Connect, Interact, Transact: How mobile operators can bridge the communications gap

[As mobile operators compete with the over the top players (Skype, Google and Facebook), many question whether operators have a real value to add besides a pipe. This is the playbook of Martin Geddes, a recognized thought leader who has held positions at companies including U.S. mobile operator Sprint and UK incumbent operator BT. As Strategy Director at BT Innovate & Design Martin was influential in shaping the carrier’s view on Cloud Computing. Peggy Anne Salz caught up with Martin to discuss how mobile operators can prepare themselves to compete in this new world.]

Philosopher and poet George Santayana tells us that “those who cannot learn from history are doomed to repeat it.” The history of telecommunications shows us that the evolution of communications systems is inextricably linked with the needs of commerce and enterprise. As requirements change, systems evolve. They ultimately disappear altogether when they cease to be useful.

The telefax and the telegram, which triggered a revolution in communications, have long been replaced by email and text messages. Now new players and approaches – such as Skype, Facebook and FourSquare – have stepped up to take their place. As telecoms providers prepare to do battle against these over-the-top (OTT) players, Martin argues that the real power lies in neither scale nor scope. In his view the answer is innovation that allows telcos to solve ordinary, everyday interaction problems between businesses and their customers.

The money is in the space between the enterprise and the consumer – a space I call the ‘conversation gap.’” Martin explains. “Take a company that delivers white goods like fridges. You make outbound calls to your consumer customers to schedule deliveries as part of your service. If that customer happens to be roaming abroad in an inappropriate time zone, then you certainly won’t get the result you want.  Same is true if the customer is on the middle of an important call. Or if the customer is on a smartphone, they might just want the company to send them a link to a web page where they can set up an appointment for the delivery on their terms.”

Martin’s point: no service provider does a good job of thinking about the needs of the enterprise and ways to help them connect, interact and transact with their customers. “There is a void and we’re starting to see companies like Facebook rise up to take that space – or at least try.” As he sees it: “The fear that the Facebooks of the world are displacing the telecom industry’s core products — is real. But we shouldn’t overestimate it since Facebook are showing they are pretty inept at business model design.

Connect, Interact, Transact
After thinking this through carefully – and for nearly a decade — Martin has developed a new business model for telecom service providers determined to defend their turf from OTT players. He calls this approach, aimed squarely at enabling commerce and connecting enterprises with their customers, Connect, Interact, Transact.

So where will the Connect, Interact, Transact companies come from? Don’t limit your view to developed countries. To the contrary, Martin is convinced this new breed of company will rise from the emerging markets. A good bet is Africa. “That’s where we’ll see clever cloud communications companies that build products that target what’s known as ‘bottom of the pyramid’ consumers,” Martin says. “Not those living at subsistence level, but those who have a small disposable income. New business models evolve fastest where enterprises, NGOs and governments want to interact with these people – who are tomorrow’s consumers.”

Whether from developed or emerging markets, companies determined to compete against the likes of Google and Amazon should integrate with platforms these companies already provide.

After all, Google and Amazon have correctly focused their strategies on enabling commerce (Google dominates advertising and Amazon’s sphere of influence covers ecommerce and order fulfilment), and it makes little sense to reinvent the wheel. “If you are a small company, then you have to rethink your business to integrate with these companies and platforms to make communications with customers better and improve commerce. Put simply, you have to think about how to either use their APIs to improve business, or connect with those capabilities in some way to make your business more efficient and effective.”

Communications gap
Martin also urges companies to open up to business models and focus their efforts on bridging ‘gaps’ – places where there is a disconnect or mismatch between how people and enterprises communicate and how processes function.

So who stands to win in this new world where it’s all about closing gaps in communication? Martin in convinced that having the connection to the customer is more important than owning the billing relationship. “It’s whoever holds the final interface to the user that has the power. That’s where we’re seeing a massive battle because the operating system, the browser, the unified communications app — all of these have real estate on your smartphone. So now owning the container in which the final experience is being presented to the customer is where the power is.”

