But Market Explosion Still 1 or 2 Years Away

The Mobile Advertise and Mobile Content Convention organized by 11prozent in Munich brought 160 participants and speakers together for 2 days of exiting talks, panels and exhibits. While the days were full of good presentations there were also enough breaks and a great evening party sponsored by Vodafone for networking and lots of discussion. Read about the key topics discussed at the conference, and the state of the German market.

Three big topics prevailed at the event

– Size of market and expected growth rates
– Entry barriers such as lack of flat rates, of standards and of marketing budgets
– Examples of great campaigns that have been successfully implemented
Speakers at the event mainly came from Advertising Agencies such as the YOC Group, Mindshare and BAM, mobile service providers such the LUUPay, the big German media houses Axel Springer AG and Tomorrow Focus AG plus the manufacturer Nokia Siemens Networks.

Entry barriers need to be removed for major growth to happen
The conference started with a presentation by Klaus Menhorn from M:Metrics. He showed market data that clearly indicates exponential growth expectations within the next 5 years. This reflected also the general consensus of the meeting. However, the immediate outlook for 2008 and early 2009 was a bit more low key.

The general public is still too concerned about uncontrollable additional costs. While flat rates are starting to show up in the German market they are not yet common. Dr. Ulrich Schmidt (Axel Springer Verlag) gave the great example of the “Bild” campaign that they ran last October. Customers were offered a prepaid phone card including free unlimited internet access. The card was a huge success. This showed that the interest is there but access to flatrates needs to be made easy.

While Smartphones are clearly on the rise there is still a major part of the population using traditional phones that have only phone + camera + SMS functionality. This is expected to change in the next few year. However, due to the fact that there is generally a two-year subscription cycle for phones, the transition is not happening as fast as the new products are arriving on the market.

The acceptance for Smartphones in the general public is also low due to the non-intuitive interfaces that prevail for many products. The introduction of the iPhone from Apple certainly has set a new standard that is expected to bring ease-of-use to the mobile world. Harald Neidhard (Smaato) as Vice Chairman of Dotmobi Mobile Advertising Group and Rene Bellack (Vodafone) as head of the mobile group within the BVDW showed the international and German efforts to develop standards in the market to ensure easier development of mobile adverts and mobile content.

Last but not least due to the small user base there is also still limited willingness on the part of companies to dedicate major marketing budget to the mobile market. While some companies are running test trials and are willing to experiment in the market despite the rather small installed base others are still hesitating. Many companies have only now really accepted the online ad market and are not quite ready yet for the next step.

Great campaigns are running nevertheless
Despite the small market size, several companies and agencies are brave enough to develop, testmarket and run exciting campaigns nevertheless. Several marketing and advertising service provider companies specialized in the mobile area such as the YOC Group , Mindshare, LUUPAY, Minick, BAM as well as key German content providers like Axel Springer, Sport1 etc. are starting to experiment and are showing that the right campaign can bring great results.

Just like in the internet world several years back, the first advertisement steps into the mobile world are banner ads. But other examples that were shown were crossmedia campaigns such as Jacobs (Coffee brand) campaign where the user was asked via a printed ad or a billboard to send an SMS to Jacobs to receive a free sample of a new instant coffee, or Aral, where you can get routing instructions sent to your phone. Companies such as Arvato and MicroMovie are also experimenting with video and IP-TV.

The general conclusion among all presenters was that an ad has to be relevant to the user and give him some form of added value.

Next year
The conference clearly gave a good overview of the Mobile Market in Germany. Next year’s event will be held 22 and 23 January, in the newly opened “BMW Welt” in Munich, a bigger venue with more space for exhibitors.

See the Mobile Advertise Convention website here.