There is an argument that says that cellular operators will trust existing equipment suppliers when it comes to new revenue streams ‘ so although Alcatel knows very little about advertising, it’s (theoretically) shown itself to be on the side of the mobile operator on multiple occasions, and naturally has a sales force that thinks ‘operator’ thoughts.
On the back of that Alcatel has launched an ambitious advertising eco-system called Optism (Opt in or Optimism – you choose), theoretically not limited to Europe, but clearly being pioneered here with its first customer Orange Austria and advertising agency Mediacom, part of the WPP group.
Advertising has won a foothold on the mobile mostly through third parties bypassing the operator and offering services over the top. Google gives away a search button and takes the search advertising, Apple gives away Apps and takes application based advertising ‘ and other local content aggregators do much the same. Alcatel is pitching this service as way to strike back and make the most of advertising inventory on handsets which is raised in value by dint of being both relevant to consumer profiles (only the operator has demographic data about each handset user) and based on an opt in.
Alcatel is saying that it adheres to the freshly established guidelines of the Mobile Marketing Association which it has helped to pioneer, and that a multi country study taking in 2,223 young people have told it that the way to get attention to advertising is to get a voluntary user sign up and allow the cellular user control over the process, and a chance to guide the process with their preferences. So Alcatel has created something it calls a Dialogue Service where adverts are delivered via SMS and MMS messages and encourage recipients to engage in dialogues with their favorite brands.
We’re not quite sure how you engage in this dialogue if you are not a young person’s favorite brand or if you are a new brand, and presumably the advertising is only delivered via SMS, it’s not only shown on direct messages ‘ but it must be down to each individual operator to define where advertising is allowed to display, and then kick into an SMS dialogue.
Either way it sounds basic, when most advertising will be either search based, web based or on video delivered by a third party and invisible to the operator.
Advertising on a mobile is likely, for the most part, to be effective in html pages or in video (pre-roll, post roll and interruptive) or as product placement with ‘touch to buy’ options, or expandable, from the edges of image screens or as overlays over video or images or web pages. The trouble with these as a source of revenue is that they will belong as often to content owners, and many of these will be over the top (OTT) content owners, with no relationship with the cellcos.
But if Alcatel does have a limited view of what the inventory might be, it has a clear view of the entire eco-system, and Optism comes with an auction application that brokers deals between advertisers and multiple operators.
The way it appears to work is that the cellular operators pays nothing for the service, and then tools provided by Alcatel allow advertisers to pick demographics and opt in cellular customers to show adverts to, not at one operator but across multiple operators in multiple territories. The idea is that if the advertiser only wants a highly specific type of viewer, they might need to reach across multiple audiences to find enough of them. This way the operator can support a huge number of concurrent campaigns, each one based on a different opt in feature. The cellco can control things like how many messages each customer gets and keeps underlying demographic within its own IT domain.
‘The most desirable inventory involves user permissions supplemented by explicit preferences and must offer broad scale to truly harness mobile as a marketing channel,’ said David Kyffin, Global Chief ROI and Direct Marketing Officer of Mediacom. ‘Clients are increasingly asking if they can run campaigns over multiple regions and at scale. Alcatel-Lucent’s operating model and access to multiple mobile operators is a big step towards meeting these requirements.’
Also because Alcatel is hosting the advertising delivery and running the service, there are no costs to a cellco, and it shares its revenue with Alcatel in order to pay for the service.
Just a week ago Orange signed an advertising server deal with OpenX, to build a European wide interactive advertising auction, but although this is likely to want to take in mobile advertising at some stage, at present it relates to web pages and links from television channels so far. Chances are these two moves are related, at least as far as Orange is concerned.
A year ago Nokia halved the workforce of its own nascent mobile advertising effort, perhaps deciding that the market was not quite ready for an operator based mobile advertising platform, especially coming off the latest recession. Now Nokia and the biggest cellular network provider, Ericsson, as well as China’s Huawei are all likely to take another look at this segment to ensure that operators get a look in against Google and co, and so that Alcatel does not steal a march. (See separate article on Google and Admob elsewhere in this issue). Nokia’s efforts however are all based around placing advertising on mobile web pages including Nokia’s own Ovi internet services and has so far attracted Sprint and India’s Bharti Airtel.