Where does the mobile operator fit in?
While many industry observers staunchly believe telecoms operators are doomed to be dumb-pipes, Martin vehemently disagrees with this blanket assumption. “It’s a gross mistake to underestimate the telcos. There are a lot of dead companies and business models that tried a direct full-on assault against the telecom industry and lost. Telcos also have an extraordinary range of customer data and relationship assets that, in principle, position them well to launch new ubiquitous communication products.”

However, operators also need to understand that competitive advantage does not lie in the offer; it lies in the size and breadth of the audience they can reach. “Telcos need to understand that they need to be able to have relationships with people whether or not they are customers,” Martin explains. “That’s particularly true in cases where telcos are trying to monetise services by offering business process efficiency effectiveness and security to third parties.  You don’t necessarily have to be able to bill the consumer at all; you want to just have millions of consumers who have relationship with you.”

Put another way, operators have a central position – one they can cement if they build an over-the-top experience that serves customers that aren’t necessarily their customers.

One operator that understands this model is France Telecom with its ‘On’ product. As Martin points out: “I can download On for my Android phone the Android marketplace and the mobile operator is in the middle of this experience, trying to capture that container experience for my address book dialler and other functions on my phone.”

Futureshock
Clearly, the operator has the capabilities to compete and win against OTT players. But winning may require them to transform more than their business model. In fact, Martin believes that the words ‘mobile operator’ might not have any meaning by 2015.  “It might be that there is a marketing organisation, that has a relationship with the customer and potentially controls various storefronts. But there will also be an infrastructure company. So, you might buy the Apple iDevice in 2015 and it’s a device that comes with content and connectivity bundled in. You don’t need to go and buy a separate service from somebody else; you just pay your service money to Apple. But, of course, Apple’s buying wholesale data from telcos in vast quantities.”

So where will Apple – today’s OEM role model – be in 2015? “The Apple business has a nasty flaw in it. It targets the top 15 percent of the market to get 50 percent of the profits. Yet in a communications market, the revenues are in selling to the new consumers in emerging markets.”

If Apple’s model isn’t about achieving volume, then can it survive in a market where the winners will likely be a mix of communications giants and companies that make commerce more effective?

It’s a tough one to call but Martin believes Apple’s model has some mileage left. “Let’s say that there is enough life in the model to last until 2015, so Apple does have five years left.  Looking further out, the grand growth opportunities around machine to machine, communications as a service and communication-enabled business processes – everything we’ve been speaking about – are not where Apple is.”

So is the future for mobile operators bright?
“Telcos simply got sidetracked by the media business and mobile advertising, areas outside their main focus, forgetting they’re in the business of communications and making communications simple and effective,” Martin observes. “The first thing telcos have to do is undergo corporate psychotherapy. They have to look at themselves in the mirror and accept that they are a phone company. They sell conveniently packaged communications.  If they do this, then they have a good answer to Facebook and Google.  If they stray from that path, then they deserve the awful fate that will become them.”

– Peggy

Martin Geddes is a thought leader sharply focused on what is right (and wrong) with business models in the telecommunications industry. His most recent white paper, Connect, Interact, Transact: A paradigm shift in the business model of communication service providers (www.martingeddes.com/papers), warns service providers of developments that could potentially wreck their current model and suggests new offerings that could secure them a new and even more lucrative position in the value chain.

Peggy Anne Salz is chief analyst and publisher of MSearchGroove, a top 50 influential technology site providing analysis and commentary on all things mobile.

EXCLUSIVE INTERVIEW: Amobee CMO Talks Up New Models For Selling Mobile Content; Is The Pay-Off Bigger Than Mobile Search?

