Commentary

Context Is Mobile's Cookie - O2's Lesson To Us All

O2 buying out its partners from Weve appears to be a move by the mobile phone network to take the 20m mobile users it can already advertise to and throwing in 10m O2 WiFi users. Swelling the ranks by 50% seems to make perfect sense. When you then consider that the one network missing from Weve's former ownership was 3 and that 3 is in the process of buying O2, there would appear to be room for more customers to be regularly reached. However, there is something happening here that is far bigger than having more people to send mobile ads and offers to. In a word -- or rather in two -- this appears to be a bold move to add more location, and thus context, to mobile marketing.

The problem with mobile advertising is a very simple one. Whereas digital display is expected, and mainly tolerated, on a PC or laptop, with mobile it tends to get in consumers' way a bit more and at the same time does not always appease advertisers either. Brands get tiny buttons that don't make much of an impact and on a small screen and so are overlooked by mobile users who find them to be a distraction rather than anything they want to engage with (not that less than 1% click-throughs on desktop display is anything much to write home about, but of course, the larger boxes do at least provide some branding).

In a way, mobile advertising is reminiscent of the old army joke about the soldiers fighting in the desert who are told there's good news and bad news. The bad news is they have run out of food and there is only sand to eat. The good news? There's lots of it. Just because we're at a tipping point of around about half of all Internet traffic coming from mobile devices does not necessarily mean the increased inventory for tiny banners and buttons will actually be of use to mobile users.

The root cause of the mismatch between inventory and interest is that the potential of mobile is rarely tapped into. It may not have a cookie, but it does generally know where it is and, from that, marketers can normally have a pretty good guess about the context of why someone is in a particular location. 

Beacon technology is nascent at the moment, but it's easy to believe O2 when it says that it believes the technology, coupled with currently available data from O2 WiFi logs in, will not only swell Weve's reach, but will provide valuable location and thereby, context on what the owner of the mobile device is up to and what messages they may be more receptive to.

These WiFi hotspots, which are open to the public, are in all the normal places -- shopping malls, waiting rooms, restaurants, coffee shops and bars. That gives the Weve network a far deeper glimpse into general data of what customers like to do and which brands they favour, but it also fires up opportunities to use their location next time they are in range to fire off more tailored advertising and offers. You can easily imagine a commuter who logs on WiFi at a train station being sent offers either by his or her usual coffee shop or perhaps a smart rival trying to woo customers to their doors. Mobile ads might flag up the latest bestseller, in case they need something to read, or a code to get a newspaper with a sandwich offer. Whatever might fit in with their location and the context of why they are there, you can rest assured apt offers will be made.

For that reason, one can imagine O2 will be doing a fair bit of advertising on Weve to encourage signups to Priority Moments to swell the ranks of customers it has permission to send regular offers to.

Without location and some analysis of context, mobile advertising can only work at a certain background level. However, throw in where the mobile is and work out some context of why and what the consumer might be open to receive offers for, and you suddenly have a far more proactive, engaging channel. In addition to adding its own WiFi users to the mix to increase the numbers of consumers it can reach, this corresponding act of pinning people down to a place and a potential intent will prove more useful than simply adding millions more to an ad network you can fire off more "stuff" to.

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