Mobile Targeting: Still A Work In Progress
Though it still has its naysayers, mobile advertising so far this year has succeeded both in radically expanding its scalability and, as the recent acquisition of Third Screen Media by Time Warner AOL shows, galvanizing the serious interest of the biggest players in the online space. As a critical mass of consumers, content and ad inventory move onto the mobile Web, the next, still daunting challenge, as Brian Stoller, vice president of marketing at Third Screen discusses below, is evolving effective mobile-friendly modes of enhanced targeting.
Behavioral Insider: How has the mobile space progressed since we last spoke about six months ago? What does the fact that Third Screen was acquired by Time Warner augur?
Brian Stoller: Mobile's scale is building, and the place of mobile in the total media mix is becoming more integral. Certainly what's occurred with us in becoming part of AOL is a part of that process. You may have heard about AOL's announcement on what they call their Platform A collection of ad networks, and their related announcement at Ad: Tech about building in a new generation of ad serving capability which can deliver both mobile and video. This is an indication about the kind of seriousness about mobile that wouldn't have been the case before. And all of the major online players are advancing similar moves.
Advertisers are also significantly scaling up. Two years ago, the average six-week campaign went for $10,000 to $20,000. Last year it was up over $30 thousand. This year it's at about a $100 thousand average. We've also more than tripled the number of total impressions from 200 million to 780 million. So unlike the past when every year people would say 'Next year will be mobile's year,' we think 2007 HAS been mobile's year to cross the threshold from novelty to serious strategic platform.
BI: Has the capacity for bringing advanced targeting to mobile evolved as quickly as you expected this year?
Stoller: Targeting remains primarily focused on content at this point. We've been moving as an industry toward some sort of breakthrough into demographic targeting. But that impetus honestly is now moving forward at a pace controlled by the carriers' lawyers. The issue is what sorts of legal privacy standards are going to apply to deployment of DMA household data information. The question is how carriers can guarantee transparency and consent by mobile phone users. That will entail additions to standard user contracts that include full disclosure that demographic information may be used by third parties.
I believe the conclusion of the marketplace at this point is that DMA data will be accessible in aggregate as long as it doesn't identify unique users. The realistic longer term prospects for behavioral targeting revolve around finding an effective equivalent of Web cookies that are being deployed and are very temporary in nature. So we do not see cross-site targeting until there's a major upgrade in handset browsers widely available. We are seeing an increase in behavioral targeting between sites that have user names and passwords. Audiences at those sites can be tracked at the server side.
BI: What about location-based targeting?
Stoller: We see additional layers of targeting as being on the horizon but not for awhile. GPS-location-based targeting is getting close to clearing its technical hurdles, but the question is first how to establish an opt-in model to alleviate privacy concerns, which seems achievable, and then more to the point, [to address the question of] what the value and role of a truly location-based targeting is. You may know I'm on the corner of 40th st. and 7th Avenue right now, but how important is that exactly to an advertiser? For a national brand, not necessarily. As we expand the categories of advertisers, maybe.
BI: What role is mobile search playing or will it play?
Stoller: There needs to be consolidation in search. That's one of the areas that's inhibiting expansion of the user base off-deck. With each carrier attempting to feature white-label solutions of their own, it leads to unnecessary fragmentation. One of the most interesting things I've heard recently was from someone who told me that at a certain carrier the number-one search term was 'Google.' So consumers are still trying to find Google in the mobile space. We're early on, but that shows also how much opportunity advertisers have if they can bring their content and then have the approximately 32 million Americans now on the mobile Web access off-deck destinations more readily.
BI: Has the role of carriers changed vis a vis publishers?
Stoller: The big thing that's changed over the past six months is that publishers are now really pushing carriers to allow them off-deck. There's been an impasse till now in which carriers have kept advertising mostly on their deck in their control. But publishers are now saying 'we are not getting the value we need by limiting our exposure to just your on-deck content and having to pay large percentages of ad revenues.' In order for carriers to increase the amount of their customer's spending on mobile data, they are going to need to give publishers more space off-deck to build out their mobile Web presence and expand ad inventory.
BI: How might that affect the introduction of more targeting?
Stoller: What's very interesting, when you look at the 32 million or so who are now using the mobile Web, is that compared to early online users a dozen years ago, it's such a diverse group. When online's penetration was about 10%, it was skewed overwhelmingly to younger, male, tech-savvy early adopters. In the mobile space already it's really a catchall of many different groups, mobile Moms, teens, business professionals, and a wider ethnic mix. It's a very fragmented audience. This means that targeting issues that until now have been more theoretical will quickly increase in importance. I see the DMA targeting as moving to top priority in the next few months. Freeing up the data to target that is the next big push.