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- 2. Mobile Advertising Opportunity 2008-05-25
2008-10-15
The mobile advertising landscape
Expected to generate substantial revenues in the future
The mobile is an unique marketing channel because it is
personal, interactive and always on
Some operators estimate 1-5% of tot. revenues may come from
‘mobile advertising’ in 5 years time
50% of brands say they will spend 5-25% of their ad
spend on mobile in 5 years time
© Ericsson AB 2008 2 Mobile Advertising Opportunity 2008-10-15
Mobile advertising has created a lot of hype but also a lot of
uncertainty among all parties involved such as operators, brands
and agencies. The forecasts for mobile advertising spend vary
depending on source but it is clear that the revenue potential is there
but there is still uncertainty regarding the exact size and timing of the
market. The figures we see from various analyst vary greatly depending
on what markets and factors they include in their estimates (mobile
banners only, with/with out SMS marketing etc).
At the same time the mobile provides us with some unique capabilities:
The mobile is personal and always there
The mobile has become one of our most personal possessions. We rarely
leave the house without it, along with our wallet and keys and we don't
lend our phone except in emergencies. And everyone has one and the
mobile device contains personal and private information. Also, now that
the mobile provides information and content in addition to voice, it would
appear to be the ideal platform for personally targeted advertising where
you 'know' the user, as opposed to the Internet where you only 'know' the
PC.
The mobile is always on
Many people sleep with their mobile device and it is always on - sad but
true. The user is out and about, the device is always on and when you add
location information it becomes really interesting
It is interactive
We can start to interact with individuals in a direct and interactive way
Ericsson AB 2008
2008Ericsson AB 2008 2
- 3. Mobile Advertising Opportunity 2008-10-15
Behaviors are changing
Driven by the youth….
Voice 93% Daily
% who do daily Total 15-24 25-54 55-69
SMS 92% Daily
Reading newspaper/magazines 47 33 47 58
MMS 19% Weekly
Watching or listening on media
content 12 23 10 6
Browsing the internet 31 54 31 10
Instant Messaging 47% Weekly
Watch TV 83 73 83 91
Communities 29% Weekly
YouTube (or similar) 40% Weekly
Source: Ericsson ConsumerLab study Czech Republic 2008
© Ericsson AB 2008 3 Mobile Advertising Opportunity 2008-10-15
This year Ericsson Consumerlab did a extensive study of the CZ ICT
market including over 1500 face to face interviews with a representative
sample of the CZ population. The study covered values, attitudes,
behaviour and current and future usage of mobile services, fixed services
and Internet services. For example, we see a change in media
consumption going from traditional type of media to online consumption
and this is very much driven by the young population. One example, is
that now, for some segments the Internet and Youtube has become the
primary source for watching entertainment , news and music
Observing how media is consumed and how time is spent and comparing
the Czech youth vs. the more mature Czech population we detect an
ongoing change in media consumption
To a large degree driven by ICT usage
Ericsson AB 2008 3
- 4. Mobile Advertising Opportunity 2008-10-15
Online advertising market in CZ
Internet ad spend an indicator for mobile advertising potential
Time shift in media consumption is not
being fully reflected in advertising spending
yet, Change Takes Time…
Ad spending distribution in CZ
Total ad spend in CZ ~ 1.1 billion Euro
Online
15%
Radio Online ad spend in CZ ~ 170 mEuro
TV compared to Sweden ~ 420 mEuro
9%
45%
20% growth of online in CZ compared to
5% for total media spend
Print
31%
Mobile ad spend in Sweden 2007, 5.3
mEuro expected to grow to around 50
mEuro 2010
Source: Media agency OMD, Svenska Dagbladet
© Ericsson AB 2008 4 Mobile Advertising Opportunity 2008-10-15
Mobile advertising is still a very small market both in more developed
online markets such as Sweden and also in CZ
Internet advertising spend can be considered a strong indicator of the
degree to which brands have embraced electronic forms of advertising
and can be an indicator for mobile advertising potential. Online ad spend
in CZ is 170 million Euro, which is around 30% on what is spend on the
TV medium. In Sweden the change in media spending has evolved faster
and online ad spend in Sweden is around 420 mEuro, which is same as
TV, the same figure for Austria is 270 mEuro.
