Mobile Advertising: The Next Big Thing Hasn’t Arrived (But It’s On Its Way) - Banners and 2D Codes - Newspaper Association of America: Advancing Newspaper Media for the 21st Century

Mobile Advertising: The Next Big Thing Hasn’t Arrived (But It’s On Its Way) - Banners and 2D Codes

By David LaFontaine

Part 1: Capabilities and Challenges | Part 2: Banners and 2D Codes | Part 3: Classifieds, Videos and Other Formats

Banner Ads – The Same Thing, But Different
At first glance, migrating advertising to the mobile platform looks easy. Take a banner ad from the Web site and stick it on the screen on the phone. Done, right?

Not so fast.

All kinds of considerations come into play when displaying ads on phone. These include:

Screen resolution – most often expressed as “screen width,” this refers to how many pixels wide the screen on the phone handset is.
Color depth – usually expressed as 8-bit, 16-bit, 24-bit; if you are old enough to remember the early days of computing, video screens could display 8 colors, then 64 colors, then 256, and finally, millions of colors. Same here.
File size – particularly crucial in mobile advertising, since phones typically don’t have the RAM and hard drive storage that computers do.
Phone processor speed– just like in computers, the speed here is constantly improving, which means that phones are starting to be able to render and display video.
Software/operating system on the phone – FlashLite, Microsoft Windows Mobile, Android, Apple’s iPhone OS
Functionality – clicking on the ad can cause a script to run that causes your phone make a phone call, launch an application or go to a browser page.

At first glance, the technical challenges seem daunting: handsets in the U.S. market have 31 different screen widths coupled with different color depths.

Selling Mobile Advertising

Confronted with the growing complexity of products and pricing structures, ad sales reps have to develop the skills of a multimedia consultant to do their jobs well.

“You can’t just launch a mobile platform, put up a couple of PowerPoint slides in an afternoon training session, and then toss it to your sales staff and expect it to happen,” says Doug Olsson, director of digital sales at Sandusky Newspapers. “Our view is that jumping directly from product introduction to a pedal-to-the-metal sales effort skips all the essential steps that need to be taken in between to legitimize the product.”

It’s easy to get lost in a sea of technological specifications and complex targeting algorithms when mapping out a mobile advertising strategy, and all the conflicting standards and options can induce an epic case of “analysis paralysis.” For this reason, experts recommend newspapers take a step back and consider the big picture before trying to monetize the mobile platform.

1. Build an Audience For Your Mobile Content
Considering all the pressure the newspaper industry is under to show positive results, it is certainly understandable that publishers will be eager to demonstrate that the new mobile distribution platform can be monetized. The danger is in pushing too hard, too soon.

“Look, you can’t sell ads against content that doesn’t exist yet,” says Susan Emmer, Director of Strategic Alliances at Western Interiors and Design magazine. “Like it or not, all those things we keep hearing about how we’re in an ‘attention economy’ are true.

“If you start cramming ads at the audience when they’re just getting used to looking for your content on this new platform, you’re going to turn them off.”

2. Change the Commission Structure
The entire advertising industry is still struggling with the issue of how to change the way it compensates and motivates the ad sales reps who are expected to pound the pavement, selling all these New Media products.

A big part of the challenge is creating a system by which the ad sales staff is rewarded for leaving their comfort zones.

“Unless there is some real, tangible benefit there, you re not going to get the sales reps on board,” said Emmer. (In other words, cash.)

“Raise the sales commissions, hold sales contests, whatever it takes.”

Newspapers may also want to experiment with allowing advertisers to buy space and time on their own as many small businesses have already learned how to use Google’s AdSense, eBay and CraigsList to market their products.

“[Sandusky Newspapers] sees that customers want direct communication, so we are going to work to provide self-service opportunities to them,” Olsson says. .“That does not preclude our sales staff from getting involved, because we’re never going to be 100 percent self-service, but it will be a significant factor in the success of the mobile platform.

3. Top Management Buy-In
Many experts foresee challenges – similar to those the newspaper industry experienced adapting to the Web – when it comes time to take the next step and move digital content to “the third screen.” The concern is that top managers, burned by the uneven returns on their investments in the Web, will adapt a too-cautious, wait-and-see approach to mobile, and once again have to play catch-up.

“The motivation to adopt new processes and practices first comes from readers and advertisers,” Emmer said. “They begin requesting Internet capabilities and content in ways that you can’t provide. But for any real transformation to occur, top management must believe that real change is necessary to survive.”

