By Wandrille Pruvot, Regional Director, Europe
This week, I'd like to share with you the story of two French financial institutions, both of which are successfully using the mobile internet to attract young consumers.
One company is adopting a straight-forward sales approach, providing information about financial products and a connection to sales agents. The other is undertaking a branding campaign with no direct sales component, the sort of advertising more generally associated with soft drink and alcohol companies.
For both groups, the youth – particularly those under the age of 25 -- are a critical target market, because if you choose a bank by your mid-twenties, you're likely to stick with it for the rest of your life.
It's a sign of the times that these mainstream “brick and mortar” companies are now making the mobile internet an integral part of their advertising strategies, particularly to reach out to the younger demographics.
Let's take a look . . .
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.
IS MOBILE RECESSION-PROOF?
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.]
REFLECTIONS
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.
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
- 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.
The advantage of BuzzCity's approach is that (a) we can deliver the traffic and (b) we only charge for click-throughs not page views.
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
Three simple steps. Then, Europeans can truly celebrate The Year of the Mobile Internet.
