Mobile Marketing Challenges Dissertation

Abstract

The mobile advertising industry is a sleeping giant, awaiting the opportunity to awake from its slumber and revolutionise the way the consumer receives advertising. With over half the world’s population owning a mobile phone, its potential as an advertising medium has yet to be exploited. By utilising a foundation of primary research, accompanied by press releases and industry contact from the past 18 months, this paper explores the challenges that face the industry as it attempts to become the world’s first personalised mass media, and how the various stakeholders can work together to launch this potential £multi-billion advertising solution. The conclusion recognises that advertiser attitudes, technological developments and available content all need to be reassessed if the industry is to be a success, with the consumers behaviour towards mobile advertising an issue that can be overcome by establishing trust. This trust can be created using permission based or incentives based advertising. The conclusion declares that if the industry works together towards the common goal of overcoming these obstacles, then mobile advertising can become and exciting and successful industry.

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Acknowledgements

This research would not have been possible without the support of my father, and mentor, James Martin, Director of JMS Digital Media.

A special mention must also go to Clare Chambers for offering her time, support and contacts from the industry for the successful development of this research.

Thanks to Mik Parsons and the various members of Bournemouth University Staff who provided me with new angles, great contacts and superb research facility.

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Contents

1.1 Introduction – An Overview ……………………………………………………..5 1.2 Introduction – Methodology ……………………………………………………..7 1.2.1 Research Questions ………………………………………………………7 1.2.2 Research Approach ………………………………………………………8 1.2.3 Trustworthiness of the data …………………………………..………….10 2.1 The Market Today – Background ………..…………………………………….10 2.1.1 Advertising Today …………………………………………….………...10 2.1.2 Mobile Today …………………………………………………..……….12 2.1.3 Mobile Advertising Today ………………………………………………..14 2.2 The Market Today – Consumer Attitudes and Behaviour ……………………..15 2.2.1 Insight ……………………………………………………..……………15 2.2.2 Analysis ………………………………………………………..………..16 3.1 Developing Mobile Advertising – Technology …………………………………19 3.1.1 Keeping Up with the Pace: Improving Network Technology ……..…………19 3.1.2 Small Changes, Big Difference: Handset Development ………………..……21 3.2 Developing Mobile Advertising – Advertiser Attitudes ………………………...24 3.2.1 The Negative View ……………………………………………………….24 3.2.2 The Agencies Role …………………………………………………………25 3.3 Developing Mobile Advertising – Content ……………………………………..28 3.3.1 Relating to the Consumer ………………………………………….………28 3.3.2 Case Study – Greystripe changes the Games Downloads Model ………………28 3.3.3 Summary …………………………………………………………….……30 3.4 Developing Mobile Advertising - Consumer Acceptance ………………………30 3.4.1 The Importance of the Consumer ……………………………………………30 -3-

3.4.2 Forms of Mobile Advertising …………………………………………...31 4.1 The Future – Who is doing what? ……………………………………….……..32 4.1.1 What they have been waiting for………………………………………..32 4.1.2 Case Study – Blyk – The Next Generation Network ………….…………34 4.1.3 Mobile Advertising Partnerships……………………………….………..36 5.1 Conclusion ………………………………………………………………………39 Bibliography ………………………………………………………………………...42 Appendices …………………………………………………………………………..46

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What are the challenges that face mobile advertising in the United Kingdom, in order for it to become a £multi-billion industry?

1.1 Introduction – An Overview

Advertising agencies in today’s society are facing an increasingly difficult task in producing advertising campaigns that not only satisfy the client’s criteria, but fulfil the targeted consumer’s needs. Advertisements are scrutinised by consumers and standards authorities such as the ASA for a broad range of reasons; everything from deceiving the consumer, to intruding a consumer’s personal space, however the agencies quest to satisfy the consumer remains the definitive goal. One criticism directed at larger, established brands is that they employ the same advertising technique to target a broad demographic. The brand attempts to impose the ideals of one group of consumers upon another entirely different group, simply to save the brand cashing out on multiple campaigns to suit its different target audiences. The modern day consumer however craves personalisation and individual recognition. They expect advertising campaigns to have a substantial emotional impact upon them as an individual in order to motivate a purchase or use of the product. For big brands such as Coca Cola, Ford and McDonalds, advertising budgets are used to increase brand awareness. Campaigns can include solutions that re-enforce the brands morals, or simply get people talking. Cadburys produced a fine example of brand awareness marketing in 2007 when it released its advertisement ‘Gorilla’. The advertisement featured what was believed to be just a normal Gorilla, however as the advert progresses, the Gorilla shows some human characteristics before finally breaking out into playing the drums.

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“Gorilla, which broke last September, was one of the iconic ads of 2007, and whilst it was on air, weekly sales of Dairy Milk increased by 9 per cent” (Dutta 2008). “There was even a happy spin-off for Phil Collins. After the launch of the commercial which featured his 1981 single ‘In The Air Tonight’, the hit reached no 9 in the UK download chart” (Smithers 2007).

For the smaller businesses however, much of their advertising budget is spent on direct response advertising, such as mail-shots, point of sale or window promotions. Because of a potentially limited consumer base, restricted due to its niche product range or dependence on local consumers, these businesses are inclined to utilise advertising that they can measure. None of these campaign styles however has the ability to relate to the consumer on a personal level. Internet advertising is one of the current front running advertising methods, and campaigns are often personalised to a degree, however limitations posed by privacy issues on the World Wide Web means advertisers are restricted to what information they can obtain about individual consumers.

Marketing wizards are beginning to question the future of our recognised advertising channels , with TV budgets under pressure partly driven by the ability for consumers to ‘opt-out’ of the commercial breaks using new recording technologies, and partly driven by the worldwide web. Press and radio advertising is also in rapid decline and so mobile advertising is tipped to be the next big thing.

Mobile Advertising is a relatively young industry, however it has the potential to revolutionise the way consumers receive and respond to advertising. The mobile phone has been transformed from a simple communication device into, in many cases, small handheld computers. Steve Ballmer, the Head of Microsoft’s Mobile division, believes that the mobile -6-

phone “has usurped the power of the computer as the ‘remote control of our lives’, with people substituting power for portability” (Ballmer 2007cited Fried 2007). Ballmer believes that the mobile manufacturing industry will want “to create universal devices that anyone in the world can use for personal and business use, empowering individuals with optimum messaging, gaming and office abilities” (Ballmer 2007 cited Fried 2007). With the mobile phone developing in such a fashion, it is only a matter of time before brands accelerate their plans to exploit its potential as a serious advertising media. The future potential of mobile advertising however, is restricted on several levels. The limitations posed by current technology, advertisers attitudes – both agency and client side, the availability of effective content, and consumers behaviour towards mobile advertising means that radical changes are required if it is to achieve credibility as an advertising channel and the ability to develop a £multi million industry.

1.2 Introduction – Methodology

1.2.1 Research Questions

With consideration to my previous reading, overview, and established background of the topic, this research proposes to present an insight into the current state of the mobile advertising market, before analysing what is required to develop a future for the industry, then finally presenting potential developments that will shape the future of mobile advertising. The following are my main research questions:

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What are the current challenges that face mobile advertising in the United Kingdom? -7-

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What technological developments have impacted upon current advertising and mobile advertising technique?

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Who are the key players within the industry, and to what extent do they dictate the direction pursued by mobile advertising?

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What are the plans made to develop the content and measurement capabilities of mobile advertising?

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What evidence is there to suggest that consumers will be receptive to advertising via mobile phones?