Mobile advertising turnover in Sweden last year was 5.3 mEuro (1,25% of
online spend) expected to grow to around 50m Euro 2010, for Cz that
would be around 2 million Euro, with same growth rate the value in the CZ
market would be around 20 million Euro
US: 55
Sweden 31 Euro in 2006
Ericsson AB 2008 4
- 5. Mobile Advertising Opportunity 2008-10-15
Relevant for who?
Who would be the target for mobile advertising in CZ?
Consumer interest in mobile advertising in CZ
High share of early adopters
Favorite brands = friends
Age
They arerelated brands =
Interest driving change
21%
45-59
17% accepted to certain degree
30% High interest for new services
35-44
25%
Any brand = not in my mobile
34%
25-35
32%
49%
15-24
42%
Interest
0% 10% 20% 30% 40% 50% 60%
Ads via SMS/ MMS Special promotions based on location
Source: Ericsson ConsumerLab Czech country study 2008 Base: Main mobile phone user
© Ericsson AB 2008 5 Mobile Advertising Opportunity 2008-10-15
But the interest is there and the interest is much higher than in many other
markets….
High share of early adopters in Czech Republic compared to other
European markets (over 30% defined as early adopters)
Provides a good potential for new services
Have a lot in common with other early adopters in the rest of Europe
Czech Republic is a mobile centric market compared to other
European markets
Low fixed usage today expected to decline even further
The convenience of the mobile is the primary reason for not using fixed
28% use VOIP on a weekly basis which is high compared to other markets
– offers possibility for mobile operators to attack the declining fixed phone
market
Usage of mobile phones services is still quite basic but in line with
other European markets
SMS is very high (91% use it on a weekly basis)
The early adopter segments are driving change
There is a high interest for new mobile services
There are barriers in the market for using mobile VAS services - not only
price but also information, awareness and configuration related
Similar to the analysis of advertising channels that are allowed into
consumers’ private sphere, different brands are accepted to a varying
degree depending on the intimacy of consumers’ relationships to the
brands.
A consumer’s favourite brands are perceived more in terms of friends than
in terms of commercial actors and are therefore accepted as something
Ericsson AB 2008
that actively enhances and enriches the consumer’s life world. 5
- 6. Mobile Advertising Opportunity 2008-05-25
2008-10-15
Mobile advertising opportunities
Operators
– New revenue stream
– Differentiation
– Speed up consumer adoption for new services
Consumers
– Subsidized content and services
Advertisers
– Targeted - messages must be more engaging and
relevant to be of interest
– Interactive - orientate their values around
connection and sociability
Agencies
– New area of expertise and improved campaigns
© Ericsson AB 2008 6 Mobile Advertising Opportunity 2008-10-15
There are opportunities for all players in the value chain….
Operators
ARPU is flattening out and operators need to find new revenue sources.. For the operator it could mean several revenue openings:
New revenues
selling and leveraging inventory on their own mobile portals and enablers, increasing data traffic in their network, as well as selling information such as location from their network,
and billing opportunities
Differentiate
Could also be a way to differentiate and reach out to new segments in the market, to some exten what the Czech operators have done today, BLYk would be another example or
VIPnet in Croatia
Drive adoption of new services
Could also be away to speed up the adoption of new services and reach out to new customers offering subsidised services to the consumers.
Reduce churn
Banner ads to pre-paid customers, convincing them to switch to post-paid
Banner ads to post-paid subscribers two months before their contracts end, convincing them to renew for another year
Promote content partners
Promote content partners on the WAP deck
Fixed partner ad positions can be sold (or given) to content partners
Consumers
Consumers will not open their wallets every time a new premium service is launched so the possibility to receive subsidized content and services in regards to their needs and
interest would be attractive for at least some segments. For the Consumer mobile advertising provides the opportunity to receive personalize and interactive messages at the right
time in the right context, if that happens that could actually be seen as a benefit for the consumer.. Also, certain segments are expected to be more positive towards non-traditional
forms of marketing and advertising such as mobile advertising and the Internet
Advertisers
•New type of media consumption from traditional to online., Fragmented youth attention - Marketing messages must be more engaging and relevant to a much greater degree than
in the past
•Many large buyer of advertising is cutting down on TV ad spend and increase the expenditure on Internet channels
•Decreasing effectiveness of TV as an advertising medium, Brands will more strongly orientate their values around connection and sociability
•40% of major Eurpoean brands have already deployed SMS campaigns, and 18% have deployed MMS campaigns
Agencies
The Agencies can use the mobile advertising opportunity to develop a new area of expertise and improve the results of their clients campaigns.
