Mobile Targeting: Ready to Get Serious In 2007

by Phil Leggiere, Aug 25, 2006, 2:30 PM

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By nearly all accounts, mobile advertising looms large as the next big frontier of online media. One nagging obstacle in the growth of the industry so far, however, has been the lack of targeting capability offered to advertisers. In his discussion below, Tom Burgess, CEO of Third Screen, the largest mobile ad network, explains why the menu of mobile behavioral and other targeting options is about to expand dramatically.

Behavioral Insider: When we spoke last--about six months ago--targeting for mobile advertising remained in its nascent phase. What's changed since then?

Burgess: We see the industry as being at a critical threshold. Specifically, we see 4Q06 and 1Q07 as a time when advertisers will, for the first time, be able to track unique users. Carriers never had a reason to track user behavior except for billing purposes. Over the past month or two, there's been the beginning of what feels like a sea change. We now are seeing tier-one carriers ready to leverage unique user ID data to collect information about content usage... by unique user number. So for the first time [there's] data about exactly where and how mobile users are spending their time, information carriers have had but never aggregated in advertiser-friendly form. If you're tracking by unique user ID, you now know when and where you're reaching a specific consumer, so can begin to use frequency caps so advertisers can better target timing and avoid extraneous placements.

BI: So the big carriers have ramped up their commitment to opening up more aggregated data?

Burgess: It remains a sensitive area. But now we see carriers recognizing the value proposition of data collection for targeting to all stakeholders, advertisers, publishers and consumers. Of course carriers are being very careful about how this data will be used-- but I can tell you two of the biggest carriers are introducing platforms to make this possible as early as next quarter.

BI: Where do you see mobile targeting going once this building block is in place?

Burgess: The next step--which is more gradual--is to integrate more and more information about age, gender and income to relate to behavior. This will entail the evolution of a more opt-in-oriented model, where it's transparent to consumers how their data will be used, but the motivation is there to make that happen. We see it as coming online by mid-2007. What will enable that is the development of widely accepted industry privacy standards. Over the past six months a lot of progress has been made in that area. There will be some high-profile initiatives launched by about the middle of next year.

BI: What kinds of targeting does that promise to open up?

Burgess: The key thing we'll be able to add is a layer of demographic information by age and income range. I don't expect we'll be able to say user 123 makes x amount of money and is 34 years old. But by identifying user 123 by zip code, carrier and device type, you take a big step in homing in on a particular demographic range, and building a consumer profile combining demographic and behavioral info by device type and carrier. Advertisers are already becoming increasingly interested in tracking the impact of their campaigns by device and carrier. With brands now executing six-figure campaigns, they want to develop more customized metrics. One business-to-business technology company wanted to reach executives, so they bought space at quality news and financial publishers. They got good click-through rates, but wanted to know how the campaign performed in a wide variety of ways, such as where click-throughs came from by devices and carriers.

BI: What else do you see on the horizon?

Burgess: There are approaches to behavioral targeting that are going to encompass actual physical location. What's going to happen once GPS-chip handsets are out is that an advertiser can target a consumer based on where they are with their mobile handset. So you can reach a consumer when you know they are approaching, say, a McDonald's or a shoe store at the mall.

BI: What targeting potential do you see for mobile search?

Burgess: Search will have a different feel in mobile than in online. People will use it differently. It's doubtful, for instance that people will surf and roam around as freely as they do searching from a computer. It's more of an on-the-fly experience, where they want something very specific right now. We expect tier-one carriers to work out deals with search providers to introduce search capability and features to enhance customer experience and increase content relevancy. When they do--and I know several are looking hard at rolling out offerings in this area--I wouldn't assume it will just be the same powers-that-be online: Google, Yahoo or MSN.

There are upstarts out there who are specializing in this niche space who may become the big names of 2008. InfoSpace has been working on some interesting innovations specifically for search in a mobile environment. And Medio Systems has developed search applications that eliminate linking--and instead return personalized answers to queries based on subscriber preference, location, device and other criteria. Because mobile users by definition are on the move, they want and need more immediately relevant and actionable information, which will create very robust targeting opportunities.  

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