The ultimate aim will be to determine how manufacturers, advertising agencies and advertising brands can work together to create advertising platforms that can establish new customers, whilst maintaining brand loyalty, and yet still provide the modern consumer with a quality personalised advertising experience.

1.2.2 Research Approach

This investigation will be based upon research contracted from the four sectors of the industry: manufacturers 1 , advertising agencies 2 , advertising brands 3 and consumers. Consumer information will be gathered from a range of reliable sources that accurately reflect the specific markets in question. This will include quantitative research gathered from a series of web based surveys and face to face questionnaires, to give a statistical analysis and a direct yet structured insight into the views of the modern day consumer. This 1

Manufacturers will entail handset manufacturers, network operators and mobile phone accessories manufacturers for the purpose of this investigation 2 Advertising agencies will often be addressed as ‘advertisers’ for the purpose of this investigation 3 Advertising brands will often be addressed as ‘brands’ or ‘clients’ through this investigation, in order to discern a difference between themselves and advertising agencies

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is a fundamental requirement as part of this research, because although there are many examples of accessible quantitative research, many are based outside of the UK and would therefore give an erroneous representation of an audience from a diverse culture and demographic.

Manufacturer’s plans will sourced from a scope of press releases covering the past 18 months, and will be further supported through bespoke research, which will comprise of interviews with representatives from a range of manufacturers and developers. Direct interviews are a vital part of the primary research, as they provide a direct insight into the industry in question, whilst providing a high degree of reliability in the information derived. Facts, figures, trends and insights gathered from advertisers and brands that use mobile advertising will be assembled from a series of journals and reports and will be utilised to gauge the success of mobile as a method for targeting consumers.

The United Kingdom is currently at the forefront of mobile usage, and therefore is the specific region that will be addressed throughout. This document will address case studies that involve UK based sectors of the industry, whilst also examining data from abroad, in regions such as the US and China. By examining information from outside of the UK, the strengths and weaknesses of mobile marketing in different cultures will become clear, and therefore create an understanding of the most appropriate way to deploy mobile marketing in the UK.

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1.2.3 Trustworthiness of the data

The broad range of material collated for this research comes from a variety of sources, and although whilst every effort has been made to cross check and validate these findings, the accuracy of some of the material cannot be guaranteed. The majority of opinions formed within this research will however, be taken directly from a source (primary research e.g. interviews), which will provide credibility and dependability to the information. However, many of the interviews with key figures have been collected from specialist websites that are in direct connection with the industry, and although the reliability of these sites may be questioned, the reputation of such sites provides sufficient backing for the information to be trusted. The final conclusion shall be drawn by myself, the author, and will be derived from all the data and information collected.

2.1 The Market Today – Background

2.1.1 Advertising Today Advertising is a thriving and fast paced industry, with durable goods, non durable goods and service industries all relying on it to promote and market their product. Research firm Informa Telecoms and Media states that “a total of $450 billion is spent on advertising in total worldwide” (Anon(a) 2007). This figure is based upon the four main traditional pillars of advertising; TV, radio, print and billboard. However, “$24 billion of this figure is based around the latest advertising trend; Internet advertising” (Anon(a) 2007). “Overall UK media spend increased 4% in the year to March 31 2007 thanks to strong growth in press, direct media and internet display advertising budgets” (Sandison 2007). Internet - 10 -

display advertising grew by 9% according to reports by Thomson Intermedia in its March 07 Media spend estimates. According to the researcher, the “12 months to March 31 2007 show an ‘expected’ slowdown on the dramatic growth seen across 2005 and 2006 as the internet grew up as a media” (Sandison 2007). Market observers are forecasting “total internet ad spend growth of around 25% year on year” (Sandison 2007). Use of standard display formats is still growing but, increasingly, “brand advertisers expect more engaging ways of holding a dialogue with consumers” (Sandison 2007) and although internet advertising offers media rich, interactive content, it is weak in comparison to the potential for mobile advertising, which, as a media, can target consumers at any point during their media consumption day, with advertising tailored to suit them personally. Advertising has begun to establish itself in every possible scenario in which it can be noticed, with agencies beginning to specialise in specific advertising forms. This is part of the advertising industries quest to uncover the next big thing with many new advertising methods addressing even the most niche markets. “The rising popularity of online gaming has been mirrored by a surge in in-game advertising. With gamers around the world pitting their wits against each other online, it is now possible for ads to be tailored to individuals” (Murphy 2008). The speed and quality provided by next generation games consoles such as the Playstation 3 has opened up online gaming to the masses, making it easier and safer than ever to battle it out in multi-player games. With this broadening range of users now taking up online gaming, advertisers have wasted little time in experimenting with ways in which to personally target these consumers. “While football videogames have long featured ads on billboards around the perimeter of the pitch, now targeted ads can be served. These can be tailored by a user's geographic location and demographic profile, offering advertisers the chance to access a unique target audience” (Murphy 2008). - 11 -

Advertising is no longer built upon the foundation of TV, press, radio and billboard. The opportunity created by the internet and the potential of the mobile medium means that advertisers are now exploring the ways in which to create campaigns that embrace specific technologies for part of, or even whole campaigns.

2.1.2 Mobile Today

Figure 1. The Nokia N95

Figure 2. The Apple iPhone

Mobile phones have become an integral part of the human way of life for the past 20 years and can only become more important in the future. The number of people with mobile phones in Europe is a substantial percentage of the population of the region, and many of those with mobile phones also have digital TV and broadband Internet. The take up growth between 2000 and 2004 in Europe was 154.6% (Boretos, 2005), with mobile - 12 -

phones becoming more accessible to those with lower incomes, as well as being made easier to use by those unfamiliar with technology. As the number of user accounts in Europe is now optimised, the growth in numbers has begun to slowly decrease, before eventually levelling out, as everyone but the very young (under 13) and the very old (over 70) will have a mobile account. Despite this growth pattern, the desire for the latest gadgetry and technology means that consumers will always want a new handset, with most operators offering upgrades every 12 months. The latest mobiles bring with them new ways of communicating, playing games and surfing the web, which in turn, has provided advertisers with new opportunities to target consumers.

The Nokia N95 (Fig.1) and the Apple iPhone (Fig.2) were both launched in the United Kingdom in 2007. These highly anticipated technological advances excelled the potential of mobile phones by including an array of technology that had previously only been used in personal computers. The Nokia N95 was launched in March 2007 and its launching advertising campaign ran with the tagline ‘what computers have become’. Despite early problems with the phones system memory, it still proved immensely successful, with over 1 million units being sold in 2007. However, the greatest hype was generated by the arrival of Apple’s first ever phone, the iPhone. Its touch screen capabilities, accelerometer technology 4 , proximity sensor in the ear piece 5 and its desirable appearance appealed to a broad audience, whereas it’s potential as a mobile phone and computer appealed to businessmen and women everywhere. In the end, it was “the i-factor - that Apple design flair and sheer usability which made the iPod such a big hit” (Cellan-Jones 2007) that made the iPhone the must have gadget of 2007. Despite issues with its cost and 4

which allows the content to adjust to portrait or landscape, dependent upon how you hold the phone which turns off the screen light during a phone call to save power as well as preventing accidental touches of the screen when close to the users face

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network charges, the take up rate was astonishing, with around 250,000 units sold in its first 3 months.

