NOC report on mobile advertising

How can broadcasters make up for falling ad revenues by utilising more mobile digital services?

It’s been a tough year for broadcasters from an advertising perspective. Increased competition for advertising spend from online and direct marketing initiatives, the arrival of DVRs and PVRs etc has reduced the number of eyeballs watching commercial breaks. According to PriceWaterhouseCoopers ITV’s 2006 half year advertising revenue slipped by eight per cent, with its share of commercial adult impacts — that’s viewers to you and me — falling to 32.7 per cent, while the advertising price remained the same. Less viewers for the same money: not good.

Channel Five, meanwhile, reported less than a one per cent decline in revenue, but its share of commercial adult impacts fell to 9.9 per cent. Channel 4 increased its share of impacts to 17.3 per cent — and saw revenues fall to such an alarming level that it might not be able to up its investment in programmes next year.

This raises a number of key questions for all of the players in the TV advertising industry: How long can the price premium last for TV broadcasters? How can they maintain reach in the new media landscape – alone or with partners? How do broadcasters and media buyers develop and use a common measurement framework across media? And how will regulators refine their reviews and investigations in light of there being a wider market in advertising?

2006 was a year when ‘digital’ moved in to the mainstream advertising industry. As the landscape shifted from the traditional ad-based TV business model towards something new, media and advertising agencies have restructured, re-branded and a host of new players exploded onto the market. Online has established itself as a key plank in any campaign but many believe that the real potential for brands to reach targeted consumers is via the mobile phone.

This belief is central to the strategy behind Mobile Interactive Group (MIG), a global multimedia mobile services provider that works with brands, broadcasters, operators and ad agencies. MIG has been working with ITV, Fremantle and Celador for the past two years on programmes such as X-Factor, I’m a Celebrity, The Brits and Who Wants to be a Millionaire. MD Barry Houlihan says he is creating technical and creative play to cope with changing advertising landscape. He believes broadcasters have to look across all available platforms to provide their clients with value for money in these changing times.

“Broadcasters have to create a value-added proposition for their clients today. One where consumers can interact with the brand in a number of ways that will feed
back into their CRM and marketing processes,” says Houlihan. “Brands are looking at ways to take consumers on a ‘digital journey’ which is initiated by on-screen interaction triggered by the mobile phone.”

According to Houlihan, around 40 million people in the UK voted by text message last year to a TV show. The X-Factor now holds the record for the biggest number of votes cast for one show – 20 million in total, or 10 percent of each UK mobile operators’ customer base.

“We managed the SMS voting platform for the second year running but we were also responsible for delivering the pin code facility that allowed users to download an exclusive MP3 track for the winning song by Leona Lewis. The single was downloaded in excess of 60,000 times on night of the final,” Houlihan says.

Statistics like these demonstrate how mobile interactivity can trigger access to a host of other services provided by media companies and brands. “The key is to start simple and take small baby steps,” says Houlihan. “Most consumers are low-tech savvy and they wouldn’t know what a WAP page looked like so you use text short codes which guide the user to a WAP entry point where the journey begins.”

Melissa Goodwin, head of mobile at ITV, says the broadcaster is serious about mobile but adds that any package of products offered to advertisers must be able to cross all available platforms.

“We are the brand that advertisers think of when they consider a programme like Coronation Street. Our mobile portal, online and red button facilities enable viewers to interact with the programme in a number of ways and obviously banner advertising and sponsorship play and important role in this,” says Goodwin.

But ITV has begun to look at other ways in which advertisers can gain additional bang for their bucks. In January it became the first broadcaster to launch a new interactive service initiative which will allow advertisers and retailers to send mobile coupons to its viewers which can then be redeemed at High Street outlets. The service and technology, created by mobile specialists Eagle Eye Solutions, offers brands and stores the ability to directly link their advertising spend to sales generated, via data provided by the coupon system.

The plan is to place mobile short codes in commercials that allow viewers to get a 'mobile coupon' that can be redeemed at retail outlets, says Eagle Eye Solutions MD Julian Reiter.

“Where a till or chip and pin machine is normally used to take credit or debit card payments, we have created a platform allowing the till operator to redirect the till from the banks to our database, enabling the till to redeem the coupon in real time,” he says.

Reiter claims that although the system is Electronic Point of Sale (EPOS) manufacturer-dependent, Eagle Eye has partnered with leading EPOS providers and system integrators to link retailers’ systems with minimal hardware upgrade for almost 70 percent of the UK’s top High Street shops.

ITV’s Goodwin says the initiative will be great if retailers can be persuaded to adopt it.

“We want to be involved with this and give it a try because it’s a fantastic opportunity for advertisers to open a direct dialogue with customers and provide instant ROI data while retailers will get additional footfall in store. We need to trial it first though and make sure all the integration works.”

Over at BSkyB, Paul Wright, head of business development for Sky Media, says that advertisers are looking for opportunities to target consumers across all platforms, but he believes that mobile has the potential to appeal the most.

“We’ve always been very proactive in putting our content online but mobile is becoming a key part of the strategy for advertisers. A lot of the advertising out there at the moment is transaction-based like Text2Win campaigns. Going forward this has to change because companies like Ford who advertise with us do it for branding purposes rather than selling cars. We want to be able to use mobile as an access point for branding and buy-ins from agencies. The problem is that the variety of handsets to which adverts have to be rendered and the operators’ data charges remain a big challenge for the industry,” Wright says.

One initiative BSkyB has been trialling an advertising campaign based on the drama ‘24’. Fans of the programme can find codes embedded in online and offline advertising which they enter via the web enabling them to embark on a ‘24’-style ‘mission’. The website asks for viewers mobile numbers so they can be sent text messages and video outlining the terms of their mission. Naturally, these messages carry advertising for brands who want to be associated with the show.

According to Wright, 56,000 user registered their data prior to the show airing and a further 52,000 visits were made to the website destination after the first show went on air. “To date, however, 166,000 users in the UK have interacted with game – a great result for the team here.”

Advertising agencies have started to think in joined up terms, says Wright, but digital is often separate to the main agency which makes cross-platform campaigns difficult to make happen quickly. “I think the media owners themselves are further down the track than the agencies,” Wright says.

MIG’s Houlihan agrees with this point. He believes that media owners have a clearer understanding of how to utilise brand contextualisation. “It’s crucial that you position the call to action in a context that the consumer perceives value in for themselves. The promotion has to fly off the back of the programme the viewer is already engaged with, for example, inviting viewers of a celebrity cooking show to enter a competition to spend a day in Jamie Oliver’s kitchen.”

But where does the point of interaction start? Ofcom’s advertising rules forbid a direct call to action during the programme so, Houlihan argues, the call must be wrapped around the show and this is where advertisers can seize new opportunities. “You have to do a lot of creative work around the TV show product. Executing this is the challenge and this is why MIG is launching a digital agency to overcome both technical and legal challenges.”

Mark Brandon, COO of Siren TV, a company that develops and manages telephony services for broadcaster Five, says advertisers and sponsors are starting to realise how much value there is in from collecting CRM data via mobile interaction. “To make this market rock the brand benefit has to be evaluated from the mobile experience. We’re activating this market by convincing brands over time what is and what isn’t of value to them. Helping them navigate the complex interrelationships between traditional and new media channels will deliver revenues back to the broadcaster in the end.”