[The Msearchgroove mobile advertising podcast series and close collaboration with VisionMobile continues with a look at ad-funded content and the impact of interactive advertising. And what better senior executive to speak out on this than Patrick Parodi, Amobee Media Systems CMO and head of European operations. His company got in on the ground-floor and has consistently argued that only user-centric (translated: opt-in) services will cover all the bases and boost everyone’s revenues in the end. Next week we pick up with ScreenTonic and keep up the momentum with a top-notch line-up including Hyperfactory, Enpocket, 4INFO, and MoPhat so check back regularly.]

alt=”ingameadvertising.jpg” align=”right” />sdc-amobee-fixd.jpgAmobee Media Systems made its mark on this space through a user-centric, operator-focussed approach to ad-fund the entire spectrum of mobile content. In a nutshell, the system enables targeted, interactive ads to be dynamically inserted into the full range of mobile content and apps, including WAP browsing, video & music, games, SMS and MMS. For a short while it was a lone voice in the space, preaching that only a system that puts operators in control, and allows users to opt-in to receive ads in exchange for subsidized content would ever gain traction. Granted, the space has crowded since, but Amobee remains a first address when it comes to delivering a new twist to permission-based, interactive advertising schemes. (Amobee also supplies developers with HAPI (Handset Application Programming Interface), which can be integrated and activated to make mobile content Amobee ready and conditioned to take ads.)

Take the recent tie-up between Amobee and Anam Mobile, a provider of messaging infrastructure technologies, to deliver a joint solution for ad-funding subscriber originated SMS messages. The solution effectively pays off for both parties: operators can boost their revenues through opt-in advertising, and users have access to a lower cost SMS package (since ads help subsidize the messaging service). It reminds me of the ads and messages that appear at the bottom of email messages, and which we automatically pass around. In a word, that’s the value prop here: a peer-to-peer communication and advertising model that enables viral marketing. (It’s quite unobtrusive, but relevancy is another story.)

At the other end of the content spectrum, Amobee sealed a deal with PacketVideo to serve targeted and relevant opt-in advertising impressions within that company’s media platform. Amobee also sharpened its focus on mobile music, teaming up with SDC, a provider of mobile music solutions, to serve opt-in advertising impressions. (The partnership provides SDC s white label music players the ability to serve contextual and targeted opt-in advertising impressions without affecting the mobile music listening experience.)

But the real news is deployment and operator interest in ad-funding. Amobee tells me both are on the upswing, so we can expect some operators to reveal their trials and learnings soon. In the meantime, I caught up with Patrick Parodi, Amobee Media Systems CMO and head of European operations, to find out how operators are thinking about this model and hoping to protect their turf at a time when strength as a gatekeeper in this scenario is waning. Patrick, who is also Chairman of the Mobile Entertainment Forum, the leading global trade association representing both the mobile and entertainment industries, believes the “user-paid” model is THE key barrier to the growth of mobile data consumption and revenues. His warning: Adapt or die.

Listen to the podcast here. [21:02]

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Don’t get fooled again: As the mobile phone is fast becoming a media channel, bringing advertisers on board in a way that creates value for all stakeholders will lead to a better and bigger market for all. Patrick says signs are good so far that mobile operators have learned the lessons of the fixed Internet and finally figured out that giving it all up to Google & Co. is a short-term solution that’s bad for business long-term. “We ve been excited about seeing some operators take charge – taking a more active role in the ad model as opposed to just saying: Well, you know, at this point we re getting commoditized so we should let some of the Web guys come in and figure out how to monetize the audience.’ We re very much on the operators’ side of the fence in this particular battle that is beginning in this space and we feel that they re in a much better position to provide relevancy and to provide an environment that is going to be positive for the user, positive for the media company, positive for the advertiser and of course positive for themselves as they grow their own brand and their relationship with users.”

