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Consumer Segmentation Drives
Orange’s Mobile Advertising Strategy

orange-segments.gifInterview with Xavier Perret
VP Advertising Solutions, Orange

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.

mobile_gagnant.gifAbout 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:

1- Integration with the product portfolio
(i.e. different advertising offers for different market segments.)

2 – Consumer Interactivity

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.”

orange-reebock-ad.jpg

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.

orangeshots_monkey.gif“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.

orange_xavier_quote1.gifXavier 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.

The initial concern was that subscribers might not easily accept this program, but in fact consumers liked it very much. Xavier believes a lot of it was because they already trusted the store, and they already trusted Orange, so they felt the service could be trusted. “The trend is there, and they accepted it because they trusted us and they trusted the brand.”

Summary: The Orange Approach

While many operators seem to focus primarily on implementing new technologies, coverage, or business models, with Orange almost any question is immediately evaluated according to impact on customer offers in the various customer segments. And as new issues arise – such as consumer privacy – this same approach has meant that Orange has developed a much broader view of what is meant by “consumer bundle”.

orange_oliver.jpgXavier summed up this broader view and Orange’s approach: “The consumer bundle is now handset, messages, advertising, and control of privacy information.”

“In the end, the operator’s job is to segment the market, and then make the right product bundles for the right segments – I’m really convinced about this.”


19.05.2010    Tags: , , ,
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