MobiAD Archives

Operator Profile: Vodafone (part 1)

Interview with Richard Saggers
Head of Mobile Advertising

saggersv5.gifRichard Saggers has the interesting position of New Business – Head of Mobile Advertising for Vodafone Group Services. As such, he has a unique vantage point to share with us some of the experience and strategies around mobile advertising for one of the world’s largest mobile operators.
(note: this is Part One of this interview, Part Two will be in the next MobiAD News newsletter)

Hi Richard. You work at what’s called the “group level” at Vodafone. Can you give us a brief idea of the role of the group level?
Sure. In broad terms, our primary role is to look across all the Vodafone operating companies, overseeing the development and execution of strategies around mobile advertising. Secondly, we work with our partner and affiliate companies (the mobile operators where Vodafone has a minority ownership) to help them leverage the benefits of being in the Vodafone family, and to bring their experiences back into Vodafone. And finally, we take care of certain activities that are best handled at a corporate level such as work on standards and best practices.

I guess the first question to you quite simple: Does Vodafone believe that mobile advertising is an important area to focus on?
saggers_text1.gifAbsolutely. Based on our experiences and trials over the past 18 months, we definitely believe there is a significant opportunity for Vodafone in mobile advertising.

There are 4 key points why we think this is important.

• First, we have lots of subscriber data that can be used for targeting advertisements. And better ad targeting leads to better ROI for advertising campaigns.
• Secondly, the interactive nature of mobile makes it the best channel for forming customer engagement with brands and creating a customer response path.
• Third is the ubiquity of mobile devices. You can reach certain customer segments where traditional media is becoming less effective. For example, the traditional media consumption of the 18 to 24 year old “out of home” segment is in decline. This is a strong opportunity for mobile.
• Finally, the mobile can act as a “point of integration” for other media. For example, as a response path for a billboard or TV campaign, or to extend the life of an ad on the internet. It’s about providing the “glue”.

saggers-image2.gifThen maybe you could explain to me what is Vodafone’s overall strategy for mobile advertising?
The first thing we’ve learned in mobile advertising is that “one size doesn’t fit all”. We realize that there are market-by-market differences that must be taken into account – for example penetration of mobile internet or maturity of the online advertising market.

That being said, there are 3 main points we need to address in each market.

1. what is the most appropriate way to sell inventory
2. what are the most appropriate elements of inventory
3. what is the technology that sits behind this

If strategies are market by market, can you give an example?
OK, lets look at the sales piece. Here in the UK the online advertising market is very mature and advanced, so we believe that the mobile advertising sales channel should be linked to this. We have partnered with a global internet leader – Yahoo – to sell the UK inventory. They also take care of the ad serving technology.

By contrast, in Italy and Germany we have partnered with local companies to sell ad inventory. In Italy it is Dada Media and in Germany it is Gruner & Jahr. In each case a local partner is also doing the ad serving.

What about ad inventory – have you come to any conclusions about what is the optimum ad format for mobile?
Our experience is that we are still in an early stage, and it is premature to try to say which is the best. But we can say that the traditional sms/shortcode response path is a very powerful medium – very easy to use, very user-friendly – and undoubtedly it will continue. It’s the stuff that’s richer in terms of your ability to get across a brand message or product message that’s still being explored.

You mentioned that Vodafone has run a number of trials. Can you give us an example of one you found compelling?
saggers-chart.gifWe ran a mobile game trial where we offered the same game at a standard price of £3, a subsidized price of £1, and also for free. We segmented by handset type, so a single subscriber would only get one of the offers. It was a Sudoku type game, with ads between the levels.

We found a 6-fold increase in downloads when comparing full price to the subsidized price, and a 60-fold increase when going from full price to the free offer. And we had a sustained click through rate of about 5%.

I think this demonstrates that ad-funding really has the potential to unlock mobile content.

Let’s go back to the Yahoo agreement you mentioned. Vodafone also has an agreement with Google. Can you clarify for us how these fit together?
Actually they are very separate agreements. Let’s start with the Yahoo deal.

yahoo.pngThe Yahoo agreement is for the UK only. It includes selling ad inventory on Vodafone Live!, as well as the serving of ads. The service will go live in the summer of 2007, initially with display banners and text ads, then later extending to games and video.

What were the key reasons Vodafone choose to work with Yahoo when there are several ad network/ad serving companies?
We decided to partner with Yahoo for several reasons. They have a lot of experience in yield management, yield optimization, and ad targeting. Plus they are very well established in the UK online advertising industry, which we thought was important.

OK, can you tell us a bit about the Google agreement?
google.gifGoogle is Vodafone’s global partner for mobile search advertising. If you want to buy ad words in any market, you can go to Google. This is how we will manage the longtail of advertising.

We chose to work with Google because they are well branded and very well recognized by consumers – consumers will probably want to go there anyway for search. And they are very good at handling this type of advertising.

This is the end of Part One of this interview. In Part Two which can be found HERE, Richard talks about Vodafone’s plans for using data for targeting, capabilities like “storyboarding”, and his personal view of what will drive growth in the mobile advertising market.


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