Social media hype: Sure, there’s a lot of excitement about the Facebooks, Bebos, MySpaces and other social networking destinations that we can rattle off. But Patrick thinks there’s also a lot more mileage in SMS, which he regards as the mother of all social networks. “I think our implementation of SMS is probably different than some of the others in the sense that it s not application to person, it s really person-to-person.” This approach underlines the importance of the operator, which sits at the center and makes sure ads are inserted in a way that benefits everyone. By utilizing the unused part of the SMS payload, which is what Amobee enables, an SMS exchange between users can be a vehicle that delivers “an ad impression in a relevant manner.” The operator could sweeten the offer by providing users “some type of benefit to be part of a loyalty program, some type of ability to get an upgrade on their handsets or even a reduced cost for the SMS bundle.”

Mobile search matters?:
Not until the industry gets it right. “To look at the web and say Well, you know, search is now garnering 50 percent of the online advertising revenue’ and then therefore to assume the same thing is going to happen on mobile is a bit simplistic.” Patrick is lukewarm on search and convinced that when it does finally arrive the user experience needs a rethink. “Clearly, what I ll be searching for on a mobile phone is going to be different. It s going to be much more tied to location and to immediacy.” Don’t get too excited about the tie-up between mobile search and mobile advertising just yet. “I don t see that as being the highest incidences of impressions being served on a mobile phone in the short-term. I think there s much more that s going to happen .The notion of using the unused part of the peer-to-peer SMS payload as a way to deliver an ad impression [is] going to lead to much higher volumes of inventory in the short-term.” [Well, Patrick may believe this play on P2P communications will drive more advertising. However, I would contend that ads in connection with search results conveniently placed when we are in buy-mode, not chat-mode will pay bigger dividends.]

Skin in the game:Ad-funded can be a particular boost in the case of mobile games, a market that hasn’t “been able to break beyond the 5 percent of mobile users downloading a game over the air for two years now.” If you figure it’s still managed to chalk up impressive growth, then you can imagine the hockey stick in usage when the price can come down as part of an ad-funded content pitch. “It’s exciting for us to be able to be part of a new business model that is going to boost the number of users by reducing, potentially, the price of a game by 25 – 30 percent.” He adds: “It means that the developer and the aggregator and the publisher are getting paid more based on game plays as opposed to downloads. It s going to have an inherent [knock on] effect, producing better games for the industry. I think a lot of people have complained about the poor quality of mobile games. Well, if the model shifts from a pay-per-download to a pay-per-game play for the developer and the IP owners of these games, you could see how that would have a positive effect overall on the mobile games business.” Look for Amobee to “launch some key video trials” to gather the metrics that will tell us more about the right price point for these types of services and how much the brands and the agencies are prepared to pay for those impressions.

More to come:
So far only Orange in France has come out of stealth mode, admitting it has launched a mobile ad-funded trial with Amobee. (Brands include Coke and Saab, and the ads are served interstitially during idle time in between levels or while a mobile game is loading.) In Asia, Amobee has tied up with Hungama Mobile, a provider of mobile marketing applications and the largest aggregator of Bollywood and South Asian content globally, to raise the profile of ad-funded content in the South Asian market. (Hungama has already implemented more than 600 mobile advertising campaigns for its portfolio of over 100 leading brands, such as McDonald s, Coca-Cola, Citibank, Apple etc.) What’s next? Patrick expects more of Amobee’s operator customers to go on the record with their trials and results to date.

BTW: Patrick can’t share stats, but I did report on this during the 16 months I covered the space (and specifically mobile search) for MoCoNews. Based on aggregated data from multiple trials with tier 1 operators in multiple markets, Amobee reported (last November) that for every user who paid to download mobile content, up to 50 users went for the ad-funded offer. The advertising revenues can be worth as much as four times the equivalent download value. Patrick later told me that, when given the choice, over 90 percent of users opted for the ad-funded version rather than pay full price for ad-free content.

Special thanks to the Amobee team and Cristina Whittington @ Nelson Bostock for arranging this interview and my invitation to other companies to keep the pitches coming. If you’re not keen to participate in a podcast, contact me directly to be included in my strategic white paper, a research project I have undertaken for a client to show off the best& brightest in the mobile ad space and weigh their relative strengths and weaknesses.

