Opportunity. Patrick McCabe Senior Director Americas Advertising Alcatel-Lucent
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1 The Mobile Advertising Opportunity Personalization, Interaction, and Permission Patrick McCabe Senior Director Americas Advertising Alcatel-Lucent
2 Contents The overall market growth and potential of mobile advertising The players in the advertising ecosystem The challenges with traditional mobile advertising The right approach: Personalization, Interactivity, and Permission 2 The Mobile Advertising Opportunity Oct 2009
3 U.S. digital ad spending will double in 5 years and mobile advertising is expected to exhibit strong growth We will increase budget for interactive by shifting money away from traditional marketing. (Forrester survey of U.S. Marketers) 3 The Mobile Advertising Opportunity Oct 2009
4 The Media Chain How do MNOs participate? The Brand approves all marketing spend and activity The Creative Agency is responsible for designing i the campaign while the Media Agency selects the right media and books inventory A Sales team, internal or external, sells the media on behalf of the media owner The Media Owner is responsible for the distribution of the media The End User consumes the messages from the brand 4 The Mobile Advertising Opportunity Oct 2009
5 Today, over $500B in global advertising is spread amongst various media owners 5 The Mobile Advertising Opportunity Oct 2009
6 1. Sports 2. Humor 3. Cinama 4. News 5. Top models You want to laugh about the pseudo new stars and, Service Providers ARE media owners, too. IM BestTV Mobile TV SMS/MMS 6 The Mobile Advertising Opportunity Oct 2009
7 But there are challenges for the Media Owner (Service Provider) Relevance in the value chain Competing with application and content providers that are moving fast to own all media relationships with consumers Selling inventory takes time, the right skills and money Reach Attracting advertisers with a small subscriber base Inventory may need to be aggregated, cross- MNOs for greatest reach and value Interactivity WAP and Mobile Web Banners provide similar low levels of engagement as PC Web Delivering a compelling customer experience 7 The Mobile Advertising Opportunity Oct 2009
8 1. Sports 2. Humor 3. Cinama 4. News 5. Top models You want to laugh about the pseudo new stars Challenges for the Advertiser/Agency Including reaching the right audience on the right screen with the right format Fragmentation of media consumption Numerous formats within a single screen x SMS/MMS BestTV IM Mobile TV With Internet and mobile media growing faster than we can consume it, the only way to capture really big audiences in the future will be to aggregate them across TV, Internet and mobile Internet screens Advertising forecast: Getting the Consumer s Attention, Yankee Group, June 2009 Difficult for brands to engage with end users across screens and service providers Moving from reach and frequency to reach and relevancy 8 The Mobile Advertising Opportunity Oct 2009
9 Not all types of mobile advertising provide MNOs the best return on investment Search Sponsored Content Display Classifieds Messaging Principals of online advertising do not translate well into mobile advertising 9 The Mobile Advertising Opportunity Oct 2009
10 Inventory performance varies by media Tailoring to the individual interests increases the value Media Permission Preference CPM Response Rate Web Banners No Inferred $ % National Press No Inferred $ % Door to Door No Inferred $ % Partial Inferred $ % Direct Mail Yes Known $ % Source: GroupM (WPP) 2009 Winning formula: explicit permission + known preferences = highest revenue potential 10 The Mobile Advertising Opportunity Oct 2009
11 The consumer is at the center of the advertising experience Understanding the consumer needs will dictate success or failure Relevance Privacy Consumers don t mind advertising if it is perceived as relevant and part of their regularly consumed content Response is better when there s a relationship between the content and the advertising Response is also better when there s a relationship between the content and the device Source: Alcatel-Lucent Market Advantage Research (April 2009, May 2008) p Consumers must be given notice of data collection and agree to it Consumers require control over the information captured, measured and used Rewards Trade-off between advertising and rewards leading to better acceptance mobile screen for example 11 The Mobile Advertising Opportunity Oct 2009
12 Making advertising relevant is key Findings from Alcatel-Lucent Market Advantage Research Consumer Willingness to Share Personal Information (Ages 13 26) All Lab members 74% Shared info before Haven t shared info before 70% 82% 0% 20% 40% 60% 80% 100% % Who Would Share and Update Relevant advertising is consumed like content and studies indicate that Millennial consumers are more than willing to opt-in 12 The Mobile Advertising Opportunity Oct 2009
13 MNOs can add value using Messaging as an interactive mobile advertising medium Opportunities for consumers to engage in a personal conversation with brands 13 The Mobile Advertising Opportunity Oct 2009
14 Opportunities for the Mobile Carrier, the Advertiser, and the Consumer Opportunity for the Mobile Carrier Monitize existing infrastructure with limited risk - Increase ARPU, Understand d your customers needs and reduce churn, Create new service offerings for specific subscriber segments Opportunity for the Advertiser Create awareness, interaction, and ultimately sales within the most common and personal media device, Connect with profiled high-value h subscribers who have opted-in to the program Ability to directly measure success of campaigns and fine tune campaign strategy Opportunity for the Subscriber Engagement with the brands they love and consume Access to exclusive offers, content vouchers, personalized news The ability to dynamically control the experience by tuning preferences in real-time. 14 The Mobile Advertising Opportunity Oct 2009
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