2nd. Mobile Multimedia Advertising and Marketing Forum, MarcusEvans, London, UK, v. 02b/2008-11-

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Understanding How an Operator Tries to

Position Itself in the Advertising MarketNikolay Chakrakchiev, Business Development, MobilTel EAD, Bulgaria

1

The MNO’s Start Position

The ideas perceived as given facts (1/2):

The present telcos are:

• Dealing with “commodity”-type services.

• “Immune” to change and recession not more than dinosaurs have been.

• Afraid of turning into “dumb pipes” for every other IP service provider.

… with shrinking revenues, if not extensively expanding.

2

The MNO’s Start Position

The ideas we may perceive as given facts (2/2):

The Pillars, the MNOs can build their future onto, are:

• Identity management of large numbers of customers.

• Dealing with milliards of processes and transactions, esp. billing.

• Present availability of large volumes of customer behavior data.

… so, why not enter, … er, … the advertising market?

3

Identifying the Demands Faced by Operators

… enter what?

Market, in which:

• There is big money – revenues 1:5 global advertising vs. global telecoms?

• 1% response rate is considered SUCCESS?

• Measurement and Reporting (media metrics) are “matter of statistical mind

games”?

4

THERE ISN’T ANY?

THE FUTURE OF ADVERTISING

5

Identifying the Demands Faced by Operators

“We’re not in the business of keeping the media

companies alive.

We’re in the business of connecting with consumers.”

Trevor Edwards

Vice President, Global Brand & Category Management

Nike

October 2007

6

Identifying the Demands Faced by Operators

So… What's the Problem?

Winning the attention of the customers

is harder and more expensive.

7

The Advertising is in Major Shift

The users migrate to new screens for content and information...

Users are also enjoying and exploiting new control tools.

As consumers have more choices, they have to be reached where they want,

when they want and how they want.

... Advertising [is] funding a significant portion of entertainment around the

world (e.g. sponsoring is estimated 50 percent of television in major markets).

… the medium, content and advertising spending must synch up.

“The End Of Advertising as We Know It”

By Saul J. Berman, Bill Battino, Louisa Shipnuck and Andreas Neus

IBM Global Business Services

November 2007

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Emerging demands

for content and advertising

9

Mobile

=

Personal

Reach

10

We talk about…

We talk about “MOBILE”:

And “Mobile” is the HANDSET, the device:

• an personal, intimate item.

• a connected, interactive one.

• a standardized piece of technology.

• increasingly capable, esp. as multimedia.

11

We talk about…

We talk about “MOBILE”:

And “Mobile” is the MSISDN, the identifier:

• to address the particular addressee.

• to make the message personal.

• to collect and organize personal data.

12

Sponsored

services

-

a way to

where?

13

Sponsored services – a way to where? 1/2

Sponsored (ad-funded) services:

• if voice, messaging, data – considered not attractive from MNOs’ point-of-

view, as risk deterioration of core revenues.

• if digital content items – can be attractive, e.g. as way of clearing the

copyrights mess.

• if new, data based services – the optimal business model is the key.

14

Sponsored services – a way to where? 2/2

Sponsored core services – a serious venture, requiring a lot of guts:

• investment heavy and complex solutions needed.

• limited reach, compared to the total MNO’s customer base.

• mediocre value of the audience in advertising terms.

• difficult to price correctly.

15

The bread

and butter

of

Mobile

Advertising

16

OK, what is the MNOs’ trade?

Beside MNOs’ sponsored services, devices, portals,

MNOs have several other assets that advertisers value:

• a large customer base.

• an expectation for huge amount of available customer information

(preferences, real-time usage, demographics, etc.).

• billing and payment relationships and capabilities.

• provide a response channel for customers (including payments).

• in-store and call-centre customer service, incl. support customers’ post-

purchase.

17

To Shout or to Serve?

There's a choice, faced by a MNO:

• The Short Run – to behave as a conventional media and start the

ads barrage.

or

• The Quest – to become the personal media, the different and new

type of media.

N.B. The above choices are not mutually exclusive.

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Exploring the requirements

for the advertising solutions deployed by a MNO19

The road starts with the first step…

Some questions MNOs may ask in advance:

• What situation are we in?

• What vision do we have?

• What are the available resources?

• What is the timeline?

• Is there anyone ready to pay for it?

20

The Basic Points

Ad distribution is just one of the advertisers’ needs .

To maximize the advertising performance is the ultimate goal.

This means MNO’s have to provide data and tools for:

− planning

− targeting

− reporting

21

The Business Models

There is NO Universal

Business Model

• Bottom line: Covering the

network costs – by consumers

and/or by advertisers.

• Downstream – should be

transparent for the consumer,

e.g. flat rate.

• The Action or Upstream – to be

paid by advertisers and/or by

consumers.

• Advertisers pay premium

for the targeting.

22

Example – an Ad System’s Blocks

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Ad System Blocks 2 – Campaigns

Interfacing with channels for

ad serving/ distribution :

Campaign planning and management, incl.:

− targeting

− frequency capping

− weighting

− time framing

− advertising policies enforcement

− etc.

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Ad System Blocks 3 – Data

Interfacing with multiple platforms,

which process customer

information:

• Technical abilities of the communication

device and channel

• Profiling by:

− by customer preferences (incl. provisioning opt-in/out)

− billing data

− demographics

− etc.• Response Handling

• Ad Reporting/ Metrics

25

Other Requirements

If the advertising system is opened to third parties:

For audience contact points – e.g. 3rd. party portals or services:

– protection mechanisms are necessary for the sensitive

information.

For business users interfaces:

– roles management scheme – roles and available functions split.

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Accents:

• Not a single, comprehensive

solution, but a puzzle of blocks.

• MNOs have to try to keep the

strategic position as

personal data collectors and

processors.

• The Quantum of Communication

– the individual or the MSISDN?

27

Start with the solution the

market is ready to pay for.

Extend gradually

the enablers and

the offerings.

Keep the Precious

only for the MNO.28

What innovations would operators like to see next?

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CRM Serving 3rd. Parties

Operating the Future CRM for MNOs and 3rd. parties alike:

• Effectively interact with the customer in increasing number of everyday

situations.

• Development of “real time” data mining and CRM capabilities.

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Micro-Segments

Adequate approach on micro-segmented level:

interacting ads through channels and content to match the

addressees’ anticipation and action.

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More and even More

• Empowering the Brand fans and foes – user-generated ads.

• Enrichment of the ad forms:

– e.g. implementing interactivity in DVB-H services.

32

Get the Best from the Present

MNOs’ universe – partnerships and interoperability:

multiple platforms in multiple operators sharing a common identifier:

the MSISDN,

and addressing the MSISDN with ads, adequate for respective profile and

situation.

33

Fine and Fine

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