Ability of mobile advertising to be highly personalised and targeted – will push up the rate card
For advertisers the mobile channel present an opportunity to reach relevant customers in a time when traditional media like TV is starting to lose the customers attention. Web and
mobile marketing will more commonly fit alongside traditional media but bring an increasingly personalized and customizable way to engage an audience
* Hard to reach their audience, the cost for reaching the same audience has increased(fragmented media consumption). Especially the youth segment. They decide when, where
and how they consumer media.
Ex: in 1965 – reach 80% of the adult US in 3 60s commercials. Now it takes 120 prime time commercials for to obtain the same reach. (source: MediaVest, MMA Forum June 07)
Ericsson AB 2008
2008Ericsson AB 2008 6
- 7. Mobile Advertising Opportunity 2008-05-25
2008-10-15
Industry challenges and barriers
Operators
– Lack of knowledge and inventory to monetize
Consumers
– Fear of intrusiveness
Advertisers
– Uncertainty of Return on Investment
Agencies
– Expensive and difficult to buy mobile
advertising
© Ericsson AB 2008 7 Mobile Advertising Opportunity 2008-10-15
But there are also challenges….
Operators
For many operators this is a new type of business environment
representing a fundamental shift in how to do business, moving into a
more media and lifestyle type of business.
They often do not have the competence and resources to handle this new
environment and are still uncertain of the opportunities
Consumers
It is still uncertain to what extent consumers will accept advertising on
there mobile although response figures are quite high and early trials have
been quite positive especially within certain segments. The key question
would be opt-in, what segments to target and what are the incentives for
the consumers
Advertsiers
Still in the beginning phase and advertisers are still uncertain of the
potential of the mobile channel, what they can do outside SMS push and
the ROI. They see it as a powerful channel with SIM penetration of 130%
in CZ. For advertisers it is about reach, frequency, relevancy and ROI
Agencies
the challenge is that the medium is still immature, lacking standardized
metrics and a common buy and sell ecosystem. Also as long as the
revenues within this medium are small and other mediums still are
Ericsson AB 2008
2008Ericsson AB 2008 7
attractive they would focus on these areas.
- 8. Mobile Advertising Opportunity
Ericsson Networked Advertising 2007-06-13
2008-10-15
It is all about Relevance and Reach
Relevance Reach
Delivering the right Reach as many
content in the right people as possible
context to the right
person Across media,
platforms, devices
Targeted and and territories
personal, but not
intrusive
Revenues
© Ericsson AB 2008 8 Mobile Advertising Opportunity 2008-10-15
But we cannot forget the advertisers and agencies…..
Advertisers will not start to pull in money just because we have a 130%
SIM penetration in the CZ market. Advertising is all about relevance,
reach and frequency of consumer engagement
Delivering the right content in the right context will be key for both
advertisers and consumers when it comes adding value and increase
revenue for different stakeholders in the Mobile advertising value
chain.
Ericsson AB 2008 8
- 9. Mobile Advertising Opportunity
Ericsson Networked Advertising 2007-06-13
2008-10-15
Relevance is key
Relevant targeting is one of the major factors differentiating
mobile media from other advertising windows
Personalised
CPM rate advertising
Ad based on specific,
Contextual personal criteria, e.g.
advertising preferences, location,
usage, time.
Ad based on
contextual criteria, $50
e.g. type of
Anonymous content, location.
Advertising
$25
Ads are not based
on any targeting
Criteria.
$5
Level of targeting
Source: Eden Zoller, Ovum, May 2007
© Ericsson AB 2008 9 Mobile Advertising Opportunity 2008-10-15
The targeting capabilities with the mobile channels is one of the drivers for the interest among
advertisers and agencies.
