live. Here are 10 steps to keep in mind.

1. Pre-launch promotion

Start building buzz about your app before it has launched. Email people who write about things that relate to your app and see if they will talk up the upcoming release of your app. On launch day, being listed as “New” in the App Store should help sales significantly, but remember, by the second day your app will no longer be on the front page of new apps, so planning passed this is crucial. Especially when, according to mobile-advertising company, Adwhirl says you need around 2,500 daily downloads to feature within the top 100 popular iPhone apps.

2. Lite or Demo Version

If you’re planning on selling your app, then you may want to consider releases a “Free” or “Lite” version of the paid app along with the real thing. What we’ve seen is that people are more likely to buy an app if they’ve had a chance to try it, they are more likely to spend money on it later.

You may also want to consider using Apple’s In-App Payment Mechanism to make money within free apps. This service allows you to charge for additional content in an app. In the case of a game, you’d let the users complete levels 1 & 2, but to progress they have to download the app to unlock the other levels.

3. Free Apps

There are a couple of ways to make money from free apps: Freemium content – offer a demo / freeware version of your app which then upsells to a fully paid version. This has the advantage of encouraging consumers to download the app with a full understanding of the costs involved.

In application advertising – tried and tested by people like Greystripe, HOvr and others. Feature ads running either in a wrapped manner (loading and exit screens of the app) or integrated within the app. Money is split between the technology provider, the content owner and the carrier (if they are distributing).

In a nutshell, just because it’s free doesn’t mean you can’t make money from it.

4. Reviews = Sales

A great review on a major blog may create sustainable sales for you. Technorati can provide you with a current list of bloggers. Use a conversational style, get right to the point and include a promo code. When you have sites like Gizmodo that get 3 million pageviews per day, this can easily translate to sales for you.

5. Send out a Press Release.

PRMac, a free (or almost free) press release distribution service, and the MacNN (Macintosh News Network) syndicate (free to submit) are definitely worth the price of submission.

6. Incorporate social media

If your users make the high score on his or her favorite game, it is a good idea to make it easy for the user to post it to Facebook or Twitter. Think about how your app can incorporate social media and build that functionality into your app. At a minimum, set up a fan page for your app on Facebook and Twitter and use them as platforms to communicate with your users and get feedback on your app. Comments are even crawled and tracked by the major search engines.

7. Plan for multiple releases

Don’t pack your app with every single feature you want to offer in the very first release. Make your dream list for the app and make sure that the app is designed to incorporate all of the features at some time in the future. Then periodically drop new versions of the app to boost app store sales.

8. Timing Is Everything

A high volume of downloads occur over the weekend, starting Friday afternoon, so by releasing in the middle of the week, you kick start the download process.

9. Create New Uses

When upgrading, think beyond content and consider upgrading the app’s functions. When the app platform’s operating system is upgraded, consider how to use the new features to enhance your app to make it more fun, interesting or useful.

You will also want to continue evolving your app to enlarge its marketing potential.

10. Get Featured in The App Store

Whilst a top spot in the App Store’s rankings is a sure fire way to guarantee the success of your app, unfortunately you can’t choose to be included, you are simply chosen. But why not contact iTunes and ask to be featured. It never hurts to ask and you never know, you might reach someone on a good day!

About the Author
Russell Berry is Director of AppCreatives, a fast growing SME that offers mobile/PDA application solutions that help organisations communicate with their customers through custom mobile devices. Leveraging our industry intelligence and technological background, we design and build mobile applications that are customer-friendly and facilitate easy and quick data processing.

For more information please see [http://www.appcreatives.co.uk]

Orange is one of the leading mobile operator groups in the world, and over the past several years they have been very active in the area of mobile advertising and marketing.

We recently met with Xavier Perret, VP of Advertising Solutions at Orange, who talked about Orange’s mobile advertising strategy and explained how their fundamental approach is based on segmentation-segmentation-segmentation.

Orange and digital advertising

Orange is the key brand of France Telecom, one of the world’s leading telecommunications operators. With over 130 million customers in over 30 countries, the Orange brand now covers internet, television and mobile services.

Advertising already has a strong history within Orange. The Orange Advertising Network has 200 salespeople in Europe, and sells advertising space on Orange sites and those of various partner companies. More recently Orange acquired premium ad network Unanimis in the UK.

Ad sales already generate about €150million in revenue per year, and represent the 2nd largest ad sales network in France and the 3rd biggest in the UK.