When top managers are knowledgeable about the mobile platform, they can make better decisions, allocating resources and refining timelines so that the newspaper is neither too far in front of the market (trying to sell a product for which there is no demand), or too far behind.

On closer inspection, however, we find that 91 percent of the handsets fall into four very simple, standard display widths. The Mobile Marketing Association’s Mobile Advertising Guidelines, last updated in October 2008, offers some standardization on the chaotic cell phone ad market (see sample chart below). The latest report is available through MMAGlobal.com.

There are a plethora of issues that arise because of the nature of the mobile display environment. For example, besides the cramped space, the Internet connection is still somewhat slow or problematic through many mobile networks. Therefore, mobile pages should be limited to no more than 10 images per page, so that the phone doesn’t have to make so many “roundtrips” to request, access and render data, which is just one of the things that can make mobile Web pages so maddeningly slow to load.

The MMA has also issued guidelines for what should happen when a user responds to an ad through its Code of Conduct for Mobile Marketing. “It is only through industry support of strong privacy guidelines that the power of mobile marketing can reach its full potential,” according to MMA. Essentially, the Code of Conduct attempts to ward off situations where unscrupulous advertisers send out unwanted messages, some of which could a user’s phone to dial numbers in foreign countries that rack up huge hidden charges on their phone bills, discourage “phishing” for passwords or financial information, or deter other “bad actors” just waiting to offer you millions locked in a Nigerian Prince’s frozen bank accounts.

BEYOND THE BANNER
Although the easiest migration path for newspapers looking to sell their existing advertisers the same thing on a different platform is banner ads, it is in an array of new ad products that the real growth opportunities abound. Most of these ad products are still in the very early stages of development, but the responses that experimenters have been getting are eye-popping.

“All these ad products and strategies are very new and mostly untried,” says Erica DeLorenzo, Senior Director, Industry Practices for the Internet Advertising Bureau. “We don’t want to stifle innovation by doing too much line-drawing, and it’s very early to start issuing definitive statements.

“The one thing we can say for sure is that advertisers and content creators both have to start thinking less in terms of mass reach – and more about targeting.”

Common Short Codes (CSCs)
Common Short Codes (CSCs) are a short series of numbers, usually five or six digits, to which a user can send a text message that will trigger a response message from an advertiser sending back information or content, or enter the user in a contest (the classic example being the FOX show American Idol, which encourages viewers to text “VOTE” to a number corresponding to their favorite contestant).

Such short codes are called “common” because the codes will work no matter what wireless carrier is used – an important feature, since an ad that only T-Mobile customers can respond to would miss and frustrate the rest of the market.

CSCs are an important step in the evolution of mobile advertising; they are more interactive and “engaging” than a simple banner, yet simple enough to deploy that they are usable by 205 million (out of a possible 213 million) mobile phone customers.

The rate of response to CSC ads is phenomenal. According to a study done by industry analysts M:Metrics, 36.6 million (or 17 percent) of cell phone users received an ad in 2007 and 3.7 million (or 12 percent) responded to that ad.

The reasons these numbers are so high are the focus of a growing controversy. Proponents say that the response rate is high because the greater and more accurate targeting of mobile ads makes them effective at reaching people at just the right time and place to influence their decision making. Detractors say it’s because users still regard mobile advertising as a curiosity, and that as the market gets flooded with other ads, users will start turning off and the numbers will fall in line with every other media outlet. (For more on setting up and running text message programs, see “SMS Programs: Potential in 160 Characters or Less.”)

Quick Response Codes

These printed checkerboard-looking codes were originally created by Denso-Wave in Japan in 1994 to track auto parts. They’ve been appearing in the U.S. on FedEx or Amazon.com packages and are spreading quickly.

“In Japan, these Quick Response (QR) codes have really taken off,” says Annenberg’s Ito, whose work can best be described as youth-culture technological anthropology. “In Tokyo, you run your phone over a sandwich, and it tells you not only how many calories are in the sandwich, but where the ingredients come from – which is a huge concern in that culture.

“In malls, stores have printed QR codes on the handrails of the escalators. When you point your phone at them, up pops a coupon for 20 percent off a haircut at the salon up on the third floor, along with photos of the latest haircuts. It’s amazing.”