Last winter Ericsson Business Consulting conducted a major study regarding mobile advertising interviewing
several major stakeholders in the value chain around the world. Several players including major brands and
media agencies concluded that relevant targeting is one of the major positive factors differentiating the
mobile media from other windows.
This is a great opportunity for operators since they sit on valuable customer and location information in
their networks, just waiting to be exploited.
But it is also important to find a balance. The balancer is that the more you target in mobile, the more you can
drive up the cost, but you sacrifice on the audience in CPM. Also the targeting capabilities should not be
overplayed either. At this stage, few advertisers or perhaps even more the agencies want micro-segmentation
and targeting at this point at the same time users may not be ready for such tight targeting either
Ericsson AB 2008 9
- 10. Mobile Advertising Opportunity 2008-10-15
How can we reach them?
Many potential advertising bearers for operators
SMS What operators do today
WAP MMS Messaging wholesale
Targeted Banners
RBT Games Pushed messages
Mobile search
Idle screen ticker `
Voice Music Ad funded/ free content
Prepaid budget notifications
Ad sponsored MVNO
Mobile Ad sponsored sub brand
Video
TV
Mobile TV advertising
Tiered advertising
Mobile
Portals Location based advertising
search
Idle Voice Ad funded email services
screen mail
© Ericsson AB 2008 10 Mobile Advertising Opportunity 2008-10-15
And the operators has several channels to be utilized….
So far SMS far outpaces all other mobile channels mostly via short-code opt-inns.
Outside messaging operators and off deck portals is where most advertising activity has
occurred to date. Improved pricing, better user experience, better handsets and richer
multimedia services will increase the adoption of the mobile internet and other value
added services which will increase the interest for this services as well in regards to
mobile advertising.
Targeted Banners
Typically on the operator controlled portal, launched by all major operators in WE
Push advertising
Dominated by SMS, MMS and WAP push, must be opt-in
Idle screen ticker `
AIS Thailand and Honda sponsored interactive content messages broadcasted twice a
day, appearing on screens when phones were in idle mode
Advertising funded and free content
Free video clips accessed through a specific section on the 3 portal titled `Free Stuff‘ (3
UK)
Eg interstitials while loading a game - Many operators in test phase but few commercial
launches
Subsidised and free content
Vodafone offered the same game at a standard price of £3, a subsidized price of £1, and
also for free
Sudoku type game, with ads between the levels
Ericsson AB 2008 increase in usage comparing full price to the subsidized - 60-fold increase when
A 6-fold 10
free
- 11. Mobile Advertising Opportunity 2008-10-15
What are they using?
Potential advertising formats today and tomorrow…
100% have a mobile phone
Over 90% use SMS on a weekly basis
Over 25% send/receive pictures on a weekly basis
45% of professional users send/ receive emails
Around 20-30% browse the mobile internet regularly
Over 40% of Young early adopters play games on their mobile
Around 10-15% use Ringbacktones
15% is downloading full length songs monthly
Around 5-10% is downloading video clips to their mobile
Source: Ericsson Consumer Lab survey Czech Republic 2008
© Ericsson AB 2008 11 Mobile Advertising Opportunity 2008-10-15
And a lot of the operators inventory is already used and the usage is
expected to increase when prices go down, users gets better handsets,
better and more interesting services…so a lot of inventory, some of more
interest for operators and brands than others but it is important to analyse
each channel based on the opportunity and the strategy you have set as
an operator
Ericsson AB 2008 11
- 12. Mobile Advertising Opportunity 2008-10-15
Managing Reach
Operators working together to make MA more attractive….
4 major operators in Sweden Reach. 2 Million (22% of Pop.)
have launched a cooperation
Agreed standard for formats, Major age group: 26–34 years
measurement and reporting
(GSMA) Pricing: Depends on the place on site
One point of contact for the
advertisers Revenue share between operators
depending on number of views per site
Ability to offer campaigns across
the operators networks
“We realized that not even with our large market shares we can create enough interest
among advertisers for the mobile channel so we asked ourselves the question: How can
we grow the market and make it more interesting? The answer was that we need to
work together” (Johan Lindgren CEO of Telenor Sweden)
Source: Svenska Dagbladet
© Ericsson AB 2008 12 Mobile Advertising Opportunity 2008-10-15
As I mentioned earlier the key is relevance and reach. We have talked about relevance but still the reach in
markets such as CZ is still limited. In Sweden, a similar sized market as CZ, the operators have started a
cooperation to increase the attractiveness of the mobile channel.
