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The Operator’s Role In Mobile Advertising: Is There One?

comverse_guy.jpgGuy Yaniv – VP and General Manager
Messaging and Mobile Advertising, Comverse

As the mobile advertising industry has developed, the proper role for mobile operators has been a great topic of discussion.

In this article, Guy Yaniv from Comverse discusses the reasons he believes the mobile operators must get more involved in mobile advertising, and suggests several ways that they can more actively participate.


The mobile phone has become an essential part of our daily lives. We depend on it for everything from texting the kids about dinner to searching for the nearest cinema showing the latest films. Combined with the equally important role of branding in today’s increasingly competitive markets – mobile advertising becomes a must.

comverse_quote1.gifWhile mobile advertising has been touted for a couple of years now, it’s been slow to take off. This is partly down to operators and brands not being fully persuaded by its capabilities, despite agreeing on its potential. One of the key reasons is the difficulties they’ve faced in integrating the operator’s subscriber knowledge with the creativity of brands – bridging the gap between two traditionally very different worlds. Yet the potential benefits are too great for either to ignore.

So here are some of the key reasons why operators must embrace mobile advertising or risk losing out:

Retaining the customer
Consumers’ expectations are high due to the proliferation of the mobile as a ‘must have’ device. It makes sense for the operator to be the one to connect the two most important things in a consumer’s life – brands and the mobile, and use it as a customer retention tool. Additionally, as seen in several places around the world, operators can be bypassed by mobile campaigns running WAP mini-sites. This results in advertising that isn’t as tailored or relevant as it could be, the consumer becoming dissatisfied and looking to change service provider which means everyone losing out.

Enhancing user experience
Advertisers rely on and benefit from the operator’s trusted service and billing relationship with the user for a successful campaign. The operator has in-depth subscriber knowledge which they use to deliver better personalised and more relevant ads. This gives them the edge over campaigns that bypass the operator. So, operator involvement not only results in a single advertising stream but can also provide a better and more personalised customer experience. As a result operators typically deal with customer experience design for many of their mobile services and have extensive mobile specific expertise.

Reducing ARPU loss
It’s a well-documented fact that key operator revenue streams such as voice and text are declining, hit harder by the regulatory fees and unsurprising reluctance of users to pay for content. Mobile advertising presents a great opportunity for operators to monetise their packages, especially during a downturn. They incentivise subscribers to continue using data and value added services with discounted offers if they agree to receive advertising on their mobile, while still maintaining their revenues by collaborating with the brands.

The key reasons outlined above demonstrate the need for operators to take the leap and join the advertising bandwagon. By doing so they’d not only increase revenue streams but also safeguard their customer base through positive experience, loyalty and retention.

Here are some specific ways for operators to get involved and make mobile advertising happen, as well as what they stand to gain from it.

  • As mentioned, mobile advertising can be used to protect an operator’s business from income loss. They can vary the packages to offer lower priced services, incorporating targeted and personalised advertisements on the one hand and offering standard rate contracts for those who prefer to opt out on the other. This takes advantage of the fact that those consumers, while not opting in, will pay a higher price than they would have paid, if there was no alternative available. In cases like this, advertising streams not only generate but also protect operator revenues.
  • comverse_quote2.gifCompetitive advantage is something operators are constantly seeking to create and maintain, while looking for ways to remain at ‘the top of their game’. This is another area where the benefits of advertising can come into play. If the advertising service is appealing to the users, it can reduce churn and increase customer loyalty as customers view the operator as a supplier of valuable information. Relevant ads become information rather than intrusive ads.
  • Operators have a multitude of mobile data services available to offer their customers (text/ picture messaging, LBS, mobile internet, mobile banking and payments, ticketing etc). With people spending increasing amounts of time on their mobile, it can be used to bridge the transition from traditional media advertising, such as on television and in newspapers, to more digital-based advertising – which will really drive cross-platform and cross-media campaigns.

comverse_quote3.gifFrom an operator point of view the mobile advertising market is still nascent with lots of uncertainties. Despite showing some obvious benefits and opportunities in terms of revenue gain and customer satisfaction, it seems operators are still wary of taking the plunge. Yet for advertisers, consumers and the mobile industry as a whole, it’s in the interest of all parties that operators play a key role in bringing mobile advertising to the forefront of the market.

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04.09.2009   
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