Opt In Advertising

July 2010

Around the world, there’s a quiet revolution taking place, as mobile operators begin to offer their subscribers the option of receiving advertising on their mobile phones, and the subscribers start to say “Yes please”.

This is not the advertising that mobile users see if they browse mobile websites or use free, ad-funded applications, but rather, advertising messages pushed out to their handset, with the advertising targeted at specific users, based on their expressed interests.

In truth, it’s not such a new concept. The Turkish operator, Turkcell, known as one of the most innovative in the business, launched its opt-in database in 2005, and now has almost 11m subscribers signed up to it. Until recently, however, other operators have been, perhaps understandably, nervous about letting advertisers loose on their subscribers. But there are sure signs that this is changing. In December 2009, the UK operator, O2, launched O2 More. Subscribers were invited to opt in to the mobile advertising offering, incentivised by the promise of offers and deals that are relevant to their interests, and that can save them money. Members are targeted based on parameters including age, gender, location, phone usage, and mobile internet usage.

While O2 does not release figures relating to the number of subscribers on the database, it did have 50 brands signed up at launch, including Cadbury, Adidas, Interflora and Blockbuster. O2 More members receive a maximum of one message per day on their phone.

O2’s move was followed in January of this year by Orange, with the launch of Orange Shots, which enables brands to engage with 100,000 customers from part of Orange’s ‘Monkey’ pay-as-you-go customer base.

Orange Shots works across SMS and MMS mobile platforms, encouraging customers to message back and give views and opinions. In addition to offers, customers also receive what Orange calls “a variety of benefits”, including exclusive news and gossip, amusing and entertaining content, film and games previews, and up-to-date sports information.

Orange adds that in trials, brands found that Orange Shots provided a higher conversion rate than any other media, offering response rates of between 21 and 39 per cent. Members have the opportunity to opt out at any stage, and Orange says the data will not be shared with third parties.

Orange says that it plans to make Orange Shots available to its entire mobile customer base over time, giving brands the opportunity to engage with a variety of specific demographic segments.

Core competence

Of course, mobile advertising is hardly a core competence for most mobile operators, so in most cases, the mobile ad solution is outsourced to a third party provider. Orange Shots runs on the Blyk platform that Orange bought in 2009.

In April 2010, Alcatel-Lucent launched its ‘Optism’ mobile advertising solution, a while-label offering that enables mobile operators to offer preference-based mobile advertising services to their subscribers on an opt-in basis. E+ in Germany and Orange Austria are already using the service. And in the past two weeks, mobile advertising firm Out There Media has helped operators in Malaysia and Russia launch similar services.

The Malaysian offering is from Maxis Berhad and is called ‘myDeals’. Brands signed up at launch include BMW, Malaysia Airlines, Colgate-Palmolive and Panasonic.

Maxis is inviting all its 12.7m subscribers, 6.4m of whom are mobile data users, to opt in to myDeals. Ads and offers will be delivered to users’ handsets, based on their profiles, interests and preferences. In return for agreeing to receive the ads, myDeals members will earn loyalty points that can be redeemed against Maxis products and services.

In Russia, Out There Media has helped Russian operator Vimpelcom to launch a mobile advertising offering to its Beeline-branded mobile network. The service is called ‘Be the First to Know’, and is open to mobile customers who supply demographic and lifestyle information about themselves. Ads will be sent via SMS, MMS and the mobile web.

Out There Media CEO Kerstin Trikalitis says that while some of the ads will be offer-based, many are simply traditional ads designed to raise awareness of a new product or service. She adds that within a week of the launch of the services in Malaysia and Russia, 3 per cent of each operator’s subscriber base had opted in to them, and says that Out There Media will be announcing several more operator deals in the coming weeks.

“Operators were very nervous about this sort of thing a couple of years ago, but they realise now that it is valuable inventory that advertisers are asking for, and that it’s a fantastic new revenue stream that they need,” says Trikalitis. “They would be stupid not to embrace it.”

This view is endorsed by Turkcell head of mobile marketing & advertising, Melis Turkmen, who estimates that mobile marketing revenues in Turkey will be $125m in 2010, and $260m in 2012, of which it will take a 69 per cent share. With figures like those, it’s no wonder that operators are embracing mobile advertising.