Publicerad: 30 september 2008, 10.23. Senast ändrad: 30 september 2008, 10.38
FYRAS GÄNG Sveriges fyra största mobiloperatörer Telia, Tele2, Tre och Telenor samarbetar för att få fler
annonsörer att använda mobiltelefonen som en reklamkanal. Samarbetet beskrivs som en ”kataly-sator” för att
få fart på tillväxten inom den mobila annonseringen.
Hård konkurrens på mediemarknaden har gjort att mobil-operatörerna har tvingats gå samman i en gemensam
offen-siv för att få fart på mobilannonseringen.
Tillsammans lanserar de ett paket som ska göra det enklare för annonsörer att nå ut till de två miljoner
användare i Sverige som surfar via mobilen.
–Det går inte ens med våra stora marknadsandelar att bli tillräckligt intressanta för annonsörerna så vi ställde
oss frågan hur vi skulle få marknaden att växa och kom fram till att vi måste göra någonting gemensamt, säger
Telenors Sverigechef Johan Lindgren.
Mobiloperatörerna har länge pratat om mobilen som nästa stora annonskanal. Än så länge omsätter mobil
annonsering dock ynka 50 miljoner kronor, vilket kan jämföras med tv- eller internet-reklam som omsätter 4
miljarder kronor vardera. En droppe i havet sett till mediemarknadens totala omsättning på 32 miljarder kronor.
Skälet till att genombrottet har lyst med sin frånvaro är att det har tagit tid att vänja folk vid att använda mobilen
för att surfa på nätet, men också att det har varit svårt och omständligt för annonsörer att placera
annonskampanjer på de fyra mobilsajterna, säger Tele2:s vd Niclas Palmstierna.
–Omsättningen för mobil annonsering har varit liten fram tills nu, men det har också att göra med att
marknaden inte har mognat förrän nu. Marknaden väntas växa till 500 miljoner kronor år 2010, och med detta
initiativ räknar vi med att påskynda den tillväxten, säger han.
I praktiken innebär samarbetet att de fyra operatörerna enas om ett särskilt annonsformat på sina respektive
mobilsajter. Istället för att annonsörerna måste anpassa sina annonsformat till respektive sajt, räcker det med
att annonsen utformas på ett sätt för att passa alla mobilsajterna. Annonsutrymmet ska förmedlas via
säljbolagen Jumptab och Adiento, vilket betyder att annonsörerna endast behöver en kontakt.
–De mobila portalerna är väldigt populära idag, vi tror att annonspaketet snart ska ha en räckvidd som
konkurrerar med de största mobila sajterna, säger Telias mobilchef, Håkan Dahlström.
Den begränsade mängden surfare som varje enskild operatör har kunnat erbjuda annonsörerna har varit en
bromskloss för tillväxten. En annan har varit den begränsade mätbarheten. För annonsörer är det i dagens
Ericsson AB 2008
täta annonsbrus viktigare än någonsin att veta hur många mottagare de når, och vad de får ut av sina 12
medieinvesteringar. En del av samarbetet innebär dock att operatörerna nu sluter upp bakom en mätstandard
- 13. Mobile Advertising Opportunity 2008-10-15
Ericsson experiences
NRK – Mobile TV Interactive Advertising
CNN Mobile – Ad revenue supported
news portal
Mobile TV Vodafone Spain / UK
Daimler Chrysler – Promo Application
© Ericsson AB 2008 13 Mobile Advertising Opportunity 2008-10-15
NRK
Ericsson and NRK conducted the world's first trial of personalized mobile TV advertising.
The trial has proven its effectiveness with a positive consumer response.
The trial lays the foundation for a mobile TV advertising business model. For
broadcasters and operators, the mobile TV application results in increased traffic and new
revenues from advertising and paid interactions.
