That’s a question one can’t help but ask Patrick Parodi, CMO of mobile advertising solutions provider, Amobee. As chairman and global board director of the Mobile Entertainment Forum , Parodi loves to play the role of evangelist, telling mobile operators to turn into a media company.
In an interview with ET, the messiah of mobile entertainment and marketing speaks at length on how mobile operators are probably close to missing the bus, the lessons they could learn from the commoditisation of internet service providers (ISPs). And, of course, the fate of the TV station.
Mobile marketing is largely tactical or promotion-led , and is rarely part of a long-term strategy. Is the mobile useful only as a shortterm marketing tool?
To a great extent, mobile marketing is being used as a direct marketing tool for lead generation and as a push model. That’s going to change. We are going to see mobile more as a media option where the user becomes the centre of the medium. That’s largely happening because of the advancement in handsets like the iPhone, or what others like Nokia, HTC and Google’s Android platform are doing. From our perspective, the operator is in the centre of the wireless ecosystem. But they have a big job ahead in accelerating their networks to become media companies.
But currently most mobile service operators are content playing the role of communication technology providers...
What you have currently is not mobile media, but just a communication system that lets you download music, entertainment etc. To become a media vehicle , you need to leverage the information that sits in an operator network and deliver insights to marketers . But unless this is done by all the operators in a collaborative way, it’ll be very limited in terms of a growth opportunity. Operators need to step up and take an active look at their role in becoming media companies, and not just focus on delivering bandwidth , but also deliver value to advertisers.
Mobile as a media vehicle could be restrictive to high-end mobile phones. Isn’t it early to talk about mobile marketing in India, where high-end handsets have a relatively small user base?
Let me give you an example of advertising that can happen on all handsets. A single SMS has the capability to carry 164 characters. Most of the times, consumers do not use up all that space. In Europe, the average message has only 70 characters, and the volumes are huge. In the UK, for instance, during peak hours 2,500 messages are sent every second. Even if all those messages were 100 characters each, you are still left with an inventory of 160,000 characters of potential advertising space per second. That’s a lot more space than what Google generates with Adsense and their search engine today. That’s the kind of inventory that lies unused today.
Aren’t several smaller players tagging ads on SMS and mobile phone calls already?
The trouble with the smaller attempts is that they have to be scalable. It’s very critical about where the operator fits into the process and if the end user benefits. That’s critical and a definite need because if users do not benefit , then the audience is dead and the medium is dead.
Are user requirements and their acceptance of mobile marketing methods ever kept in mind?
It’s interesting because there are cultural issues here. In Europe, there are discrepancies between the Italians, French and the British when it comes to attitudes towards mobile advertising. India will have its own flavour, as in this country you have trucks plying on roads with messages saying, ‘Honk, please’ . In several countries, honking is an intrusion, but here it seems to be an invitation.Is the making of a media company out of a mobile operator all about content and creativity?
Building an audience is the starting point. It’s interesting that operators already have an audience for things like peer-topeer SMSing and there is an opportunity to monetise it. Ironically, what’s getting service providers to look at mobiles as a media system is the competition that they are beginning to get from the likes of Yahoo!, Microsoft and Google.
When the internet became big in the US 10-15 years back, there were companies building content and others building pipes to serve that content. Many years later, we realised that people building pipes were reaching a saturation point. At the same time, Google became one of the world’s most powerful companies. For mobile companies , because they have 10 years of the internet backdrop, they can see what happened to the ISPs. The wireless operators can benefit from the experience of others and ensure that they do not get commoditised.
What are the things they need to get right?
The main thing is to devise a common way of measuring this audience. In the UK, the GSMA (telecom industry body) has taken a step forward by getting traffic from all networks and directing the service logs into one third-party service provider. This third party is going to tell the advertising community what the mobile media generates in terms of page views, the length of exposure and so on. Then, you tie this information back to the panel data for demographic and behavioural information. That’s a quintessential first step.
Most mobile advertising parameters still talk about impressions delivered, click-through rates, intent to purchase and so on. Can mobile advertising deliver sales and shift the focus to performance ?
We ought to be careful not to carry forward too many internet parameters and frames of reference, because mobile is not internet. People didn’t use radio parameters to measure TV and people are not buying mobiles phones to search the web, particularly not in India. This new media is going to have new KPIs, new measurement formats and engagement rates that are not just about click-throughs . When that happens operators will tell advertisers, “You only pay me if you make some money.”
Apart from operators, will device manufacturers also become media owners in a way?
Absolutely. On one side, operators are getting a big squeeze from Google, Microsoft and Yahoo!, and on another side by iPhone and Nokia, so there is definitely a need to react and move fast.
Do you see increasing collaboration between device manufacturers and the operators?
It’s a strenuous relationship. I think Apple was very effective in developing a model where they could engage with operators and generate revenue out of voice, which is a first. This is creating some different models. Nokia is doing the same thing with music by paying a lot of money to record labels to load songs on phones. That’s shifting the model as well.
The question that I have is, is this model sustainable over time? Because when the iPod came out, Apple subsidised iTunes because that’s the way they could get people to buy the product. Apple is basically a company that makes money from consumer electronics hardware and the music industry pretty much got affected because they were about making money from music.
We are seeing a lot of shifts and mobile is playing its role in these shifts. Also, I think advertising has a role to play. Only you need to be careful as the mechanism of mobile as a media is different, and the people involved are different and are coming from different angles. There is an appetite for sure. In South Africa, one operator provides an option called Please Call Me, which allows you to send free message to someone to call you and that message is supported by ads.
Will mobiles have the power to kill the TV station?
No, I don’t think that’s going to happen. Everyone said that the music industry would be killed by the internet, but music retailing has just reinvented itself to its current form. Initially, what stopped the music industry from going digital was the fear of piracy. But, everyone knows the story forward.
6 months ago