New Marketing - Trends and Insights

Tuesday, May 29, 2007

(Mobile) Operators - commodities in the development?

What about if someone would pay for your phone bills? And I don't mean your employer.
I mean you would use your phone for free, and the advertisers would take care of the bill.
The "only" thing you would need to do is accept to hear their rant before calling, or read (not only receive) their SMS/MMS.

Actually, it is the opposite of what is happening with TV. People pay a premium to access an ad-free channel--the problem being when you pay for the access and THEN you get ads on top... how do people stand it, it's beyond me!

Sounds interesting, now doesn't it? Someone could build its business model on this premise. How much of a revolutionary concept is this? Virgin Mobiles did it last year, IIRC. Their target group was "young people"--at least in the beginning. The main task here is actually maintaining the people in the network. Here's the trick:
Opportunity 1: Young people are the ones more prone to accept ads on their phones in exchange for free calls.
Opportunity 1: Young people are the most prone to use 3G services, bringing more value to the operator.
Challenge 1: Young people are the most cynical against ads.
Challenge 2: Young people are the most prone to churn.

Enters the scene social network analytics, to tackle this issue. The main goal is to find the best way to deliver the right ad message to the people to whom it will resonate best at the best time.
In this way, the probability that the ad is effective (i.e., that it produces an effect on the receiver--namely BUYING) is much higher; also, the customer receiving only ads that are interesting to his lifestyle/preferences will most likely choose to stay in the network--and get others to join.
The most innovative feature of these solutions is that it provides the operator and the advertisers with a common platform, where the targets' desired characteristics can be adjusted, as to find the right segments to whom launch the ad, thus increasing the effectiveness of a specific ad. In a way, like the slots in an airport.
It is up to the operator to select the which are the most expensive "slots".

Of course, when (not if) the advertising-funded calls concept succeeds, all operators will do the same!!
Why bother with all this? Basically because the future of mobile marketing in terms of value resides in advertising, so if operators want a piece of the future pie, they will have to control a piece of the value chain:
Operators will be the toll on the motorway where the mobile marketing traffic flows.

... or else they will be providing a commodity--traffic flow support.

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