2.1.3 Mobile Advertising Today

Both the iPhone and N95 possess WLAN and GPS capabilities, which enables advertisers to target the owners in a whole new fashion, but despite this, advertisers are still sticking with the tried and tested methods of mobile advertising, such as MMS and SMS messages, and text banners on WAP mobile websites. Examples of such current mobile marketing techniques are easy to find and although not suited for everything, when used appropriately they can be very successful. For example, “it (mobile advertising) works well for awareness and branding. Around Christmas time 2006, AKQA created a very effective campaign for Coke called “The Greatest Gift is Giving”. It only ran on the 3UK portal for 12 hours, but over 120,000 people sent branded Coca-Cola Christmas cards to their friends. That is certainly brand-building” (Rosen 2007). Other examples of simple mobile marketing campaigns include text-to-win, which despite being relatively basic, still achieve huge numbers of response. “In the UK, consumer expenditure on SMS direct marketing reached 58 million messages per day in 2004” (Trappey and Woodside, 2005). On a basic level, mobile advertising has had some proven (albeit limited) success, however for the industry to truly ignite, there are challenges that must be addressed and overcome. New methods will challenge the traditional ways in which consumers receive advertising, and are likely to receive a mixed response. Ultimately, the success of the mobile advertising industry relies upon the consumer accepting and appreciating advertising as part of their standard media consumption day. This means that manufacturers and advertisers will be - 14 -

required to work together to create solutions that the consumer will be willing to accept, but will also be driven to respond.

2.2 The Market Today – Consumer Attitudes and Behaviour

2.2.1 Insight

The modern consumer has become incredibly high maintenance, and is demanding greater benefits from the products they buy and services they use.

For brands and

advertisers, meeting these demands requires time and effort spent on market research and consumer profiling. Every consumer is different, and although a large proportion may respond positively to one campaign, a section of this number may also respond negatively to another. Mobile advertising has the power to connect individual consumers and their interests, but this requires a greater understanding of the way the consumer thinks. A consumer’s attitude towards receiving advertising, and their behaviour after receiving it, can provide a strong indication of the way the proposed market will react to different advertising techniques and practices. To establish a further understanding of the modern consumer, and their attitudes towards mobile advertising, this research is supported by a survey of 100 people, who all completed an online survey in direct relation to the subject topic.

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2.2.2 Analysis

Although some earlier literature reported positive attitudes toward advertising, most of the more recent researchers have found that consumers generally have negative attitudes toward advertising in general. A survey carried out by Mehta (2000) found that ‘while 45% of the respondents felt advertising kept them up-to-date about products and services in the marketplace, 40% of respondents also believed products did not perform as well as advertisements claimed. Similarly, although 37% of readers enjoy looking at advertising, 37% also felt much of advertising is annoying and more manipulative than informative’ (Fig3). This research addresses the direct form of advertising, often known as the ‘push’ technique, which is considered to be invasive; and in these results, consumers will have been receiving advertising for products and services that neither want nor recognise. According to Mullman (2006), “as many as 81 percent of 18- to 21-year-olds have mobile phones, and most of them are likely to participate in TV or radio polls, purchase ring tones, play games, and send text messages”. Although not obvious, these are all subliminal advertising techniques used to raise awareness of music artists or a TV show, or simply promote a brand name. Consumers, without actually realising, are opting in to receive or respond to advertising in a covert form. When consumers recognise a physical 6 or social 7 benefit from advertising, they are more than likely to be prepared to opt in to receive advertising more freely. This view is supported by a study that was carried out by Tsang, Ho and Liang (2004), which concluded that consumer “attitudes were favourable if advertisements were sent with permission. This implies that permission-based advertising may become a major mechanism in the mobile environment in the future”. In the bespoke 6

Downloading content such as ringtones or games for their mobile handset, to improve its functionality or suit it to their tastes 7 Participating in a vote as part of a reality TV show to make them feel an active viewer or participant

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survey (see Appendix 1) conducted as part of this research, 73% of people indicated that the main motivation for purchasing a particular mobile was not for the latest gadgetry (10%), ease of use (11%) or a distinguishing factor in relation to the handset itself, but for the cheap calls and texts package that accompanied it. The opportunity to engage the consumer by exchanging advertising for free calls or minutes is available, and 41% of people indicated that they would be willing to opt in to such a service. The consumer will always seek to benefit themselves and enhance the service they receive, so attempting to negotiate without providing a substantial benefit will not suffice.

Fig3: ATTITUDES TOWARD ADVERTISING IN GENERAL Agree (%)

Attitudes toward Advertising* Neutral Disagree (%) (%)

Statements Totala Advertising helps me keep up-to-date about products and services that I need 45 46 9 100 or would like to have. Too many products do not perform 40 52 8 100 as well as the ads claim. Advertising is more manipulative 37 52 11 100 than it is informative. Much of advertising is way too 37 49 14 100 annoying. I like to look at advertising. 37 46 17 100 On average, brands that are 21 55 24 100 advertised are better in quality than brands that are not advertised. *Range: 0 to 10 where 10 is 'Agree Strongly' and 0 is 'Disagree Strongly'; Agree = 8—10; Neutral = 4—7; Disagree = 0—3. a Base size 1,914 for all statements except as noted. b Base size 1,046. c

Base size 853.

According to the survey (see Appendix 1), the majority 36% of people are not overly enthused by advertising in general; however appreciate an entertaining/funny/well produced advertisement. As demonstrated by the earlier case study involving Cadburys, an advert that can entertain can often be more successful than that which informs. As well as boosting sales, the advertisement spawned an array of groups on social networking site Facebook, with well over 9000 members between them, as well as “receiving over 500,000 hits on YouTube the week after it was released” (Sandison 2007). This could provide the - 17 -

key to the success of mobile advertising, by embracing the notion that customers need to be drawn in first, before following up or telling them more about the product. In fact, the survey (See Appendix 1) showed that 23% of people saw advertising in general as a great way to learn about new brands. In light of this, launching a brand or product by using mobile advertising could prove successful if it employs an entertaining technique in order to establish an initial interest. The survey also showed that 66% of people actually read adverts that they received on their mobile phone, with just over 75% of this figure deleting the advert after they have received it. It also indicated that 34% of people deleted the advertisement without even reading it. The findings of this survey demonstrate that although mobile advertising can be a successful advertising method, current technique using the ‘push’ method is proving to only put consumers off mobile advertising, with the survey indicating that 29% of people would rather receive no advertising on their mobile as they see it as a personal device. The consumer plays a very important role in the mobile advertising industry, as all sectors of the industry are influenced by what the consumer thinks, wants and does. One of the major challenges that the industry faces is to overcome the negative attitude towards mobile advertising by consumers, and to create effective business plans and methods that can help overcome this. The consumer’s attitude is just one of several challenges that face the mobile advertising industry, and by identifying the impact these challenges have, the industry can prepare to overcome them.

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3.1 Developing Mobile Advertising – Technology

3.1.1 Keeping Up with the Pace: Improving Network Technology

Figure 4. Handset capabilities and handset capabilities used, 2007

The technology installed on, or used to power mobile handsets is vitally important for the development and maintenance of the mobile infrastructure. “Many of the features offered by phones such as Internet/WAP, watching live TV and email have yet to take off. Current limitations in the ability to surf the Web or view live programmes may well explain the current lack of interest, although this is expected to change as new technology and price plans roll out” (Anon(b) 2007). Despite having access to the technology, many consumers are not actively utilising them. For example, in a survey conducted by TGI and Mintel (Fig4), 68% of people’s mobile handsets had gaming capabilities, however only 23% of people actually used the facility (Anon(b) 2007). 3G is the current standard of network that powers the communication and facilities built in to many mobile phones, and although sufficing at present, the wide area cell-based infrastructure of 3G works with a smaller

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bandwidth, and simply won’t be able to power applications, software and multimedia based on future handsets (Anon(c). 2003).

