Attended the AIMIA Mobile Measurement Metrics Launch this morning and it was an interesting event that really highlighted where the industry is up to right now. The report is now available for download from the AIMIA site.
There were some great speakers and I think this is a really important initiative.
I also think a few of the un-stated assumptions and where the current focus is was really interesting. The point that raised the most discussion from the audience was questions about why such complex data charges are still being applied and why “flat rate” models weren’t being used to drive user adoption of the Mobile Web in general.
While people on the panel claimed this still didn’t make “business sense”, I think the Flat rate is the new phat – MetroPCS case study posted recently by Vic Gundotra, “Vice President of Engineering for Google’s mobile and developer products” is a classic example of a strong business case.
I am also still a bit confused by the whole economics of the overall Mobile Advertising endeavour based on where this nascent market is up to.
For example, Claudia Sagripanti from GroupM quoted a recent Telsyte research report claiming the overall Mobile Advertising spend in Australia for 2008 was $7 Million. If this is the case then the Telco’s are probably only keeping just over half of that, and if you split it up between the 4 major networks then on average they’re getting less than $1 Million each!
When you compare this with the $44 Million spent by Optus alone over only 2-3 quarters to acquire iPhone users this highlights that Mobile Advertising Revenue cannot be impacting their balance sheet or bottom line at all…at the moment.
The underlying point is that the real revenue for the Telco’s doesn’t lie with Mobile Ad Revenue right now – it lies in the subscription services and data revenue generated when users click on the ads and browse the sites these ads point to.
The real revenue comes from encouraging users to get addicted to the Mobile Web and high-end smartphones like the iPhone and Palm Pre.
The real revenue comes from getting users to stop being afraid of data charges and use the Mobile Web like all of us early adopters do – 24 x 7.
So my question is…”wouldn’t this $1 million for each Telco be better allocated on encouraging users to adopt data heavy mobile habits instead?“.
If this doesn’t happen then the rivers of gold that people believe Mobile Advertising could become will not be realised.
Personally, we’ve gained a lot of data and insights into the real on-the-ground mobile user behaviour over the last couple of years and we are still constantly amazed by how “data charge” phobic the average Australian mobile user is. A lot of people simply don’t know their phones are even capable of using the web. And when we show them that they are they’re horrified and worried that simply clicking on a URL will cost them a fortune. Another large slice of users have even actively disabled data services on their phone so they don’t inadvertently rack up mobile data charges.
It’s going to take quite a bit of mainstream market edumacation to remove these fears and I’m not sure that focusing on such a small amount of Mobile Advertising Revenue right now is really the solution.
As I said, I think the AIMIA Mobile Measurement initiative is important and should be supported. I just think we really need to raise our sights a little higher when we’re considering the underlying goals.