February 03, 2009


By Wandrille Pruvot, Regional Director, Europe

Europe is facing its worst recession since World War II. Economic confidence – by consumers and businesses alike – is at a record low, according to the European Commission which first started charting confidence nearly 25 years ago. The IMF predicts that the euro-zone economy will shrink by two percent in 2009. And it seems like every day another major European company announces job cuts.

But I expect mobile advertising in Europe to grow – not contract – in 2009. Brands will switch to mobile advertising as they cut back on traditional campaigns. And new applications and content will fuel a growth in mobile page views which in turn attracts advertisers. Innovation – in ad campaigns, business models and applications – will drive this growth and be the key for successful companies. 

Since the economic crisis started late last year, the number of accounts that I oversee in Europe has risen, not contracted. More generally, European ad spend to date has not fallen either.

Mobile advertising is cheaper and more cost-effective than print media, radio, TV and outdoor ads.

A quick recap of the major advantages and trends (as these have been written about more extensively elsewhere):

  • Mobile ad rates are dropping due to increased inventory.
  • The continuing expansion of the mobile internet will further increase inventory.
  • The personal nature of the mobile phone provides unprecedented targeting capabilities.
  • Unlike SMS push-marketing, the opt-in and non-intrusive manner of mobile advertising does not violate consumer privacy (and does not annoy users).
  • Enhanced mobile campaign metrics make it easier to analyse and improve ROI.
Meanwhile, I expect the recession to lead mobile publishers and application providers to monetise their content more quickly. In recent years, companies have advertised products and provided them for free upon launch, with the goal of attracting a user base first. Now, however, companies are talking with us about how they place banner ads inside an application and sell ads more quickly.

In 2008, the BuzzCity Mobile Advertising Network served 19.5 billion ads and grew by more than 300 percent. Romania, the UK and Norway are the biggest European markets at the moment, accounting for more than 600 million ads served.

A year from now, I expect to report higher numbers and deeper European penetration.

INNOVATION - PART 1 (Sales & Marketing)

Renault is a great example of a major brand with integrated campaigns. The French automaker launches a mobile site for every new product in sync with its radio and TV ads. Take a look at the site for Renault's Laguna Coupe. You can view the car inside and out. In addition to text, there are pictures and videos profiling the Laguna's major selling points, including the Bose sound system and four-wheel drive.

The multimedia is great, but Renault also adds an element of interactivity to boost direct sales. Click on “Try It” and you're asked to enter a postal code. This then brings up a list of nearby resellers. Each entry contains a link to a map. Click on the phone number and you're connected straight away to the car dealership to set up a test drive.

INNOVATION - PART 2 (Business Models)
The biggest European mobile advertisers, though, continue to be companies that offer mobile value-added services, like ringtones, wallpapers, videos, etc. Typically, consumers pay a fee to download a limited number of items within a set period of time. Vivendi – the French entertainment giant which owns Universal Music, movie distributor Canal+ , a majority stake in French telecom carrier SFR and produces the popular video game World of Warcraft – is trying a new approach with its mobile subsidiary ZaOza. It's offering unlimited downloads in an effort to attract greater market share. ZaOza, whose name comes from a Chinese word meaning "word of mouth", also openly encourages customers to share mobile content with other subscribers. Since launching a year ago, ZaOza has attracted 350,000 French subscribers.

INNOVATION - PART 3 (Applications)
Taptu -- based out of Cambridge, England -- is a new mobile internet search engine. It's a “google for mobiles.” But it's actually much better than the big G. Google transcodes internet sites so that they can be viewed on a mobile device. The problem with this though is that it often doesn't work well. The sites look squeezed and can be hard to read or navigate. Taptu, on the other hand, only provides results that are on the mobile internet and that are compatible for your phone. To quote their website:

"If you're looking for high-resolution panoramas of the Tibetan countryside, you might not find them here. But if you're looking for music, images and web results perfectly shaped for your mobile, then give Taptu a go."
In addition to English, Taptu offers search in four European languages: French, German, Italian and Spanish. It's pretty unusual for a start-up to launch in multiple languages, but the feedback to date has been good.

[Full disclosure: BuzzCity is partnering with Taptu to develop a new application for myGamma. But I use their search engine myself and really like it.]

For companies, this is a time to try new things. When the economy is strong, it's easy to coast and keep doing what works. But in challenging economic times like today, business leaders need to search for cost effective solutions and new ways to monetise their products. The mobile internet is bound to benefit.

Finally, in my October blog, I wrote that European telecom carriers were restricting growth by making it difficult and expensive for consumers to surf outside telco portals. Unfortunately these barriers still exist and carriers are not giving any indication of changing now. However a boom in mobile ad inventory (resulting from more published content) and innovations outside the carriers' control will fuel mobile advertising in the year ahead.