By Wandrille Pruvot, Regional Director, Europe
Every year – for at least five years now – advertising and new media executives have declared “THIS is the Year of the Mobile Internet!” and while the statement has been true in much of the world (you need only look at BuzzCity's remarkable success in places like Asia and Africa), it has not been the case so far in Europe.
Will 2009 finally be THE year?
We're seeing strong growth in the European mobile market. But unless we see some fundamental changes on the part of the telecom operators, I'm afraid Europeans will still have to wait before they can truly enjoy and benefit from the mobile revolution.
THE (BERLIN) WALL
The first problem is too many telecom operators still make it difficult for consumers to explore the mobile internet. Instead of playing their role as a pipe, European telcos still try to keep eyeballs on their own portals.
In Germany, for example, almost no one goes off-portal. It's just too expensive. A story making the rounds in the European mobile industry is that a German guy gives his dad a new phone as a birthday present. He's showing him how to use all the functions. This is the directory, this is for sending messages, this is how you take a photo, etc. Then he comes to a button for the mobile internet and his voice sharpens a bit: “Dad, never ever touch this button,” he warns. “We can't afford it!”
Just to give you a basis for comparison, in Indonesia, the cost of mobile surfing is practically free. When prices dropped there, the number of page views went from zero to several million each month.
In Germany, Vodafone charges 20 cents per minute (12 euros per hour). O2 has a reasonable plan -- 8.5 euros per 200MB -- but they only target business users. And newspaper-turned-mobile provider Bild Mobile is now offering free surfing -- but only for their own portal, bild.de. Bild Mobile charges 35 cents per MB (70 euros per 200MB, so much more than even O2) if you venture off their site.
The pricing model is clearer and more affordable in France and the UK. While Vodafone charges 12 euros per hour in Germany, pay just 50% more and you get unlimited on-portal surfing in the UK. Of course, most consumers would like to surf any site they like, not just a carrier's portal, but at 35 pounds a month (43 euros), this is still affordable.
Pricing in France is comparable to the UK. SFR charges 40 euros per month. There's even a Google search box on SFR's portal. But the French carrier places barriers in the way. Start a search and a message appears warning you are about to leave the site of the operator. It's like SFR is saying “Be very very careful. It's a dangerous world out there. Even Google search results could be bad for you and your phone.”
SIMPLE PLAN, BUT . . . .
(Don't Forget to Tell People)
The Czech Republic is #28 in Europe when it comes to mobile traffic, with less than one million page views per month.
But T-Mobile has a pretty good offer, at least that's what their rep told me. I told him that T-Mobile's mobile surfing charges weren't clear. He disagreed. “You can roam the internet for just 1 Euro a week,” he said.
“So how come people aren't using it?” I asked.
His reply: “Because consumers don't know about it!”
Build it and they will come? Well, only if you know where to go, how to get there and how much it will cost. With a pricetag of just 1 Euro a week, T-Mobile should be packaging mobile browsing with its normal services, not as a special opt-in.
SO, WHAT'S CHANGED?
I don't want you to get the wrong idea. There is some positive movement in the European mobile market.
First of all, telcos are collaborating to define the metrics of the European industry. Common metrics will make it easier for advertisers to make buying decisions and calculate ROI.
Second, brands have a clearer idea of where to turn when they want to advertise. A few years ago, mobile ad companies claimed they could do everything -- media buying, technology, consulting, you name it. Today, there is more differentiation and specialisation. Advertisers can work with
Third, brands no longer question the validity of mobile advertising. They understand the value of the medium. However in Europe this is now a mis-match between (a) markets that advertisers want to reach and (b) markets with enough eyeballs to warrant advertising.
With more than 103 million banner ads in the third quarter of the year, Romania is by far the largest European market. But European advertisers would much rather target German consumers, whose spending power far outweighs that of Romanians. Unfortunately, there's just no off-portal mobile traffic to speak of Germany, so we can't service the advertisers' demand.
REMEMBER: WHEREVER YOU GO, THERE YOU ARE
What needs to happen? It's really very simple. European telcos need to
Every year – for at least five years now – advertising and new media executives have declared “THIS is the Year of the Mobile Internet!” and while the statement has been true in much of the world (you need only look at BuzzCity's remarkable success in places like Asia and Africa), it has not been the case so far in Europe.