Mobile Advertising – Phase 1

As Orange’s original ad network was focused on internet advertising, it was natural that their first steps into mobile were based on the internet model.

About 4 years ago Orange took the first step by starting to sell banner ads on the Orange portal sites. This is now an active business in 9 countries, and represents a significant and growing business for Orange.

Direct marketing was another activity that came from the web model. Orange had been active in web based direct marketing using email, so several years ago they setup a push marketing program in France called Mobile Gagnant. This is an SMS and MMS based program that provides promotions and offers to opted-in subscribers.

As Xavier explained, these programs were relatively easy for Orange to implement, “We were already doing it on the web and we moved over to mobile without having to create something totally new like other operators might have to.”

The New Approach – Integration & Interactivity

More recently, Orange has taken a new approach to mobile advertising which is much more profile and targeting oriented. The Orange strategy focuses now on two things:

The first of these, integration with product portfolio, really seems to be at the heart of the Orange approach. Xavier explained that the biggest question they work on is how to match the product portfolio (in other words the service bundles that Orange offers) to specific Orange customer segments.

“With mobile, there are so many devices and so many services, you need segments and that this is the real value of the operator. We rely on two business models – one is billing and one is advertising – and we need to be able to mix between the two. This is very different from the ISP business where you bundle everything, set a flat fee and that is it.”

The second key focus – Interactivity – is concerned with really understanding consumer interactivity and how that is linked to how you create the media.

Xavier feels that this is something that Orange learned largely through their partnership with Blyk.

“You have to keep engaging the customer, this was Blyk’s core value. For example, when a customer receives SMS and responds, they then get an MMS response, etc. This is very different from Mobile Gagnant which was more of a one-shot marketing approach.”

This type of interactive, messaging-based advertising was at the heart of Blyk’s business, and is now also becoming a core part of Orange advertising. (read MobiAD Article, Designing Blyk – The First Ad-Funded Mobile Operator)

“Monkey”

As an example of where this new focus on interactivity is happening, Xavier talked about Orange’s new product Monkey.

“This focus on interactivity is a core value that we have really nurtured, especially for the youth market. In UK for example, we have the “Monkey” product, where an interactive conversation with brands is actually a key part of the overall value bundle and value proposal.”

Monkey is a service plan offered in the UK targeted primarily at youth who love music. The package includes message-based interactive ads, but they are not optional and consumers don’t earn extra for more watching the ads – they are an integral part of the total package.

“We thought about this offer for a long time, did consumer research, and made an offer that is targeted just at this segment,” Xavier said.

In order to convince advertisers to use these new ads, Orange wanted to establish a new brand for this type of advertising. Orange Shots is the name of the advertising product that Orange sells to brands who want to advertise to the Monkey audience.

Although selling these new ads may be quite different from other mobile ads, Xavier points out that it is easier because they can be sold by Unanimis, the Orange subsidiary. “Its all part of the plan,” he added.

(see MobiAD article on “Orange Shots”: Mobile Marketing For Orange Monkey Customers)

Subscriber data & privacy

The final subject we discussed was the use of subscribers’ personal data. Operators possess a large amount of information about each of their subscribers, usually including their browsing habits, calling patterns, favorite sites, location, SMS messages, etc. The dilemma has always been what is the appropriate way for them to use this information.

Once again Orange seems to approach this issue from a customer segmentation and proposition perspective, viewing privacy as basically one more element that should be a part of the customer offer.

Xavier explained, “The question is to make it a real value proposal, so that the customer understands what they are giving and what they are getting. For example, some subscribers might accept to be tracked in order to receive a better quality of service.”

“We think that the trends for users is to be more are willing to make this exchange. But we will do it segment by segment. There may be some that are willing to share their data, there may be others that want to control it. We need to have value proposals for both of these, and we have to be transparent with this.”

“We know that we have to make good use of this customer data, but we have to do it in a way that we can remain a trusted partner. The good thing is that we have been in the advertising world for many years, so we already know a lot about this business. Customer data is definitely a gold mine, but it can turn into copper if you use it badly.”

Matching value proposals

But this approach towards subscriber information has not proven easy for Orange so far. “The challenge when evaluating a mobile service is to find a value proposal for the consumers that matches with the value for advertisers. We are doing lots of analysis, but to be honest we have not yet really found a match that would make sense with the right profile, the right offer, etc.”

There are of course some trials underway. For example a major retailer in France has teamed up with Orange to offer location-triggered ads and coupons to a group of the

store’s loyalty card holders.