Interview: AdMob CEO Reveals Stats & Plans For An "Ad Lab" With Apple; Provides Sure-Fire Cheat Sheet For Novice Publishers

[The Msearchgroove exclusive mobile advertising podcast series in close cooperation with VisionMobile continues with AdMob CEO & Founder Omar Hamoui. Special thanks to Paul Nash, creative director at fifty50, for designing the cheat sheet for mobile publishers based on input from AdMob’s best & brightest. Paul, together with his colleague matt Harper, is also driving our new design, and a long list of innovations in navigation and site usability that really rock!]

AdMob has gained some serious traction since it broke on the scene just two years ago, building up the scale and the clout to take on major league players including Google, Microsoft and Yahoo. In fact, AdMob effectively enables the world’s largest mobile advertising marketplace, having just reached its mega-milestone of delivering over 5 billion ads in the last 20 months one billion of those in the last month. (We covered it here and calculated AdMob generally serves more than 370 ads per second.) Since then the company has quietly and cleverly launched a new advertising unit focused on the iPhone. In plain text, AdMob ad servers will recognize iPhone users and serve up iPhone-specific advertisements, paving the way for the company’s network of 2,000+ publishers to monetize their iPhone traffic and develop iPhone-specific content.

And speaking of reach, AdMob has sewn up a slew of deals most notably a tie-up with CBS Mobile, which made AdMob one of its “gang of four” advertising-enabling companies to provide clients ad options ranging from text and banner ads to video interstitials. More recently, AdMob struck a deal with Contec Innovations to deliver ads via Contec’s BUZmob mobile publishing service. Of course, enabling mobile advertisers to place more ads with more publishers creates inventory for all and solves the bottleneck of having more ads to serve than sites to show them on

I caught up with Omar Hamoui, AdMob CEO & Founder, to talk about the stellar stats, the competitive landscape and pose the all-important question: When are you going to be acquired and by whom?! The answer: AdMob will stay an independent company for now, but would consider the option more seriously if and when it runs out of steam. (Not likely to happen any time soon since Omar told me off-line that he predicts “on a revenue basis [by next year] we’ll make 6x what we did this year. If I annualize our revenue last year, the year was probably 10x of what we did last year.”)

Listen to the podcast here. [23:51]
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And a special feature for novice mobile publishers: AdMob agreed to share the secrets of site optimization with our readers. It’s free and fact-packed and you can download it here.

Numbers that matter: First, AdMob has hit a new high, serving up 1.5 billion ads per month, and AdMob does not deal in adult period. What are the stats beyond ads served? “Anywhere from 1 to 3 percent are clicking on the ads. There are ads that perform less than that, and there are ads that perform better than that. But I would say that’s a good middle-ground in terms of what click-through rates are.” Beyond that “anywhere from 5 to 10 percent engage with the advertiser or make a phone call In many cases, if the content is free or you’re signing up [users] for free services, then it’s higher than that.” AdMob also collects reams of information on usage, everything from the user’s geography to the device type. It’s great stuff, and Omar is mulling over how to dice and slice it for us all to peruse. In the meantime, here are a few surprises:

The U.S. accounts for 40 percent of AdMob’s network; South Africa is also upbeat on mobile advertising a phenomenon that likely benefits from flat rate data plans and aggressive mobile operator mobile data promotions
U.S. carriers that pack them in are Boost and Metro PCS – as Omar puts it: They “highly over-index in terms of the percent of users that we re seeing from them.”
40-60 percent of devices on the AdMob network can do mobile video and could therefore receive video ads (probably one reason delivering them is high on AdMob’s agenda )

Partners that pay off: Granted, AdMob’s model doesn’t give operators a cut of the action (or revenues), but Omar can imagine how the shift to off-portal could change all that. “Operators have a unique advantage over anybody. They have data, and that data for demographic information, as well as just user behavior, can be used by advertisers. Even if it s not uniquely identifiable, it can be used by an advertising company such as ourselves to better target our ads. We could increase our CPMs, we could increase our CPCs, and they would rightfully, or should rightfully, be able to charge us for that. If there was some sort of cross-operator standard for providing non-uniquely verifiable data to trusted partners, we would absolutely participate in that and we d be willing to provide a significant amount of the uptick in revenue to the parties that are providing the data. I think that s a really easy example of how we might be able to work with them.”

