Customer Information is Power in the New Mobile Advertising Arena

In order to profitably apply the new business models that are emerging to support mobile advertising, mobile operators must make intelligent use of their detailed customer information, according to Analysys. Customer information is the key to mobile operators gaining a significant share of advertising revenues.

"If this information is used intelligently," explains Consultant Andrew Kloeden, "mobile operators have an opportunity to gain significant new revenues from mobile advertisers, who may be willing to pay a premium for access to a well-segmented audience."

A number of potential new mobile advertising business models are emerging, including:

• mobile portal and content offerings from advertising-funded Internet players, such as Google and Yahoo!, which bypass the networks of the mobile operators
• advertising-funded mobile TV services offered by mobile operators over either 3G networks or specially-built mobile TV networks
• advertising-funded downloads of games and other small packages of content.

"Mobile operators have the potential to use customer information to gain revenues from mobile advertising beyond simple data carriage. Provided a business model that does not bypass the operators' networks emerges as dominant, mobile advertising may represent a source of significant ARPU gains from mobile data services."

In order to maximise the value they can extract from mobile advertising, mobile operators must overcome a number of challenges, principally by:

• ensuring that they have the marketing, database management and data-mining capabilities necessary to ensure high-impact, targeted advertising that represents high value for advertisers
• pushing the development of business models that do not bypass their networks to counteract worrying developments for operators such as Yahoo!'s direct deals with handset manufacturers such as Nokia, Motorola and RIM.
• overcoming data protection and privacy concerns. In most countries, operators must ask permission to use customer information for advertising purposes. This may be overcome by offering content that is compelling enough for subscribers to opt in, thus allowing the use of their information.

"If mobile operators can successfully influence the business models that eventually dominate the market and exploit their marketing, data mining and content aggregation capabilities, mobile advertising may represent an opportunity to extract significant new revenues from mobile data services," concludes Kloeden."

Posted to the site on 16th February 2007