4G networks are the wireless communication networks that many research and development labs believe will replace 3G (Anon(c). 2003), although there is no clear evidence to suggest when. There is now a requirement for hybrid networks that employ both WLAN and cell-base wide area network design, in order to optimise the availability of the two. Although not completely defined as of yet, 4G will embrace high data rates and the ability to interoperate between networks. Currently, 3G works with around 5-20 MHz, working at a maximum 2Mbps. By interoperating between networks, and embracing WLAN technology to employ VoIP technology, 4G will work at 100 MHz, or maybe more, running speeds of up to 100 Mbps (Anon(c). 2003). Samsung, as part of the development of its future mobile platforms, is using the 4G convergence vision. Samsung intends to establish:

“the combined use of network access technologies like GSM, UMTS, WLAN and WiMAX that offers users full and seamless area coverage and supply of transmission services to satisfy the users needs. The respective network access can be selected dynamically and with consideration of the price and the required band width. In case the connection to a specific kind of network gets cut, it will be re-established seamlessly through another access” (Anon(d). 2007).

With this vision in development, the potential for future handset technology can expand and create new avenues to not only satisfy the consumer, but create opportunities for mobile advertising. It is vital that advertisers and manufacturers embrace this new network technology in order to drive content rich, high quality advertising to include short - 20 -

videos and TV style commercials, high resolution images, interactive games, PDFs and web pages to the consumer.

3.1.2 Small Changes, Big Difference: Handset Development

Fig 5a. Nokia 3650

Fig 5b. Nokia 3660

Nokia is one such company that is bound to support the pioneering vision of 4G, seeing as it has always been at the very forefront of mobile development. For example, they produced the first mobile phone capable of video capture, in the form of the 3650 8 (Fig.5a), which, alongside 3G, led to the mobile video call. Their work is no different in the present day, as it works with not only developers and network operators, but with the consumer to develop the next generation of mobile handset. Nokia re-launched its Beta Labs website in October 2007, allowing consumers to test applications and software, and also submit their own ideas for how the future of mobile should be shaped. Tero Ojanperä, Nokia's chief technology officer, believes that by grasping a mixture of mobile enthusiasts as

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Or later, the 3660 was released, due to the issues many consumers had with the 3650 keypad (Fig.5b)

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well as the lower level users, they are able to develop the handsets that will fulfil the desires of the broadest possible audience.

"Beta Labs shares some of the exciting new ideas that Nokia is working on and allows users to help shape their future development, a strong online community has developed around Beta Labs, especially attracting technology savvy, early adopter mobile enthusiasts” (Ojanperä 2007).

This user testing, accompanied by the work of the Research and Development (R&D) labs, allows large manufacturers to begin to plan ways to improve handsets, as well as meet consumer’s needs. They are then able to work alongside concept designers to actually see if such technology can be produced. As a result of Beta Lab feedback and R&D work, an artist has been able to conceptualise the Nokia 888 (Fig6), which features a flexible touch screen which will allow it to adapt according to user taste and to facilitate extended functionality, which could include GPS positioning technology. These ‘concepts’ may not even be produced by manufacturers; however they give the consumer an insight into the future that they are helping direct.

Figure 6. The Nokia 888 demonstrating its flexibility - 22 -

Although many concepts demonstrate super slim phones made out of lightweight flexible materials, the most recently reality is that phones have been getting substantially smaller. Whether this size is in relation to its width, length or depth, these phones were, until recently, the most desirable models. However, the past 3 years has shown a change in the focus by manufacturers, as consumers place greater dependability on their mobile phones. With smaller handsets comes smaller screens; an issue that has plagued the plans of advertisers and games developers alike. Clare Chambers is part of a development team assembled by Vodafone; put in charge of creating a financial education game for 13-15 year olds to incorporate into the national curriculum in schools. Such a project created many important questions with regard to the handset used for testing.

“With Vodafone, it was discussed which mobiles were to be used to test the M-game on, and the final decision was to use the Nokia N95, because not only does it have Flash Lite 2 on it, it also boasts a decent size screen… in order to not only see features of the game, but for the game to have a substantial emotional impact upon the user. It must be equal to the screen size of the iPhone and handheld consoles” (Chambers 2008, Appendix 2). “The typical display screens on mobile devices used to be quite small, occasionally monochromatic, and, in some cases, text-only; hardly the ideal venue for delivering compelling advertising” (Mathieson 2005). Nowadays however, screens are high resolution, with the potential to host high quality pictures, animations and video. With the desire to enhance this quality even further, and allow users to experience the highest potential quality content, “mobile phones will probably get bigger, whereas the recent trend has for them to become smaller” (Chambers 2008). This increase in size of the mobile phone will be driven

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by the requirement for a larger screen size, to accommodate the high quality content that advertisers, operators and ultimately, consumers wish to see on the handsets. Technology, without a doubt, will play a significant role in the future of mobile advertising. With operators controlling the 4G vision, for mobile advertising’s future success, it is important that handset manufacturers and advertisers begin to plan the ways in which they will utilise the increased download speeds and increased bandwidth, to create advertisements that will have a genuine impact upon the consumer. In return, it is vital that the handset manufacturers adjust their development strategy to produce phones that provide a suitable sized screen, as well as technology that can be supported by the developing 4G networks.

3.2 Developing Mobile Advertising – Advertiser Attitudes

3.2.1 The Negative View

Despite a hoard of positive press relating to what is dubbed ‘the next big thing’, there are still industry leaders who are cautious of jumping onto the mobile marketing bandwagon. Scott Berg, Hewlett-Packards Worldwide media director, has revealed he “is frustrated by the limitations of mobile-web advertising; marketers who push out ads rather than allowing users to opt in” (Berg 2007). Advertisers attitudes towards mobile is an issue that is restricting the growth of the industry, but does not necessarily mean this cannot be overcome. Nigel Sheldon of Starcom Digital characterises the mobile market as nascent and intangible. “Nascent because in fact, the mobile advertising industry is just beginning to emerge. And intangible because most brands and agencies don’t have even a base-level understanding or feeling for it yet. They understand TV, the internet and even outdoor, - 24 -

but they don’t yet have a fundamental grasp of what mobile is or could be” (2007). The mobile advertising industry is still such a very young market that is growing quicker than the talent base 9 , however in the next few years, this will begin to inundate with graduates specialising in mobile marketing.

3.2.2 The Role of the Agency and Client

From an advertising agencies view however, there are distinctive aspects of the current mobile industry that is holding them back. Richard Wheaton MD of Neo@Ogilvy is, like many other agencies, excited about the potential for mobile advertising. However, he believes that as the industry is so young, there is little consumer information available to advertisers in order to construct a media plan.

“In the TV or on line space, services like Nielsen and Comscore are available. In the online world, if an agency needs to learn more about what sites men 30 to 40 years of age view, planning tools provide the top 100 sites. To discover the best mobile sites for that group, an agency’s staff are required to surf themselves” (Wheaton 2007).

This is hardly satisfactory for today’s digital agencies to have to conduct research in such a fashion, and not the robust research expected by today’s demanding brand clients. It is understandable that agencies are cautious about using and recommending the latest and brightest technology, if they themselves are unsure of what target demographic use, or even have access to the technology. This is why, only the most basic and proven mobile advertising strategies are being suggested by agencies to clients, because until proof of 9

The graduates and technical staff who are training to work and develop the industry

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success, or an availability of data about their targeted consumers becomes available, most high end techniques will simply be regarded as too risky.

In many cases however, advertising agencies attitudes are based upon the ambitions and attitudes of their clients. There are believed to be three different kinds of client, and the way they impact upon an agencies attitude towards advertising in general:

1) Brands that are required to adjust immediately to new technique because of the audience they are trying reach. Typically these brands are targeting the young adult audience, and this audience is very difficult to reach with traditional methods today. These might be brands like Nike, Apple, and some of the major alcohol brands.

2) Clients that are in the “test and learn” mode. They want to be ahead of the curve, and want to learn to leverage some of these new media and technology platforms.

3) Clients that want to be perceived as innovative. Those clients are trying to shift mindsets and consumer perception – for example a lot of the technology brands that want to be perceived as cutting edge and break through the clutter (Mandel 2008)

With brands all adopting different attitudes towards different advertising, agencies are required to adjust to suit the needs of different clients, rather than offer the latest and most suitable service. Many brands will be unwilling to risk their advertising budget on unproven techniques, which proves a challenge for advertisers to overcome. For example, “if an agency can create a mobile campaign but only reach 20% of the audience, most - 26 -

brands won’t buy into it. Or if an agency offers a ring-tone download program, but can only get a 60% successful download rate, clients will still be inclined to use traditional channels where they can get virtually 100%” (Mandel 2008). On the other hand, some brands are recognising that with the technology being made available to them, they are able to target their consumers through a device which in many cases, never leaves its user’s side. Response rates to a mobile campaign will be affected by the accuracy of the consumer profiling combined with appropriate and effective techniques used. Against this background, the work ethic and attitude of an advertising agency is incredibly important to any brand wanting to adopt mobile advertising.

Mandel (2008) believes that there are two kinds of agency, and the ways in which they approach mobile force their campaigns to suffer. Traditional agencies that use mobile advertising the same as they would traditional advertising methods and therefore, they are not really using it creatively and to the best of its capabilities. Alongside this type of agency are the mobile only agencies. “They are generally more creative and actually understand what you can do with mobile marketing but what they often lack is the understanding of the brand and the marketing objectives, and how to link an interesting creative mobile program to the marketing objectives” (Mandel 2008). With this in mind, it is clear that whatever the agency, it is important for them to not only embrace traditional theory, but to also use the latest techniques in an appropriate and applicable fashion. Without creating this balance, many mobile advertising campaigns will prove to be a waste of the brand’s budget.

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3.3 Developing Mobile Advertising – Content

3.3.1 Relating to the Consumer

For many consumers, one of the main attractions of any media source is its content. The internet, for example, is used for a broad range of purposes, all which can be addressed using Katz and Blumler ‘Uses and Gratifications’ theory. These include Surveillance 10 , diversion 11 , personal identification 12 and personal relationships 13 . All of these uses and gratifications can be applied to mobile media and content. By fulfilling at least one, even all of these sectors, content providers for mobile can establish an audience of consumers who will be prepared to use their service over others.

Of all the uses and gratifications, entertainment is probably the most applicable to the mobile market today. It is available on almost any media platform in modern society, with a range of basic, even interactive TV shows, alongside games websites, console gaming and much more. However, the significant challenge for content providers is to entertain consumers when they are most likely to be bored.

3.3.2 Case Study – Greystripe changes the Games Downloads Model

Most consumers need entertainment when they are in a restricted environment, such as travelling on the train, sat in a café on their lunch break, even whilst they are at work. The handheld console industry has taken a significant step towards filling this void 10

Surveillance includes all material and media used for gathering information. This can include everything from listening to your local news on the radio, to finding your quickest route on a website. 11 Diversion is the term used in relation to entertainment, which can be anything from listening to your favourite radio show, to watching video clips on YouTube. 12 Personal Identification involves all media that allows the user to personally relate to it. This can often be Readers letters in a magazine, or a fitness regime for injured sportsmen on a website. 13 Personal relationships is identified as all media which can provide the user with the ability to discuss with other media users. The most common use of this is with TV soap shows providing users the opportunity to discuss story lines.

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by creating small yet powerful consoles with a wide variety of games available to a broad age range. The main problem here is that these consoles are not ‘slip in your pocket’ size, and are in fact extra luggage to carry around with you. Gaming on mobile phones therefore, has the potential nose ahead in the race for the consumer’s entertainment gratification. The mobile games download industry has proved immensely successful all over the world, with “17 million consumers downloading games in the USA in 2006” (Mitchell 2007). By providing the consumer with a vast selection of games, providers are able to supply to even the most niche markets. Advertising in connection with games downloads however, has usually proved unsuccessful, with consumers unwilling to download games that are flooded with advertisements they are required to pay for. Finding a model to benefit all parties has been few and far between, however in 2006, a games development company, Greystripe, found a potential answer. They set up Gamejump.com, which provided hundreds of mobile game titles from around 70 publishers at no cost to the consumer. “All the titles are free for consumers to download and play, with publishers and Greystripe making money by serving up advertisements prior to each game session, as well as in-between levels and at other moments” (Davis 2007). After their first 12 months of operation, the results were extremely positive, with “14 millions downloads made from its main online portal gamejump.com, as well as other white label Greystripe sites” (Davis 2007). It is clear that when content for mobile is made available for free, consumers are more than likely to tolerate advertising that interrupts game play, as this is a sacrifice they are making in order to improve their handset. The high success rate as demonstrated by Gamejump.com means that by adjusting business models to accommodate advertising, games developers are more likely to reach a broader audience and achieve a higher rate of downloads.

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3.3.3 Summary

Games however, are just a small part of a vast download landscape that allows the mobile owner to improve the quality of their handset, as well as personalise it to suit their tastes. Ringtones, screensavers, backgrounds, text alerts and music have all established themselves within the market place, and are satisfying current consumer demand, however the future of mobile means that soon consumers will want a broader range of content. The cost to manufacturers and providers to produce this content will be extensive, which will in turn create the opportunity for advertisers to participate and allow providers to administer the content to the consumers for minimal cost. For mobile advertising to be a success, all sectors of the industry must strive to provide the consumer with the broadest range of quality content, as well as work together to ensure that all parties can benefit from its application.

3.4 Developing Mobile Advertising - Consumer Acceptance

3.4.1 The Importance of the Consumer

Regardless of technological developments, brand new content or a change in advertiser attitudes, the ultimate success of mobile advertising lies with the consumer. Consumers are the driving force of any industry; without them companies are unable to profit or function. The consumer can make or break the success of a new product or method, such as mobile advertising, which is why gaining consumer acceptance is so important. Consumer acceptance is based upon the three previous key drivers of mobile advertising, in the following fashions: - 30 -

- Technology – all campaigns must be produced in accordance with technology that is readily available to the consumer. If a campaign utilises the latest technology, an alternative campaign should be created in order to target the demographic without access to such technology.

- Advertiser Attitudes – all campaigns must be produced with the consumer in mind. If a campaign uses ideals that do not apply to the mobile consumer they are targeting it will prove unsuccessful. Therefore, as discussed by Mandel previously, agencies must find a balance between ideals established by traditional media, alongside an understanding of the modern mobile market.

- Content – if an advertising campaign is to use content, it must provide the consumer with a sense of benefit. This incentive-driven advertising will allow advertisers to target consumers, without a negative response.

As addressed by Tsang, Ho and Liang, even with such cooperation from the other stakeholders, creating successful mobile advertising still heavily relies upon the issues of trust and privacy. ‘Since the mobile phone is a very personal device that allows an individual to be accessed virtually any time and anywhere, mobile advertising must be more personalized and may take different forms’ (2004).

3.4.2 Forms of Mobile Advertising

The forms that Tsang, Ho and Liang discuss are the ways to ensure that any challenges associated with trust are overcome. The first example of such form is

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“permission-based advertising. This differs from traditional advertising in that messages about specific products, services, or content are sent only to individuals who have explicitly indicated their willingness to receive the message” (2004). The traditional methods of mobile advertising are notoriously irritating, with ‘push-based’ advertising spamming consumers mobile inboxes, which are inevitably ignored, however permission based advertising is supported by supplying the consumer with the information that they want to receive.

A way of enforcing permission based advertising is to adopt another form of advertising, as dubbed by Tsang, Ho and Liang (2004). “Incentive-based advertising provides specific rewards to individuals who agree to receive promotions and campaigns directly to their mobile.” For example, mobile phone companies may reward customers with free connection time for listening to voice advertisements. Both permission-based and incentive-based advertising mechanisms are feasible for mobile advertising because the wireless technology makes it possible to identify individual users. In addition to individual identification, mobile technology also makes it possible to locate a particular consumer. Location-based advertising takes advantage of this feature to target people in a certain location and advertisements are sent based on where the user is or where the user is going.

4.1 The Future – Who is doing what?

4.1.1 What they have been waiting for…

The aforementioned growth drivers all have significant impacts upon the future of mobile advertising, and fulfilling the needs and desires of the consumer the desired achievement of - 32 -

the industry as a whole. Nevertheless, the hindrance posed to advertisers has always been the ability to measure the success and response to mobile ad campaigns, which has been absent from the early years of the industry due to the relationship between network operator and agencies. However, on the 11th February 2008, at the Mobile World Congress in Barcelona, the GSM Association and five of the world’s leading mobile operator groups made a major announcement that will have a long reaching impact on the future of mobile advertising (Mobiad 2008). The GSMA announced that five of its members: Vodafone Group, Telefonica O2 Europe, T-Mobile International, FT-Orange Group and 3 (Hutchison Whampoa) have formed a working group to define common metrics and measurement processes for mobile advertising as part of the GSMA’s Mobile Advertising Programme (Mobiad 2008). This significant step towards a future for the industry is of great importance in general; as it brings together the major network operators and their specific markets under a universal umbrella to understand the ways in which consumers respond to mobile advertising. Rob Conway, CEO of the GSMA affirms:

“The working group and the GSMA will facilitate crucial engagement between mobile operators, advertisers and agencies, to help ensure that mobile advertising realises its full potential for the benefit of all players in the ecosystem” (Anon(f) 2008).

The data will not be collected or delivered by a single organisation, but will be openly available to all respected parties. The concept of working together, and allowing even their business rivals to benefit from the information collected, is not fazing any of the major operators views of the announcement. Steve Ricketts, Head of Third Party Services for Orange UK is excited by this industry-wide initiative to support advertisers and agencies in buying mobile advertising. He also insists that it is essential that the industry works - 33 -

together to ensure mobile adverts work for both customers and advertisers (Anon(g) 2008). The plans made by the GSMA indicate the beginning of a new era of mobile advertising, as it will no longer rely on audience opinion and consumer feedback, but advertisers will now be able to see statistics relating to campaigns in order to judge the rate of response, click through rates and much more. Many of the surveys and research conducted within this industry have shown that the majority of users do not read, or immediately delete mobile advertising they receive in their phones, and with this new information, advertisers will be able to understand why they are deleted, or not followed up, and how they can develop campaigns for the future that will reduce this number.

These new plans reaffirm the industries desire to overcome one of the main challenges that has faced mobile advertising since its birth, and work in unison to create a £multi million industry by employing the most affective advertising methods.

Despite these major developments, there have already been steps taken by sections of the industry to work around this obstacle. Specialist networks have recognised that consumers are willing to receive advertising in exchange for free calls and texts as part of their contract. This is where specialist network Blyk has recognised these strengths, and applied them into a business model that can benefit no only themselves, but every stakeholder in the industry.

4.1.2 Case Study – Blyk – The Next Generation Network Blyk was the first advertising funded mobile network to be launched in the UK in September 2007. It was described as the ‘new mobile network for 16-24 year olds’, which is - 34 -

actually a requirement to be able to join the network. Blyk customers will receive up to six marketing messages per day from the Blyk advertising brands they like on their phone. In return, the network offers 217 texts and 43 minutes of calls free, every month. Instead of flooding all the consumers with the same advertisements, the ads sent are tailored by their usage of the phone. Marko Ahtisaari, Co founder of Blyk, explains how consumer profiles are formed: “For example, when an advertiser runs a campaign, they can see which groups of subscribers react well to it and which don’t. That advertiser can then use this information later to target these two groups differently. This information – which is proprietary to the advertiser - will build up over time, and therefore there is a benefit from being a long-term advertiser on Blyk.” (Ahtisaari 2007 cited Cook, F. and Cook, J. 2007) This form of consumer profiling is non invasive and still allows consumers to be treated as individuals. By recognising what consumers respond to, as well as the occasional questionnaire, Blyk are able to provide advertisers with detailed profiles that aren’t disrupting consumer privacy, nor are they utilising private data such as address, ethnic origin and employment to gauge any further opinion. Ahtisaari (2007) believes for it to prove successful as an advertising method, it requires having “not only the right targeting capability, but a variety of global and local brands to participate” .At the Mobile Advertising conference 2007, Geoff Morley, as a representative of Blyk, revealed that since its launch, advertisers engaging with the 16-24 year old subscribers are getting an average response rate of 35% with the top campaign delivering 43%, and the ‘worst’ a hugely enviable 12% (Cameron 2007). Blyk targets a specific market, with opt in users, utilising brands that are appropriate to the target market. By using brands that appeal to the specific market, consumers can receive information that they may want, or would usually search, to - 35 -

receive. This directly benefits the consumer, by not only being provided with free minutes and texts, but also establishing contact with themselves and the brands that they use. The benefit for the advertiser is clear, as it creates the direct link between itself and their specified target audience. The main result of this is that the advertising brand can see how the audience has responded to the campaign, which in turn enables them to improve any future campaigns they may wish to run. Obviously, this kind of network is tailored for an audience that relies heavily on the mobile phone, however as this audience grows up and develops alongside this type of network, the network will expand and adjust to provide a service for an older age demographic. The plans made by the GSMA to measure mobile advertising success and response will enable advertisers and operators to develop a similar business plan, without restricting the use of their facility to a specific age group. By bringing together two sections of the industry, all parties, including the consumer, will benefit.

4.1.3 Mobile Advertising Partnerships Because the mobile advertising industry is controlled by so many different parties, the immediate future of the industry will rely on cooperation between these different sectors. The plans made by the GSMA, as discussed earlier, bring together network operators to aid advertisers in selling advertising space in the mobile portal to potential cliental. This is just one example of the importance of relationships between stakeholders in the industry, and the ways in which they can come together to overcome the challenges that face this embryonic media channel. There are many relationships that have already been

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established, as well as relationships beginning to develop, that promise to have a real impact upon the future of mobile advertising. One of the most noticeable relationships established in 2007, was that of Apple with YouTube and Facebook. The iPhone had a YouTube button incorporated into its ‘dashboard’, which gave the user direct access to the site and its available content. As well as this, Facebook developed an iPhone version of its website, which was tailored to suit the screen size and functionality that the handset provided. The ‘Facebook Phenomena’ of 2007 drove social networking to the masses, and contributed to an 11% increase in mobile internet usage through 2007. Dan Rosen, Head of AKQA Mobile division, believes that “people accessing their social networks from a mobile device will be a huge driver of mobile internet usage and a huge factor in the future development of advertising on the platform”(Rosen 2007). It seems that not only Facebook recognised the opportunity to expand its reaches, but the iPhone recognised its chance to provide an exclusive service for its customers. Nokia are the handset manufacturer that is making the most moves in terms of establishing firm relationships with other sections of the mobile industry, with Facebook being one of its many new connections. David Kaplan of Paidcontent.org reported that Nokia and Facebook are working on porting the social network on to Nokia handsets in a major way. The Facebook placement could be as prominent as the YouTube button on the main screen of the iPhone (Kaplan 2008). The reports also suggest that Nokia could seek to invest in Facebook to firm up the relationship and create the opportunity for exclusive rights to a Facebook application. The potential benefits to all parties are clear, with an easy to use and exclusive service for its consumers, a huge boost in sales for the manufacturer, and expansion into and connections in Europe for Facebook. The application paves the way for - 37 -

advertisers also, by enabling brands to use advertising space that is bound to be provided within its structure. This is one of many opportunities that other advertising methods and brands are recognising as ways of accessing a broad consumer base. Nokia is the largest mobile manufacturer in the world, and the Facebook application developments are just a small part of their partnership plans. Merely a month after reports of the Facebook link up were released, Nokia announced a deal with Google to integrate its search engine into the handset manufacturer’s mobile application. Ilkka Raiskinen, vicepresident of software and services at Nokia believes that providing choices for their consumers is an important driver in Nokia's internet service strategy, and “this integration allows their consumers the ability to use the innovative search technologies, which have made Google almost synonymous with Internet search” (Raiskinen 2007 cited Jones 2008). And the timing of this relationship could prove very positive for the mobile advertising industry as a whole, as Nigel Sheldon, director of Starcom Digital Agency, believes it is not only mobile social media that will drive the future of mobile advertising. He believes that one of the key futures of the industry is “advertising related to mobile search. Search on mobile hasn’t been completely figured out yet; it is still changing and developing rapidly. But as it improves it will grow very quickly, and there will be enormous opportunities for advertising” (Sheldon 2007). Because of Google’s superiority in the search market, if mobile search is to take off with such significance then it will be Nokia that benefit as the majority of those wishing to purchase a phone for its search facility will go with a reputable manufacturer such as Nokia, with the added bonus of a reliable search facility provided such as Google. This will in turn make advertising space as part of this relationship very expensive, but the potential audience and consumer base will be extensive and therefore highly beneficiary to any brand that wishes to advertise. - 38 -

5.1 Conclusion

The intention of this paper was to explore the challenges that face mobile advertising in the United Kingdom in order for it to become a £multi-billion industry. Using a variety of research and resources, the aim of this document has been to demonstrate what the various stakeholders within the mobile advertising industry need to do and how they need to work together in order to ignite the industry, and to create an entire new relationship with consumers old and new.

Early mobile media campaigns have achieved mixed fortunes demonstrating the need for even the most basic of mobile marketing techniques needs to be fine tuned. The next 5 years will be very exciting, with graduates who have been weaned on mobile phones and the web, beginning their employment with the mobile phone operators, network providers and advertising agencies. However having been educated during the early development period of mobile advertising, they will be able to apply fresh theory to handset producers, airtime suppliers and traditional advertising agencies.

Technology boundaries are changing every day, and the constant development of the new 4G network infrastructure means that the next major step for the network or handset could be tomorrow. 2007 demonstrated that mobile phones have become so much more than communication devices; they are now a way of life. William Webb, senior technologist from Ofcom, envisages a world in the future where mobile phones will play an even more important role:

“On a typical day it (the mobile phone) will start work even before you wake. Because it knows your travel schedule it can check for problems on the roads or with the - 39 -

trains and adjust the time it wakes you up accordingly, giving you the best route into work. It can control your home, re-programming the central heating if you need to get up earlier and providing remote alerts if the home security system is triggered. It is your payment system - just by placing the phone near a sensor on a barrier, like the Oyster card readers in use on London transport, you can pay for tickets for journeys or buy items in shops. With an understanding of location, the mobile can also provide directions, or even alert the user to friends or family in the vicinity.” (Webb 2007)

If this ‘prophecy’ is to become a reality, the potential of the mobile as an advertising medium is bound to be fully exploited, with consumers relying on their phone not just for its organisational ability, but for their entertainment too, as feature length movies, podcasts and TV programmes can all be downloaded in a flash thanks to the swift download speeds offered by 4G. And all these will be watched on 3+ inch sized mobile screens, or even projected onto the nearest wall by projectors built into the mobile phone itself (Collins 2008). These advancements are just the tip of the iceberg, with many developers keeping the paramount new technology under wraps.

If mobile advertising is to live up to its potential and become a £multi-billion industry, the most important factor outlined by this research is the consumer. Mathieson, in his book Branding Unbound : The Future of Advertising, Sales, and the Brand Experience in the Wireless Age, concludes:

‘Mobile Advertising can be a tremendously powerful way to enhance the way consumers interact with, and experience, the brands they know and trust. But that last word ‘trust’ is indeed the operative word. The more we create compelling experiences that

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earn our customer’s trust and respect, the more success we will find as the wireless age progresses.’ (Mathieson 2005)

Establishing a relationship with the consumer founded on trust; that is the true challenge. Many of the issues discussed in this paper may never materialise. The reality is the future is not predictable. However if the mobile advertising industry can create a trustworthy relationship with its consumers, the lack of the latest technology or cheap calls package will have little relevance. Consumers have been swayed by the incentives that can be offered as part of them opting in to receive advertising, and there is evidence to suggest that they will become increasingly receptive to advertisements from brands that they trust, want to hear from, and can benefit from. Permission based advertising is the universal form that the industry must accept if it is to excel. Consumers only want to hear from the brands that interest them, which will in turn, allow these brands to target consumers who have a greater intention of buying their product.

The mobile advertising industry is on the verge of exploding onto the worldwide market. The various challenges outlined by this paper indicate that the industry is willing to cooperate and ignite its success. The stakeholder’s motivation for this success is imperative in order for this highly anticipated industry to propel itself into the high end of big brands advertising budgets. With 3 ½ billion mobile accounts in the world today, it is only a matter of time before half of the worlds population begins to experience the power of mobile advertising.

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Appendices Appendix 1 – Bespoke Mobile Advertising Survey of 100 people 1. What brand of mobile phone do you currently own?

Response Percent

Response Count

Nokia

23.0%

23

Motorola

6.0%

6

Sony Ericsson

32.0%

32

LG

6.0%

6

Samsung

30.0%

30

Siemens

1.0%

1

Sagem

0.0%

0

iPhone

1.0%

1

Panasonic

0.0%

0

Philips

0.0%

0

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2. Please tick 3 boxes that indicate the key reasons you use your mobile phone

Most Important

2nd Most Important

3rd Most Important

Rating Average

Response Count

Cheap/free calls

57.1% (56)

32.7% (32)

10.2% (10)

1.53

98

Cheap/free texts

42.6% (40)

51.1% (48)

6.4% (6)

1.64

94

High level web browsing

0.0% (0)

19.0% (4)

81.0% (17)

2.81

21

Quality in built camera

5.1% (3)

23.7% (14)

71.2% (42)

2.66

59

High level gaming capabilities

0.0% (0)

0.0% (0)

0.0% (0)

0.00

0

In built Satellite Navigation

25.0% (1)

25.0% (1)

50.0% (2)

2.25

4

Organiser capabilities

0.0% (0)

4.2% (1)

95.8% (23)

2.96

24

Other (please specify and add ranking)

11

answered question

100

skipped question

0

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3. What is the key reason for purchasing a mobile phone, for you?

