Mobile advertising, but to whom?
By Adrian Kelly, Head of Customer Intelligence Management, LogicaCMG/Acision

The much talked about ad-funded virtual mobile operator, Blyk, launched this month on <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Orange’s network in the UK. It is promising to offer UK consumers free or reduced mobile tariffs in exchange for consent for targeted advertising.

Understandably, everyone is getting quite excited at the prospect of this first full market trial of mobile advertising.  However Blyk has two major challenges to overcome, and its success or failure will reflect on advertising funded business strategies as a whole. 

The first challenge is a classic chicken and egg situation. Blyk needs to attract consumers to a free service, but at the same time needs to get advertisers onboard in order to pay for it. But which comes first? Who will fund the consumers until the advertisers start paying and how will Blyk convince brands to spend money until there is an established and sizable audience?

Secondly and more fundamental, as a virtual operator – hiring space on Orange’s network – Blyk is likely to be getting access to only a fraction of the real-time behavioural information that an operator can pull from its systems using powerful customer intelligence. In fact, not even Orange are exploiting the full potential of the available information yet. Consequently, Blyk will have to rely on more traditional CRM and historical activity-based marketing segmentation.

Mobile advertising presents an appealing and unique opportunity for brands to reach potential customers.  The status that the mobile phone has achieved as the ever-present, trusted and most importantly most personal device means that you can’t get much closer to a consumer than appearing on the little screen of their phone.  Additionally, operators can offer something very unique in addition to just the ability to deliver general advertising messages, because by unlocking the true potential of the ‘live’ behavioural information available within their systems, this will uncover more valuable and timely information on consumer habits and behaviours than even the much-heralded Google.

Using the latest generation of Customer Intelligence Management tools operators can know when someone sends an MMS, what type of multimedia it was, who it went to, what application-to-person services are used (horoscopes, TV show information), and what TV shows they interact with through voting and content applications.  With mobile internet becoming an increasingly real phenomena they also have access to much more web browsing information than a search engine can record – wherever the consumer goes online on the mobile, the operator can know about it using web analytics.

This information is an advertisers dream, offering opportunities for precise targeting more akin to those from the media world, where over 100 different customer segments are typical, than the 10 or so demographic based segments that have been the norm in the mobile world up until now.

Launching a serious mobile advertising offering without attempting to take segmentation to this next level, making use of all the information available seems like a waste. 

Blyk is clearly pushing mobile advertising more comprehensively than ever before and all eyes will be eagerly watching. But without the ability to offer intelligent real-time behaviour based segmentation the jury is out on whether Blyk will be able to break out of the standard approach of database marketing and really offer advertisers the full targeting potential of the mobile channel.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />