Mobile ad server dishes up new business model

Kate Gerwig
03 Jul 2009
00:00

Changing digital media business model includes mobile operators

According to HeavyReading projections, mobile advertising revenue worldwide will increase from $1.4 billion in 2007 to more than $10 billion by 2013. To make the new mobile advertising model work, however, traditional advertising media buyers will have to get used to dealing with wireless operators, and vice versa. Advertising media buyers aren't used to doing business with wireless carriers, but the nascent mobile phone advertising market has enormous possibilities, according to Broos. "People carry their phones 24 hours a day and use them for all sorts of multimedia activities," he said. "It's every marketer's dream to use that platform."

The way Alcatel-Lucent sees it, the mobile advertising value chain will have to change, and media buyers will need to include mobile operators in the list of media sellers that include newspapers, magazines, radio, television and Internet advertising. "Mobile operators have a role to play. But they need a technical solution and the expertise to know how to sell the assets they have in the language media buyers understand," Broos said.

Instead of trying to learn the advertising business, E-Plus is working with a German sales agency that will sell on the carrier's behalf.

Wireless subscribers exchange information for targeted ads

Mobile carriers don't want to ruin the ad-revenue possibilities by spamming their customers with unwanted and irrelevant ads, however. To guard against that, the targeted advertising service is opt-in only. Customers can provide various amounts of personal information. In return, they will receive a certain number of targeted ads per month on their mobile phones, as well as "rewards" for doing so -- most likely credits on their monthly wireless bill.

Making the system work is complex, Broos said, and there needs to be soft integration with mobile operators' OSS/BSS to make sure customers get their expected rewards.

Demographically, Broos expects targeted mobile advertising to take off with younger customers who pay their own mobile bills and have less disposable income than older mobile customers. Geographically, Alcatel-Lucent believes the first uptake may be in Europe, northern Africa, and Asia-Pacific countries.

This article originally appeared on SearchTelecom.com

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