Mobile search that delivers:
AdMob bumps up against Yahoo so they are competition for ad dollars. But all mobile search companies could be a boost to AdMob it’s a mechanism that points people to new and interesting sites. Nothing specific at this time, but interest is high. “We don t really have any sort of explorations going at this point but there s certainly an opportunity there for us.” Content discovery is a different matter. AdMob will likely announce a tie-up with an on-device portal company in “the next 3 to 6 months.”

Inventory that counts: “We ve gotten to the point where there s a lot of traffic, a lot of page using and more than you can fill with brand advertisers at this point, but what s important to the brand advertisers is not just the volume but the actual content, and I would agree that if you re looking at sort of the high-end sites like the CNN s or ESPN s, or anything like that, then there is certainly not yet a viable amount of content for advertisers to spend a huge amount of money.” He continues: “It s not the fact that it s not available for them to run decent sized campaigns, but what everybody s interested in is just much more content and a lot more standardization so that they know that if they really want to turn up the dials and go up to a huge spend, they d be able to do that without encountering some sort of ceiling on inventory. I wouldn t say we re at the point where demand for advertisers for inventory is so high that their bidding price is up to crazy levels or anything like that. I think it s at a decent point where pricing is still reasonable and advertisers are getting most of what they want, although everybody would want it to be more, if possible.”

R&D that rocks (!): So what’s the deal behind the cryptic iPhone announcement? The new AdMob unit “definitely falls more into the R&D category for us.” He adds: “It also allows us to do some really interesting data analysis and we ll probably be talking about that more in the next month or two, but there s a little bit of an ‘AdLab’ going on with the iPhone right now for us and so it s more than just kind of the overall reach because there s a number of devices out there relative to everything else that s still small. It s not a huge revenue driving issue right now; it s more of a learning as well as a R&D issue for us.” The bottomline: Omar can’t go into detail right now but basically it’s about “learning things that are going to help our ads on all the other phones.” Count on Andreas and me to keep a close watch

Next week we continue the series with Marc Henri Magdelenat, Screentonic CEO, who will discuss the mix that makes for a successful mobile advertising campaign, the tie-up with Microsoft and the role of mobile advertising.

EXCLUSIVE: Where’s The "M" In CPM? Millennial Media VP Talks About Targeting, Reach & Mobile Search

Continuing with our mobile advertising podcast series, we take a look at Millennial Media, the cross-platform mobile advertising company that covers all the bases and then some. I’m thinking here of its broad offer that includes Millennial Motion (encompassing animation and allowing brands to combine audio, video and interactivity) and Decktrade, a performance-based auction service and marketplace for advertisers and publishers. The company has been on my radar since it raised a $6.3 million first round from Bessemer Venture Partners, Columbia Capital, and Acta Wireless in January. Another eye-opener was the partnership with CBS which we covered here. (The four-way tie-up also involves AdMob, Rhythm NewMedia and Third Screen Media.)

I caught up with Eric Eller, Senior Vice President of Products and Marketing, to talk about Millennial’s roadmap, as well as the roadblocks that have so far kept spending and conversions down to such modest levels. Sure, Informa Telecoms & Media forecasts worldwide spending on mobile advertising could reach more than $11 billion annually by 2011 but a lot has to happen first. Eric identified three things that have to change fast.

Reach More people have to use the mobile Internet. “It s about forty million uniques in the world today, versus 180 to 190 million online, so we re still 20 to 25% of online reach and that has to increase.”

Standardization “The mobile experience varies greatly from carrier to carrier, from platform to platform, and even though companies like ours address that layer for the brand and agencies, there still is a huge difference in the consumer s experience.”

