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Monetizing Personalization

Personalization has long been an industry buzzword and an expected treasure chest of potential revenue for content owners and providers, as well as operators. Finally, we are witnessing the industry turn this potential into realistic returns on the investments companies have put into developing a personalized experience for consumers. In addition to the obvious benefits to user experience, strides made in personalization have opened the door for mobile advertising as a legitimate and acceptable way to generate additional revenue.

Personalization Evolves
 
The mobile phone has always been a personal device. Its portability immediately makes it an extension of the user. The first wave of personalization followed the basic desire to customize one's phone like an accessory. The market for ringtones and wallpaper, even hard goods like skins and holsters, exploded and continues to thrive with avatars and video messaging.

As phones and networks become more advanced, personalization is evolving to include more than just the participatory approach, where users choose to make their phones look and sound unique. The anticipatory approach is a much deeper form of personalization where operators deliver a targeted, relevant and personal mobile experience to users based on their personal profile and behavioral habits.

Context is King
 
The anticipatory approach leverages the operator's unique knowledge of its subscriber base: where they've been; what they have done; where they are now; and what they are doing. This golden goose of contextual awareness includes a user's profile, preferences, usage patterns and location data, all of which can be rolled into one solution that functions like a concierge across all applications.

The anticipatory approach won't replace the participatory, but it will gradually permeate the entire mobile experience, making it easier to do the things users want to do on their phones. It is also the only foundation on which a viable mobile advertising model can succeed.

A Billion Audiences of One
 
By pulling all the individual bits of subscriber data together into one whole, the operator has a rounded, 360-degree-view of the user and can target him or her, accordingly. For example, imagine a clothing retailer geared toward teenage girls. Mobile ad networks will only achieve a nominal hit rate for impressions, as so many mobile users are not fifteen-year-old fashion-conscious girls. What if the clothing retailer could sharpen its aim so the ads hit a strictly 13- to 16-year-old female demographic? Not only will the click-through rate will be higher, but an important connection will also be taking place.

The inherent nature of the mobile medium is uniquely one to one. This is a major paradigm shift in advertising. Even compared to web advertising, where a deeper level of targeting is possible, the mobile screen is like no other in that it moves with the consumer. We look at our mobile screens many times throughout the day, independent of time and place. The relationship with our mobile device is much more personal, and in that context, the information that it serves feels more intimate — like a personal assistant offering recommendations.

Beyond the Banner Ad
 
To date, advertising has changed the business model in every industry in which it was deployed. Its impact in the mobile market will be similarly profound. But care must be taken not to stymie its growth with intrusive, spam-like content.

Operators that create the most personalized experience for their subscribers are in the best position to roll out an acceptable advertising solution that doesn't interrupt the user?s experience. The key lies in a multi-channel delivery using tools and widgets on the handset itself. For example, if the operator has a system in place that anticipates a web destination based upon a particular user?s past history, it can integrate advertising in the form of "suggestions" in a subscriber's pick list. Several European operators are at different stages of deployment of solutions which give users "Personal Offers" i.e., recommendations of premium content based on their previous behavior.

Spreading the Wealth
 
It is not just operators who are reaping the benefits of a personalized advertising solution. Everyone within the mobile ecosystem will start to see the rewards gained from intelligent targeting and delivery models.

Content owners, like record labels, can target individual fans of a particular band and refer them to new releases, tour dates and merchandise, along with exclusive content such as interviews, video outtakes and remixes. O2 has found great success leveraging their O2 arena in London to give subscribers extra access to the live events at the arena and deals on merchandise.

Sports teams are creating widgets that, if opted in, live on a mobile phone's idle screen and offer the latest news, results, replays, archive footage and special merchandising deals. Such packages can be developed for any content category, celebrities, film, sports, gaming, etc.

Personal Issues
 
For mobile service adoption and usage rates to climb to optimal levels, it's clear that services like the ones mentioned above need to become as personal as the device itself. Users do not want their phones to become like their home mailbox, another receptacle filled with offers that they have no use for.

Creating this personal experience is not inexpensive and passing the cost onto consumers keeps adoption rates low. The industry acknowledges advertising as the way to subsidize the delivery of premium content and new services.

Personalization is a trend that has been discussed, but the technology and understanding of how, and even when, to leverage targeting and context has finally arrived. The personalization of content represents an advertising opportunity like no other before it. It is up to those in this burgeoning new value chain, operators, publishers, brands and platform providers, to make sure this new business model keeps the user at the center. In this way, everyone in the mobile space stands to benefit from new revenue streams.

  



 
Index Winter 2008
Introduction
NEWSFLASH: Openwave Announces Contextual Advertising Solution
Product Spotlight: Openwave Integra
Monetizing Personalization
Converged Communications: Revolutionizing the Messaging Experience
 
 
 
 
The future of the mobile industry rests in the intersection of content, communications and context — the heart of Personalization.  
 
 
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