Response Percent

Response Count

Cheap calls/text package

73.0%

73

The latest gadgets built in

10.0%

10

High quality camera built in

3.0%

3

Large screen for looking at pictures, movies or web browsing

0.0%

0

Ease of use

11.0%

11

Purchase incentives (free present e.g. Free games console)

1.0%

1

Response Percent

Response Count

11.0%

11

4. What is your view of advertising in general?

A great way to find out the latest information about your favourite brands

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4. What is your view of advertising in general?

A great way to learn more about new brands

23.0%

23

Not that fussed

13.0%

13

Not overly enthused, however appreciate an entertaining/funny/well produced advertisement

36.0%

36

Not a huge fan, but good when it appeals to me on a personal level

10.0%

10

Dislike, especially when it clutters my favourite magazine/website/tv programme

3.0%

3

Dislike very much, invasive into my privacy

4.0%

4

answered question

100

skipped question

0

5. How do you currently react to recieving mobile advertising (mms, sms, web link, push based advertising that you may have or have not opted in to recieve)?

Delete without even looking at the content

Response Percent

Response Count

34.0%

34

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5. How do you currently react to recieving mobile advertising (mms, sms, web link, push based advertising that you may have or have not opted in to recieve)?

Read, and more than often delete straight away

50.0%

50

Read, but rarely follow up or click through

13.0%

13

Read, and half the time follow up or click through

2.0%

2

Read, and most of the time will follow up or click through

0.0%

0

Always follow up or click through

1.0%

1

answered question

100

skipped question

0

6. Which of the following would suit you best in terms of mobile advertising?

Response Percent

Response Count

Opt to receive adverts on your mobile in exchange for free minutes/texts

41.0%

41

Opt to receive adverts on your mobile in exchange for free gifts (downloads, ringtones, wallpapers, games etc)

8.0%

8

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6. Which of the following would suit you best in terms of mobile advertising?

Receive adverts without any incentive nor personalisation

3.0%

3

Receive adverts from only brands you are interested in and will follow up

19.0%

19

Recieve no advertising whatsoever, my mobile is a personal device

29.0%

29

answered question

100

skipped question

0

7. What would change your stance on mobile advertising for the better? Please only make two choices.

Response Percent

Response Count

Improved quality of advertising and content

23.0%

23

Personalisation of advertising to suit the individual

50.0%

50

More benefits for clicking through or following up adverts

48.0%

48

Less frequent advertisements

53.0%

53

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7. What would change your stance on mobile advertising for the better? Please only make two choices.

Increased number of adverts, but to your tastes

1.0%

1

Other (please specify)

1.0%

1

answered question

100

skipped question

0

8. What would change your stance on mobile advertising for the worse? Click only two answers.

Response Percent

Response Count

Increased number of advertisements

84.0%

84

Adverts from brands you dislike, or do not use

37.0%

37

Adverts that are suited to you yet require to be downloaded (incurring costs)

49.0%

49

Adverts tailored to you, but no incentive to click through

6.0%

6

Other (please specify)

0.0%

0

- 52 -

Appendix 2 – Interview with Clare Chambers What is your current view of the mobiles games market? Under developed, wanting to be exposed and developed, but at the moment has not. There are plans in the background by games developers and mobile manufacturers to enhance, but it is all currently ad hoc, there is however a market for more. Can you describe in brief the project that you have undertaken in association with Vodafone? The idea is to bring together Law, interactive Media and education, looking at providing financial education in a fun and dynamic manner, through a mobile platform. We are dubbing this as the M-Game. Myself and my team are being sponsored by Vodafone develop the game over an 18 month period, using secondary schools and using a sample of 13-15 year old mixed children to test the concept that if you increase financial education, you increase financial inclusion. What do you mean by financial inclusion? Financial inclusion is including people in a financial market place which they will normally be excluded from. Financial exclusion is lacking the basic knowledge pf products that you need to survive in the modern world, for example bank accounts, current accounts, savings, investments, short term credit, (knowledge in terms of things such as mortgages?) even as how much money you get in a month, and how much your outgoings are, basically balancing your accounts. What is the target market for the project? The target market is secondary schools, so the M-Game will go into the national curriculum, it will allow teachers the freedom to not actually stand and teach financial education, but the students will have the game on their mobiles, they will be able to go home, play over a week and learn in their own time at their own pace, in a controlled environment. It is very important when you are designing mobile phone games, you have to work with a controlled environment, so that students have the freedom to learn, remaining with confines the teacher has established. What are the overall aims of the project gameplay, for example, what is the user intended to achieve? The user is intended to achieve a financial awareness, so good financial decision making ability, so we can monitor, from the m-game, the decisions they make during the game, which will be fed back to us and we will be able to see whether they are making sound financial decisions or not. That information will be fed back to the teacher who will follow up the game play with the class and feed individual reports back to the children, and say ‘right you have done this wrong here, why?’, and explain this is what you should be doing, try again but try doing this, and should through gameplay, adjust and begin to make sound financial decisions. What is your role within the project? I am the team leader for the project, myself and Mark Shufflebottom (developer), and I am basically designing the research, the methodology, I do not design the interface - 53 -

of the mobile game, that is Marks area, but I have the input of how the game should progress and the decisions that are wanted to be made. Since being part of the development of the project, how has your perception of the mobile games market changed, or even been established? Coming from a legal background, it is a completely different world to what I am used to, and I did not realise how much emphasis is placed on learning through play, I just believed that computer games were a method for releasing tension and having fun, but its not at all. It is actually an educational stimulus and there is so much business going on in mobile phone gaming that many people just aren’t aware of. What opportunities do you recognise for brands and advertisers to work with a game/application such as your own, or mobile games in general? Mobile phone gaming isn’t that developed and many of the games are basic and can be downloaded from the internet, but for education purposes, there are not many mobile phone games, so that over the next 5 or 6 years, there are a lot of companies that will be producing mobile phone games. For me, advertisers such as banks and financial institutions would like to have advertising as part of M-Games, because if they can target consumers at 13 or 14, this is where they can establish brand loyalty, as many people do not changes their banks unless something goes wrong, so for banks it would be very beneficiary. Do you believe there is a future for advertisers to work alongside games producers in order to target consumers? Ethically, yes, and I think it should be done ethically and morally, because if you are teaching financial education, you would want the advertising to be correct, in order to target the correct consumers and hit the right audience, and so for the game developers it doesn’t take away from what the are trying to achieve. What role will games and applications play in the future developments of mobile? I had a discussion with Vodafone yesterday, and we were discussing which mobiles we wish to test the M-game on, and decided to go with the Nokia N95, purely because it has Flash Lite 2 on it, as well as a decent size screen, so that you can actually see the game clearly, but it has to have a big screen, in order to not only see features of the game, but for the game to have a substantial emotional impact upon the user. It must be equal to tp the screen size of the likes of the iPhone and handheld consoles. Mobile phones will therefore probably get bigger, whereas the recent trend has for them to become smaller. Do educational games have a future on mobile platforms? I believe they do, the research conducted in secondary schools shows that boys and girls are wanting to play ob their mobile phones, and they think it is a good way of learning, because they are teaching themselves, and if people are in control of their own learning, it is deep learning rather than surface learning, and will therefore be retained. Mobile learning is the way to go, we are all on the move, and wanting more and more stimuli all the time, and with your mobile phone you can sit down,

- 54 -

wherever you are, play if for 5 or 10 minutes, and that is your learning done. Having said that, they are not a means of replacing additional methods. Will mobile gaming go on to replace handheld console gaming? I recently spoke to a games developer, who does console games, and we came up with the idea of consoles adjusting to establish mobile phone technology, so it is a primarily a console, with the basic aspects of a mobile.

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