Turner
“a logical fit where the customers and mobile operators benefit thruogh Turner focussing
on providing innovative news and entertainment content to its global audience and
Ericsson providing the technology behind it”
Mobile operators will be able to deliver access to Turner content through their own
branded portalsAnd/or
End-users will have direct access to the CNN mobile site from their mobile
devices (D2C) As part of a wide ranging deal, Ericsson and Turner are
collaborating to develop Turner's internet, broadcast news and entertainment
content for mobile multimedia environments.
The joint offering combines the delivery of Turner’s news and entertainment content with
Ericsson’s hosting and content management technology. The initial product launch for
mobile users includes CNN News portal, Cartoon Networks and Adult Swim
entertainment portals
Mobilization of Turner assets globally
Branded envrionement
News and entertainment content adapted for mobile multimedia
Focus om TV and video content
Advertising space
Enabled, operated and delivered by Ericsson
Delivery of content through operator channels to maximise service quality and exploit 3G
network capabilities
Ericsson AB 2008 Spain Mobile TV
Vodafone 13
New business model: live channels sponsorship
- 14. Mobile Advertising Opportunity
Enabling and Orchestrating Advertising 2007-11-19
2008-05-25
2008-10-15
Inventory
Ericsson helps to enable the mobile advertising
industry acting in different areas
1 2 3
Ad inventory enablers Orchestration tool Advertising networks
Ad Ad Ad
Ad
Industry Industry Industry
Industry
Ericsson Advertising Technical
The Mobile Advertising Exchange
Orchestration Orchestration Ad network
Orchestration Engine
Enablers and Orchestration Orchestration Orchestration
Enhancers
Country X
© Ericsson AB 2008 14 Mobile Advertising Opportunity 2008-10-15
• Ericsson offers a large range of inventory enablers like SMS and MMS,
Mobile TV, Ringback tones, music solutions, IPTV and On device portals. We
also provide data mining components that can help the customers increase
the value of their ad space.
• The inventory enablers don't provide full value for our customers if we can't
connect them to the advertising buyers in a good way. Ericsson provides an
orchestration system that enables interactive and personalized advertising
across platforms, that connects the available inventory to the advertising
industry in an efficient way, as well as reports back the results of the
campaign to the buyers.
• The solution is ready for trial Q4 2008.
1-2. Enable inventory and orchestration control; Ericsson support the customer in
embracing the advertising opportunity by enabling inventory and components
for CPM increasing information as well as a reliable orchestration tool.
3. The interfaces towards the advertisers is determined based on local conditions
When it comes to the third step of the Advertising strategy, our role is to
aggregate the inventory of several mobile operators in a market, or a region,
on a technical level and make it more easily available to the advertising
industry. You could see it as an “orchestrator of orchestrators” that facilitates
both campaign planning and result reporting across operators regardless of
what ad platform they have installed.
The technical ad network consists of two parts; 1. Ericsson as a technical
provider and integrator of the various stakeholders involved, and 2. One or
several local sales partners who will interact with the buying side of the
Ericsson AB advertising industry 2008 the available inventory from the participating
2008Ericsson AB and sell
2008 14
partners. I have tried to illustrate this on the slide that I attach.
- 15. Mobile Advertising Opportunity 2008-10-15
Summary
Great interest for mobile advertising
The key is relevance…for all players involved
– Build inventory – reach, incentives, non intrusive
Awareness and education
– Innovate and develop credible trials/ proof of concept
demonstrating the effectiveness of this channel
– Educate the advertising community about the opportunities,
capabilities and performance of the mobile channel
Making it easier to do business should be a high priority
– Standard formats, metrics and measurements
– Cross-network connectivity needs to be addressed
– More clarity around business models
© Ericsson AB 2008 15 Mobile Advertising Opportunity 2008-10-15
There is a lot of potential in this industry if we do it in the right way.
There is a great interest for targeted mobile advertising through the mobile channel from both consumers,
advertisers and operator perspective
The key is relevance for the consumer…
Message, Brand, Incentive, Format, User experience etc
…but also relevance for operators and advertisers
Revenues, Targeting, ROI, easy to reach relevant audience etc
Need to be innovative and produce credible trials/ research demonstrating the effectiveness of this channels
User acceptance, Metrics and measurement, Business models, Formats
Need to educate the advertising community about the opportunities, capabilities and performance metrics of
the mobile channel
Ericsson AB 2008 15