Metrics – “The more data that we can get, the better .And more effective programs can be developed to really achieve the targeting and the results that the brands want.”

Listen to the podcast
here. [20:42]
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The dream team: It’s all about CPM but without the proper measurement it’s an empty victory. Against this backdrop, it’s the measurement companies so the likes of M:Metrics and Telephia that can fill the gap and deliver the analytics that can move the market forward. “Clicks are a good metric but, you know, what people in the online space have found is that clicks aren t necessarily indicative of brand impact or of conversion response so we ll have to learn in the mobile space what the correlations are between those different metrics .But I think they re all measurable and they ll become more measurable over time.”

Beyond our reach: The ability to target ads is a few years off but that’s no reason to neglect undertaking the detailed research that is a prerequisite for successful campaigns. “We [as an industry] need to aggregate reach; we need to definitely partner with the companies that are going to ask those questions to that broad reach of people and start building that dataset and understanding what the audience makeup is of the different types of publisher inventory, of the different types of carrier subscribers, of the different types of people that have common behaviours. Then we ll get much closer to being able to offer the different levels of targeting that most advertisers want to buy.

The numbers game: Conversion is always a sticky issue, but Eric offered more detail than most. His insights: “We certainly have seen campaigns where the click through rate is 5 percent and then 50 percent of those convert to buy and that might be for a promotional type conversion right. So, if you need to sign up for a chance to win something, those conversion rates are always very high because the consumer in some cases is incentivized to get those low level conversions so that they can be marketed to in the future. I think it s reasonable to expect that s a relatively low value conversion and it s easy to obtain. A higher value conversion, having someone subscribe to a $10 a month subscription, is a little bit more difficult and then, kind of at the higher end kind of following at the mobile commerce side, if you want someone to download an $80 smartphone application, that s a bigger conversion yet. I think the range of click-through rates is anywhere from 0.5 percent to 5 or 6 percent, depending on how well targeted the campaign is to the audience and the conversion rates can vary from 2 to 10 percent, or up to 50 percent for a promotional type conversion.”

Coming together: Mobile search and mobile advertising are a perfect match, but Eric doesn’t just state the obvious; he gives us a blueprint for how this might work in practical terms. As he sees it, the industry is in a testing phase and search isn’t really about search, it’s about tracking. “Since we re crossing multiple advertising mediums already through applications, through SMS, the search space can be considered a different medium, a different way to reach an audience.” In this context, “we may have a service or solution that allows an agency to buy through us and reach audiences in applications, audiences on search traffic, so in some ways you might look at that as a search engine marketing company in the online space. But there might also be some more automated hooks that allow us to deliver a combined campaign across as multi-medium including search.” (BTW: Yes, I asked. No mobile search company is a suitor for Millennial yet and so far the company is unaffected by the run on mobile ad companies and inventory.)

Motion matters: It’s all about banner and text links now, but Millennial’s Motion product, which enables advertisers to deliver animation, is gaining traction. It’s all about engaging audiences and vector animation is rising up to be part of the marketing mix. “We’ve had a lot of positive feedback from agencies on the richness of the environment that can be achieved when a user clicks on a [graphic] and goes to a motion environment where it s very similar to a web-based animation . Advertising becomes entertainment that can be interactive menus, a virtual showroom, streaming video .It’s almost like having DVD extras [in the content bundle], so that s very exciting.”

What’s next?: Predictably, Eric skirted around the specifics, but he did outline the areas that figure most prominently in Millennial’s roadmap. The focus for the rest of this year is “growth and scale.” So we can expect to see more publisher partnerships like CBS. The other objective: “An aggressive role out of the Millennial Motion product because it s primarily geared towards application inventory. We ve had a number of developers that are kind of in the process with that today and expect to see that inventory growing rapidly towards the end of the year.”

Peggy Anne Salz

VisionMobile teams up with Peggy at Msearchgroove – the premiere thinking-space at the intersection of content and context – to present this in-depth series of exclusive audio interviews.

