Mobile advertising is going to be increasingly high-profile in the next few years. And I don’t mean Crazy Frog or those baffling Phones 4 U TV commercials. Advertising on your mobile has so far been largely restricted to annoying spam text messages – the sort that often arrive at 3am. But that’s going to change, with mobile operators and content companies keen to make extra revenue, and big brands eager to find a way of reaching the young consumes who’ve been deserting print and TV in their droves.
One company that’s already doing rather well from mobile advertising – without a spam SMS in sight – is AdMob. The company places simple text adverts on WAP sites, and is picking up some big clients. The company recently appointed Russell Buckley to be its managing director in Europe.
Buckley is something of a mobile advertising expert, being one half of the team behind the respected MobHappy blog, which covers all aspects of mobile technology. I talked to him about the new job, and how he sees mobile advertising developing.
“I’ve been involved in mobile marketing for the last six years, but now’s an exciting time,” says Buckley. “It’s the first time we’ve seen something that really works. When we run an ad, people are clicking on it, with a response rate of up to seven or eight percent sometimes, and we’re driving sales directly off it.”
AdMob basically hooks up companies who want to advertise on mobile phones, with publishers of mobile Internet sites, and then arranges to place text-only adverts, with links, on the latter’s sites. The company has over 150 advertisers, and its network of publishers serves more than 300 million mobile page views a month, including sites from small WAP startups through to huge global brands like MTV.
“It’s great for targeting,” says Buckley. “For a start, the people who see these ads are already using WAP, so it’s not like people seeing an advert in The Sun saying ‘go to this WAP site’, but they haven’t got the right settings. And we can also target the ads by country, by operator, and by handset make and platform. So if you want to advertise to, say, all people with Symbian Nokia phones in the UK, we can do that.”
Isn’t WAP old hat, though? It was hyped as being whizzier than it actually was, and then everyone lost interest. Buckley agrees, but crucially says this was just the short-term reaction. He cites a theory coined by analyst firm Gartner, called the Hype Cycle, which described what happens when a technology is launched, overhyped, becomes unfashionable, and then gradually becomes popular again as people actually start using it.
That’s a simplification, mind – the actual theory uses high-falutin’ analyst terms like ‘Trough of Disillusionment’, ‘Slope of Enlightenment’ and ‘Plateau of Productivity’. Whatever you call it, it happened to WAP, which is now edging towards that plateau.
“It’s probably where we were with SMS in 1999,” says Buckley. “It’s under the radar, but an awful lot of people, and particularly kids, are using it.”
He also compares the current mobile internet to the early days of the Web, when people were looking for new sites to visit. Many of AdMob’s advertisers are themselves WAP publishers, so trying to attract people by advertising elsewhere. Handset manufacturers and mobile content firms are also advertising – Nokia is one of AdMob’s clients – but interestingly, Buckley says the most popular WAP sites right now aren’t always those run by the biggest brands.
“Some of the bigger names on our network haven’t got all that much traffic in comparison to these new upstarts,” he says. “It’s like when the Internet came along, and traditional publishers were very slow to catch on, so allowed big brands like Yahoo and Google to develop. It will be interesting to see if that pattern’s repeated on mobile. The upstart brands are already pulling in huge traffic, probably bigger than the Yahoos from the internet world. These companies could be the Googles and Yahoos of tomorrow.”
Most of AdMob’s traffic comes from Europe, which Buckley says has been quicker on the uptake for WAP than elsewhere. However, it’s not just about the UK by any means. AdMob’s five top markets are South Africa, India, the UK, the US and Israel, with South Africa by some way the biggest. Buckley thinks European mobile operators can learn from it, as data traffic is cheap there, which has spurred many more people to use their phones for browsing.
“If you make data a fixed-price and cheap, growth explodes,” he says. “It helps in some of these countries, like India, that the penetration of PCs isn’t as high, so people use their phones. And of course, people speak English there, and most of the big global WAP sites right now are in English.”
Right now, few people would complain about text adverts on a WAP page. But how will mobile advertising develop? Several companies are already looking at the next step, for example more graphically rich banner ads. Buckley says AdMob could do this now, but is waiting, as most mobile users aren’t on fixed-data plans. In other words, they pay for every kilobyte of data they use, which isn’t a problem for a couple of lines of text, but could be an issue once adverts become banners.
“The last thing we want in this marketplace is for someone to start pumping rich media down peoples’ phones in advertising form, and pumping up their phone bills as a result,” he says. “For now, we know that text links work, people are happy to click on them, and they get high responses. Why try to run marketing campaigns that are the equivalent of slapping them in the face with a wet fish? We shouldn’t be looking at the aggressive advertising techniques which became prevalent in the initial bubble of the internet.”
One way mobile advertising is developing fast is in the area of search, with mobile operators scrambling to sign deals with the likes of Google and Yahoo to incorporate web-like search on their phones. AdMob is working with Google on a contextual search service, so that its advertisers can include their ads for people searching for certain keywords through Google. But Buckley seems unconvinced in general.
“My personal view is that search seems to be seen by everybody as being as important on the mobile as it is on the Web,” he says. “I don’t actually think it will be. It’s still important and relevant, but not quite in the same way as the Web. You can’t just cram Web-based ideas onto mobile. It works sometimes, but more often needs radical rethinking, not just tweaking. You have to approach mobile with a blank sheet of paper.”
Having seen Nokia make a splash this week with its new N95 handset – the first mainstream phone to feature fully-fledged GPS integrated into the phone – does this offer opportunities for advertising? Location-based advertising has been an industry buzzword for a while now, without any clear signs of people making money from it.
Buckley thinks location is a huge opportunity on mobile, but thinks it’s in the middle of that cycle of disillusionment referred to earlier, particularly in the minds of the mobile operators.
“A lot of them have written it off, because all their trials have been engineering-led rather than usability-led,” he says. “If the application is ‘where’s my nearest cash machine?’, of course it won’t work. You can do that by walking 100 yards in any direction in a built-up area. ‘Find my nearest garage?’ Who cares?!”
Instead, Buckley’s more excited about some of the newer location-based mobile applications which blend elements of social networking. He cites Loopt, a company for whom he has consulted, as a good example, which enables you to see your friends’ physical locations on a map, and send them messages. He says that for kids in particular, it may even be a reason to change their operator, to ensure they’re not left out if a group of friends adopts it.
“Can that be overlaid by some form of advertising? Yes, but the complexities of doing it are a bit mind-boggling,” he says. “That doesn’t mean it can’t be done, but for a startup it’s challenging. Say you’re standing outside Charing Cross station. You might receive an advert for a nearby Internet cafe, but it’s difficult to scale. If you walk 300 yards down the road, you might not get any adverts.”
The thing that everybody forgets about location-based services, thinks Buckley, is time. That internet cafe may want to serve an advert up to you at 10am, when it’s quiet, but they probably wouldn’t want to in peak times like lunchtime.
“It adds complexity, as a lot of advertisers won’t want to advertise 100% of the time,” he says. “The time element is something people always forget. But I’m not saying it’s impossible to work these issues out.