Service Provider Strategies for Mobile Advertising: case studies

SUMMARY

“Mobile will become an important medium for advertisers in the medium-to-long term, but most service providers are still not participating effectively in the development of this market, limiting their opportunities to build new revenue streams and to enhance the user experience through relevant and engaging advertisements and advertising-funded services. ” Alexandra Rehak, Principal Analyst

Product overview

Service provider strategies for mobile advertising: case studies examines the variety of approaches being taken by five leading carriers and MVNOs around the world to the mobile advertising market, with a view to evaluating which strategies are most likely to maximise the opportunities presented by the development of this new medium.

Mobile advertising has attracted much attention from companies within the traditional mobile communications value chain (service providers, platform developers, handset vendors and payment processing engines), as well as from external players, including media companies, content developers, advertising agencies and major consumer brands. Although the market is still in a nascent stage, it is certain that mobile devices, and the content and applications accessed on them, will become important media for advertisers in the medium-to-long term. The question for service providers and their partners is how they can participate effectively in the development of this market and how they can derive the maximum benefit from it, when so many other players are also hoping to extract value from mobile advertising.

Analysys Mason has undertaken a set of case studies that examine how mobile service providers around the world are approaching mobile advertising. We analyse and compare the strategies of the major market players Vodafone and Telefonica, the smaller country level player 3 UK and the MVNOs Virgin Mobile USA and Blyk.

Key areas covered by the case studies include:

• Positioning of the service providers with respect to mobile advertising
• Innovative strategies in approaching the market
• Types of mobile advertising offered
• Primary sales channels for mobile advertising
• Key external partnerships related to mobile advertising and the role of these partners
• Ability to provide targeted advertising
• Metrics for measurement of the success of mobile advertising (the ability to provide these and results)
• Strategies for sharing customer information (demographic, location-based and opt-in) with advertisers
• Development of advertising-funded content and mobile services offerings
• Industries that are service providers' principal customers for mobile advertising
• Most successful mobile advertising campaigns and their characteristics
• Service providers' greatest challenges in mobile advertising and how these are being addressed
• Service provider's views on the importance of mobile advertising to current and future revenue streams
• Lessons learned so far from mobile advertising efforts

We analyse strengths, weaknesses, opportunities and threats for each of the service providers discussed in the report, and discuss the key benefits that service providers can achieve by taking a proactive approach to the mobile advertising market.

Who should read this report

• Mobile service providers (MNOs and MVNOs): to understand the developing market for mobile advertising and the best ways in which service providers can address this. Learn how other service providers are working to position themselves effectively and maximise revenue from mobile advertising.
• Mobile advertising networks and mobile advertising platform providers: to learn more about the most effective ways to form partnerships with mobile service providers in order to expand the mobile advertising market and develop compelling new advertising propositions.
• Investors and consultancies: to understand the opportunities presented by mobile advertising and to assess which service providers are best positioned to take advantage of these.
• Media and content creators and producers: to learn more about service provider strategies for mobile advertising in order to develop effective partnerships and campaigns.
• Handset vendors: to gain insight into the types of mobile advertising that service providers are most likely to promote and participate in. Determine which features and partnerships vendors should develop to make mobile devices an attractive and effective delivery medium for advertising.
• Network infrastructure vendors: to understand the likely development of the mobile advertising market and the ways in which their carrier partners can facilitate mobile advertising. Learn what opportunities infrastructure vendors have to support these efforts.
• Regulators: to make sense of where mobile service providers stand, relative to other parties, in the mobile advertising value chain. Discover which aspects of mobile advertising may require additional attention or regulatory focus.

Author

Alexandra Rehak (US Research Director) focuses on areas that include media and entertainment, mobile telecoms, and international carrier strategy. Before joining Analysys Mason, Alexandra was most recently Director of Advisory Services at TeleGeography, specialising in consulting and research on demand, supply and pricing of international telecoms services. Previously, Alexandra was Vice President, Strategic Development at Asia.com, a developer of Internet and mobile services and applications in Greater China. Her earlier experience includes managing Motorola's Business Research and Strategy group in Asia, acting as a Principal Consultant in the telecoms strategy group of PA Consulting Group and serving as the Director of Asia Research and Consulting for Pyramid Research.

TABLE OF CONTENTS

0. Summary

1. Summary of findings from case studies

• 1.1 General mobile advertising strategy and key points of innovation
• 1.2 SWOT analysis

2. Case studies

• 2.1 Case study: Vodafone takes a globally co-ordinated approach to mobile advertising
• 2.2 Case study: Telefonica Espana Wireless Business has been proactive in the mobile advertising market
• 2.3 Case study: 3 UK has taken a strategic approach to mobile advertising
• 2.4 Case study: Virgin Mobile USA
• 2.5 Case study: Blyk's revenue model has mobile advertising at its core

3. Mobile advertising offers service providers three key benefits

• About Analysys Mason
• Market intelligence services from Analysys Mason
• Reports from Analysys Mason
• Custom Research: meeting your information needs

List of Figures and Tables

• Figure 0.1: Positive and negative aspects of mobile advertising for the subscriber and media buyer audiences
• Table 1.1: Innovative aspects of the mobile advertising strategies of Vodafone, Telefonica Espana, 3 UK, Virgin Mobile USA and Blyk
• Table 1.2: Key differences between Blyk's and Virgin Mobile USA's Sugar Mama propositions
• Table 1.3: Types of mobile advertising being offered by case study service providers
• Table 1.4: Industries named as major mobile advertising customers by case study service providers
• Table 1.5: Analysis of the strengths and weaknesses of case study service providers' mobile advertising
• Table 2.1: Vodafone: key statistics and partnerships
• Table 2.2: Vodafone's available mobile advertising formats by country, at October 2008
• Table 2.3: Selected example of Vodafone's mobile advertising-funded content initiatives
• Table 2.4: Telefonica: key statistics and mobile advertising partnerships
• Table 2.5: 3 UK: key statistics and mobile advertising partnerships
• Table 2.6: Virgin Mobile USA: key statistics and mobile advertising partnerships
• Table 2.7: Blyk: key statistics and mobile advertising partnerships
• Table 2.8: Selected advertising campaigns on Blyk's UK network