TOMORROW: The mobile advertising podcast series continues with Omar Hamoui, CEO of AdMob, a company that serves a whopping one billion ads per month. More on the company’s future plans and a fact-packed cheat sheet for mobile publishers – so watch this space!

Read my mind: adding recommendation to the mobile search mix

Understanding users can’t buy content if they can’t find it, an increasing number of mobile operators and content providers are scrambling to offer mobile search capabilities as well as an array of tools that will encourage users to explore more of the content at their fingertips.

The raft of recent announcements, involving tier-1 mobile operators and market giants such as Google, Yahoo!, Microsoft and a growing number of white-label search providers, including InfoSpace, Fast Search & Transfer, Medio Systems and JumpTap, as well as mobile search platform provider, Mobile Content Networks (MCN), shows carriers and content companies are clearly excited about mobile search.

But operators that merely retrofit Web search solutions for the mobile Internet ultimately short change themselves and their users. Popular Web search engines such as Google are fatally flawed. They were designed to treat all searches – and searchers – equal. While the approach consistently delivers the same list of links in response to key words, it fails to recognize the need of individual searchers for relevant results that really matter.

Push vs pull business models
More importantly, such search schemes patently ignore the shift in the business model from user-pull to content-push. Pull is built on the premise that users know what they want and are prepared to go look for it. That’s quite an assumption when it comes to fast-paced content such as entertainment and multimedia which changes faster than users can keep up. The pull model also ignores the rise of empowered customers who increasingly expect – even demand – content and services consistently tailored to their individual needs and in tune with their lifestyles and life stages.

The new paradigm is personalized content-push based on a deep understanding of the individual’s purchases, passions and past click-behavior. It’s even more compelling if the technology can learn users’ likes and dislikes over time to dynamically and consistently deliver the right content mix.

The message is getting through, which is why this year will see the usual suspects experimenting with techniques and technologies to deliver personalized mobile search. Perhaps the most vocal on the market is Yahoo!.

Personalized search and relevant results are concepts that run like a leitmotiv through the company’s new product offer and its future roadmap. A prime example of this new direction is Yahoo! oneSearch, a Web 2.0-type search engine picks up on users’ intent, intuits the information they want and then presents the relevant content, grouped by subject, in synopsis form. A sports search on oneSearch, for example, will return a relevant bundle of scores from a team’s most recent game, along with game schedules, team rosters, photos, local results, and so on.

Adding user choice to the mix
While search does assist in delivering a better end-user experience, the much more lucrative business opportunity may be in combining search, personalization and recommendation to provide users personalized and relevant results – as well as the tools to discover other content they might not have otherwise known existed.

An increasing number of vendors are clued into recommendations and are lining up to wield the power of the analytics they generate. Some, like Medio Systems, are borrowing from the Amazon.com approach to suggest content on the basis of the individual user’s past preferences or on the basis of what a user’s peers consumed, or both. Others including MyStrands, Gracenote and ChoiceStream, making the transition from online to mobile, have cleverly combined their music recommender capabilities and social networking to help users connect with both content and the like-minded members of their community who share the same tastes.

Indeed, the sheer variety of personalization and recommendation solutions enables a multiplicity of business models the mobile industry is only beginning to explore. Moving forward, personalization and recommendation will be must-have features of mobile content services.

mPortal, for example, creates personalized recommendations based on users’ billing records, download history and purchase habits. The company is taking this analysis to the next level, drilling down in the customer data to create ‘content referrals’, and so allow users to share content tips with their friends and family.

Given the highly personalized nature of the mobile phone and the way people use it, there is a high probability that people will buy content and services if they know a friend – and not an operator – is making the suggestion. It’s clearly in operators’ interests to deliver effective and targeted commerce experiences to their customers. While recommendations based on customer information such as page views and downloads will be an important part of this strategy, it will be the recommendations from the tight-knit communities users know and trust that clinch the sale.