The Mobile Challenge: Scaling The Silos
Behavioral Insider: A few months ago, when we spoke last, mobile targeting generally -- and behavioral data in particular -- was only barely on the radar screen. But now it's getting lots of attention. Do you think the speculation is getting out in front of the reality?
Tom Burgess: A lot of pundits love to speculate about what mobile advertising will be capable of doing. It's a temptation; I have too. But in the real world, what's really happening is, we're still in the early stages as far as mobile targeting [goes]. That said, there have been very important moves forward in the few months since we spoke.
BI: Where do you see the status of mobile targeting in the real world right now?
Burgess: We've moved in an evolutionary manner from run-of-network to aggregating content by channel. Where it's gone in the past several months is being able to target using all that plus transactional activity and a demographic profile by site and carrier. What we can do right now is combine that increasing amounts of carrier data with third-party data collected on mobile subscribers and their usage patterns, who they are and where they go. So there's been a lot of progress over the past six months in moving from strictly handset, carrier and content targeting to encompassing more and more demographic and behavioral data on transactions.
BI: What is the current challenge in ramping up more targeted campaigns?
Burgess: Once you start adding those data points the challenge is that, even if you have all sorts of behavioral detail and deeply rich demographic profiles to combine with them, it doesn't make that much difference to a large advertiser. Not when you're only talking about a universe of 2 or 3 million impressions. The problem is that for big advertisers testing mobile up till now, the reach available hasn't really warranted the cost of targeting.
BI: Can you elaborate?
Burgess: The tradeoff that mobile advertisers have had to accept, and it's been kind of a Catch-22, is that the more targeting capability that comes in on mobile, the smaller the reach, because there's been such a limited universe of targetable users. If you start with an entire universe of just five or 10 million people a month and start narrowing that down, soon you're down to a target of a million or two. Scale comes when you can extend reach across the silos of individual carriers and publishers. When you have tens and hundreds of millions of transactions across multiple carriers, all of a sudden really scaled targeting becomes worthwhile.
BI: So now that more user data is forthcoming from individual carriers, publishers' campaigns can be targeted across the whole gamut of the mobile Web, rather than just based on the information from a single carrier?
Burgess: Yes. What's also happened in the past six months is that now the ad inventory is expanding. We're growing inventory at over 20% month after month. So once you get to the point where you're aggregating data from multiple carriers and publishers, that's a decisive step beyond the silos mobile user data has been stuck in.
BI: Are advertisers currently deploying mobile Web-wide targeting?
Burgess: It's still a very small group, but yes. There are currently four mass scale campaigns going on that are deploying aggregated data across all carrier platforms and multiple types of mobile ad units, text, graphical, video. By the way, these are million-dollar-plus campaigns, which marks a big threshold for our industry.
BI: What role does mobile search data have currently in targeting, and where do you see mobile search going this year?
Burgess: At this point search data is not integrated very well into wider targeting, because in the architecture of mobile right now the carrier is more like a cable MSO than an online ISP. When and how search will impact the mobile ad and marketing mix is not yet clear, but I expect a lot of solidification in this area soon. On its own, search data is just a silo -- but when you combine it with carrier data, you're a step closer to Nirvana. When the models for search are ironed out, and they will be, search will provide yet another important piece of the puzzle.
BI: Looking at the mobile space more broadly, it seems like there's been progress toward opening up the silos separating carriers, publishers and WAP sites, at least to some degree. But also there remain a lot of turf wars, such as between the carriers and some of the traditional Web portals.
Burgess: It's healthy in any emerging eco-system to have lots of competition and maneuvering for dominant position, and we currently have that. But the other thing thriving eco-systems need is cooperation, and that's only beginning to jell in a big way. Today we still tend to think of mobile in terms of what we're used to with online advertising and its evolution. But there will be plenty of surprises ahead.