Blog from Cisco's Mobility Community, https://www.myciscocommunity.com/community/sp/mobility

1. Service Provider Mobility: Mobile
Advertising – The Operator Holds the
Advantage
Posted by Brian Walsh Sep 15, 2009
The online advertising market is forecasted to exceed $40 billion in the U.S. and $52 billion globally
by 2011, representing the fastest growing segment of the overall advertising market (Piper Jaffray
& Co.). Mobile Advertising is the fastest-growing segment within online advertising and is expected
to exceed $14 billion globally in 2011 (Strategic Analysis). And mobile advertising is effective! Multi-
channel ad campaigns have demonstrated that a mobile ad component delivers a disproportionately
larger percentage of campaign traffic, click-through rates, and other call-to-action behaviors than
fixed line online advertisements.
An Imbalanced Ecosystem
Mobile operators have a unique opportunity to insert themselves into – and gain
revenues from – the online advertising ecosystem. In the fixed broadband internet,
a small number of players have dominated the market, leaving service providers
struggling to gain a meaningful share of advertising revenue. But in mobile, the
advertising market is still nascent, and operators have the opportunity to clearly
establish a role as a compensated player in the value chain.
The mobile advertising ecosystem is made up of multiple players: advertisers, advertising networks,
agencies, publishers and mobile operators. Advertisers contract for an ad campaign with an
advertising agency, who works with online publishers and advertising networks to place ads (via web
banners, Flash-based ads, text links, or embedded video) over mobile operator networks into the ad
inventory on web pages. In the existing ecosystem, the mobile operator receives very little revenue
from mobile banner or display advertising delivered to its subscribers on smartphones or laptops/
netbooks with mobile broadband dongles/aircards.
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2. Service Provider Mobility: Mobile Advertising – The Operator Holds the Advantage
Challenges to Mobile Advertising Targeting
Selection of ads for delivery on a web page usually starts with contextual advertising,
which involves the placement of ads based on the content and theme of the visited
web page. However, contextual advertising has limited effectiveness because while the
ad insertion might have relevance to the web page, it isn’t necessarily relevant to the
individual user accessing the web page.
Traditional methods for improving online ad targeting have relied on tracking of web browsing
behavior with cookies, which are used by advertising networks to track web preferences and usage
patterns. However this approach is often unreliable because many savvy users regularly delete
cookies or set their browsers to a privacy mode to block them. Other approaches to track users
based on behavioral targeting techniques have been opposed by consumer privacy groups in some
countries.
Operators Can Uniquely Improve Mobile Advertising Effectiveness
Missing from today’s approaches is the role that mobile operators can uniquely play to
improve the performance and efficiency of mobile banner and display advertising. Advertisers,
online publishers, and advertising networks are willing to pay operators for accurate and reliable
targeting information to improve the delivery of campaigns and thus command higher CPM rates
from advertisers. Operators have additional subscriber information such as location, user device
type, bandwidth speed, etc., which can enhance the effectiveness of online advertising campaigns.
The challenge for operators is to provide this type of information and protect subscriber privacy while
still providing high value to the advertiser.
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3. Service Provider Mobility: Mobile Advertising – The Operator Holds the Advantage
A new and interesting approach that Cisco is developing with partners and operators provides
the participants in the online advertising ecosystem with anonymous demographic data that can
be used to effectively target advertising without compromising subscriber privacy or tracking the
behavior of individual users. Using a high-speed, low-latency application blade on the
Cisco 7600 Series Router, the operator inserts an “identifier” into the HTTP headers
of selected IP data streams, and shares these encrypted identifiers with trusted online
advertising partners. These operator-controlled identifiers are correlated with demographic
databases which can only be accessed by advertising partners registered to the
operator’s advertising ecosystem. Information is delivered in real-time to the advertising
network partner describing the source of a web request in general terms (locality,
demographic segments, etc.) without tracking user behavior or directly identifying the
subscriber. With such data available, a highly relevant advertisement can be inserted
from the ad network in real-time onto the retrieved web content page. By using only
anonymous demographic information, the solution never handles any personally
identifiable information (PII), which avoids privacy concerns that have arisen with other
online advertising targeting approaches.
The types of subscriber data that the operator can provide to advertisers anonymously with this
HTTP header insertion approach include:
· User locality Information – the subscriber’s postal code can be correlated with
commercial databases to create geo-demographic profiles based on local income levels, household
size, voter data, and other population data
· User Device and Access Information – e.g., access network bandwidth, user's
roaming status, type of subscriber device, etc.
· Other third-party data – further refinement can be gained with additional data such
as local weather, “store locator” information for restaurants, hotels, or retailers who
wish to advertise promotions or offers to targeted demographics.
Operators could further leverage their customer relationships to include additional
voluntary opt-in information from subscribers – perhaps in return for free, ad-funded
services – that could be used by advertisers to uniquely personalize online advertising
and marketing campaigns. Lastly, with very transparent subscriber Opt-in privacy
policies, mobile operators might further enhance targeted advertising with subscriber
location information from the operator’s network.
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4. Service Provider Mobility: Mobile Advertising – The Operator Holds the Advantage
This new approach to Mobile Advertising can provide new revenues for mobile operators, more
effectively marketing campaigns for advertisers, and more engaging experiences for subscribers who
would receive more relevant advertising and content.
Stay tuned to hear more about this new break-through approach in the near future.
712 Views Tags: mobile_internet, mobile_monetization, targeted_advertising, mobile_advertising
Oct 27, 2009 1:25 PM David Almstrom
the only problem in this equation is I that most operators are not capable of managing
this type of service. You are spot-on with the opportunity that the operator has in terms of
knowing the exact location of the user, handset capabilities, etc. However, giants like Google
is running faster and is already leveraging this type of information.
If you have downloaded the very handy Google for Mobile app (which I have on my E71),
when I start it, the first thing the apps does is to determine the location (postal code). The
App already knows which type of device I have and if I have a cookie in the browser, Google
will also know my gmail-address (e.g. iGoogle services) and is far better placed to offer
value-added highly targeted ad services.
However, ad-funded free services is the way to go for operators in the future to reach out
and create higher value services, such mobile mail (free data, free subs, etc.) and/or free
music download/streaming. Cisco's approach is quite interesting in how to provide relevant
information to the ad networks. But from my experience talking to the ad/agency industry,
they know little to nothing about how to target a mobile user base and offer different types of
services/freebies.
Nov 6, 2009 10:07 AM Brian Walsh David Almstrom in response to
David you are right that operators haven't yet shown that they have the business or ad
industry knowledge to "insert" into this market. Mobile advertising is a complex ecosystem,
and operators are going to have fit into those rules of engagement while delivering
subscriber/network-based value that ultimately leads to improved targted advertising
campaign results.
The mobile ad market is still early days though, so operators do have a chance to craft a
monetized role in the value chain, but as you say, Google is already moving quickly!
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5. Service Provider Mobility: Mobile Advertising – The Operator Holds the Advantage
Generated by Jive SBS on 2009-12-07-07:00
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