QR codes work this way: Each code can contain up to 4,296 characters (or a string of 7,089 numbers). Users with cell phone cameras and the right software installed, can take a picture of the QR code, which causes the phone’s browser to launch and redirect to the URL contained in the code. The codes can appear on newspaper pages, signs, buses, business cards, or any object that you can print a decent-resolution image on. Although the technology is promising, many phones do not have the required software that allows camera phones to read QR codes. Google’s Android platform will reportedly include this software.

In San Francisco, ScanBuy partnered with Citysearch to produce QR codes that were placed in the windows of 580 restaurants. Customers with the ScanLife software on their phones can point their cameras at the code in the window to be automatically taken to a Citysearch review of the food and drinks available. Not to be outdone, Antenna Audio is putting QR codes at tourist attractions in San Francisco, where users can point their phones at the codes, and then are treated to an audio tour of the site, and an explanation of its history.

The technology to create a QR code is free and available on the Web at: http://www.viooli.com/qrcodegenerator/demo.php .

Google’s print newspaper ad program includes QR codes as an option. More information is available at http://www.google.com/adwords/printads/ads/barcode/.

Image-Recognition Advertising

Similar to QR, image-recognition advertising allows the reader to take a picture of an advertisement in a magazine, send that image to the publisher or advertiser, and in return get exclusive content (wallpaper, ringtones, coupons, etc.).

Men’s Health and Rolling Stone were the first print publications to take advantage of this new product. Created by SnapTell, the ads deliver the kind of “360-degree” ad campaigns that big advertisers increasingly demand.

“Static print advertisements now become a measurable, two-way communication with target consumers,” said Gautam Bhargava, CEO and co-founder of SnapTell.

This technology faces some initially daunting challenges – many cell phone cameras produce blurry, dim images; sending those images can be expensive or complicated; and, the computing power required to process and recognize those photos is not insignificant. But if the pilot projects start showing some traction in the marketplace, this could quickly become a key way for newspapers to leverage their existing print ad space to provide added value for both advertisers and readers.

Coupons
Touted as “the coupons that you never forget to take with you,” mobile coupon companies such as Cellfire and Xtra Mobile Coupons aim to replace cumbersome paper newspaper inserts and direct-mail ValuePacks. The mobile redemption rate of 5 percent has already attracted big advertisers like Hollywood Video, 1-800-Flowers, Sears, Virgin Music, SuperCuts, McDonalds and others to start experimenting with delivering coupons to mobile phones. The Tampa Bay Tribune (see case study) is one of the many newspapers experimenting in this space.

Proponents point to the way that mobile coupons, like QR codes, can deliver demographic information about the users, on top of motivating them to come to a store and make a purchase, and that the capability of mobile to deliver a coupon to the user exactly when and where it will do the most good, creates an immediate and personalized “call to action” that results in instant gratification (i.e. the aforementioned “Starbucks coupon that appears on your phone as you’re walking past the store”).

Juniper Research estimates that by 2011, about 3 billion mobile coupons will be redeemed for $7 billion in discounts. Research done by Michael Hanley at Ball State University shows two-thirds of college students (one of the most hard to reach and eagerly pursued demographics) are willing to change their behaviors if they have coupon incentives. The list of coupons they are most eager to use contains at least one real surprise:

Sit-down restaurants (because although they may be broke, they’re still hungry)
Movies (for dates or entertainment)
Dry cleaning (because sometimes mom just isn’t available)

The mobile advertising start-up Dizgo is testing a combined mobile search and discounting program in Boulder, Colo. Restaurants and stores in local malls can choose keywords that they want associated with their products, such as “sushi,” “Italian,” or “Latte.” Users who then send text messages that correspond to these keywords receive coupons and specials from restaurants that are near that user’s current location (as determined by cell zone or GPS).

Consumers can also sign up to receive news alerts when their favorite store, restaurant or bar is having a sale or special offer. The system requires the user to read aloud to a clerk the code that is sent.

This brings into sharp focus the major snag with mobile coupons: because the coupon bar code appears on a phone’s LCD screen, many older laser barcode readers are unable to process the information.

“The truth is that you can count on one hand the number of big retailers who have systems in place to take advantage of mobile coupons,” says Placecast CEO Anne Bezancon. “In the foreseeable future, franchise owners and mom and pop stores down at the local level are not going to have a lot of love for the idea of tearing out their existing expensive point of sale equipment just so they can read coupons on mobile phones.

“Technological attrition will eventually take care of this, but this is not going to be an overnight revolution.”

Part 1: Capabilities and Challenges | Part 2: Banners and 2D Codes | Part 3: Classifieds, Videos and Other Formats

First Published:
July 31, 2008

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