Will 2009 finally be THE year?
We're seeing strong growth in the European mobile market. But unless we see some fundamental changes on the part of the telecom operators, I'm afraid Europeans will still have to wait before they can truly enjoy and benefit from the mobile revolution.
THE (BERLIN) WALL
The first problem is too many telecom operators still make it difficult for consumers to explore the mobile internet. Instead of playing their role as a pipe, European telcos still try to keep eyeballs on their own portals.
In Germany, for example, almost no one goes off-portal. It's just too expensive. A story making the rounds in the European mobile industry is that a German guy gives his dad a new phone as a birthday present. He's showing him how to use all the functions. This is the directory, this is for sending messages, this is how you take a photo, etc. Then he comes to a button for the mobile internet and his voice sharpens a bit: “Dad, never ever touch this button,” he warns. “We can't afford it!”
Just to give you a basis for comparison, in Indonesia, the cost of mobile surfing is practically free. When prices dropped there, the number of page views went from zero to several million each month.
In Germany, Vodafone charges 20 cents per minute (12 euros per hour). O2 has a reasonable plan -- 8.5 euros per 200MB -- but they only target business users. And newspaper-turned-mobile provider Bild Mobile is now offering free surfing -- but only for their own portal, bild.de. Bild Mobile charges 35 cents per MB (70 euros per 200MB, so much more than even O2) if you venture off their site.
The pricing model is clearer and more affordable in France and the UK. While Vodafone charges 12 euros per hour in Germany, pay just 50% more and you get unlimited on-portal surfing in the UK. Of course, most consumers would like to surf any site they like, not just a carrier's portal, but at 35 pounds a month (43 euros), this is still affordable.
Pricing in France is comparable to the UK. SFR charges 40 euros per month. There's even a Google search box on SFR's portal. But the French carrier places barriers in the way. Start a search and a message appears warning you are about to leave the site of the operator. It's like SFR is saying “Be very very careful. It's a dangerous world out there. Even Google search results could be bad for you and your phone.”
SIMPLE PLAN, BUT . . . .
(Don't Forget to Tell People)
The Czech Republic is #28 in Europe when it comes to mobile traffic, with less than one million page views per month.
But T-Mobile has a pretty good offer, at least that's what their rep told me. I told him that T-Mobile's mobile surfing charges weren't clear. He disagreed. “You can roam the internet for just 1 Euro a week,” he said.
“So how come people aren't using it?” I asked.
His reply: “Because consumers don't know about it!”
Build it and they will come? Well, only if you know where to go, how to get there and how much it will cost. With a pricetag of just 1 Euro a week, T-Mobile should be packaging mobile browsing with its normal services, not as a special opt-in.
SO, WHAT'S CHANGED?
I don't want you to get the wrong idea. There is some positive movement in the European mobile market.
First of all, telcos are collaborating to define the metrics of the European industry. Common metrics will make it easier for advertisers to make buying decisions and calculate ROI.
Second, brands have a clearer idea of where to turn when they want to advertise. A few years ago, mobile ad companies claimed they could do everything -- media buying, technology, consulting, you name it. Today, there is more differentiation and specialisation. Advertisers can work with
- an agency for advice on which type of mobile service is best for a specific campaign (SMS, mobile banners, etc.)
- a mobile search company like Google (though this is still not so developed)
- a local network or operator (for on-portal ads)
- an ad network like BuzzCity.
Third, brands no longer question the validity of mobile advertising. They understand the value of the medium. However in Europe this is now a mis-match between (a) markets that advertisers want to reach and (b) markets with enough eyeballs to warrant advertising.
With more than 103 million banner ads in the third quarter of the year, Romania is by far the largest European market. But European advertisers would much rather target German consumers, whose spending power far outweighs that of Romanians. Unfortunately, there's just no off-portal mobile traffic to speak of Germany, so we can't service the advertisers' demand.
REMEMBER: WHEREVER YOU GO, THERE YOU ARE
What needs to happen? It's really very simple. European telcos need to
- Drop the barriers to mobile surfing.
- Adopt clear affordable pricing models.
- Educate consumers
