Close-Up: Live Issue - Will mobile ever fulfil its potential?

Will a deal between the IAB and mobile operators see mobile live up to the hype? Noel Bussey asks.

Remember when mobile marketing meant a man walking down the street wearing a sandwich board? These days, however, it means advertising directly to the consumer through their mobile phone.

Yes, it's true that it is not a new medium, but it is also true that it has been much hyped in the past but never quite reached its potential.

However, some believe that this may be about to change, following last week's news that the UK's five biggest mobile operators, 3, O2, Orange, Vodafone and T-Mobile, have signed a deal with the Internet Advertising Bureau in a bid to raise the profile, transparency and measurement of the medium and finally push it to a place where it is as important as press and TV.

It will also include the formation of a mobile steering group that will sell the importance of the medium to the wider industry.

Guy Phillipson, the, chief executive of the IAB, says: "It will mean we can help educate advertisers and agencies about what's possible on mobile right now, and do exactly what we did with online to mobile."

However, it needs to be remembered that there are still a lot of hurdles to overcome if the group is going to be as successful as Phillipson and the mobile providers hope.

Andrew Robertson, the chief executive of BBDO Worldwide, says: "The extent to which data is private or not and what constitutes private information and what doesn't is a major consideration."

The medium also seems to be hampered by a lack of understanding on the part of the media and advertising agencies as to how to create good mobile campaigns, breeding reluctance on the side of the client to spend money on it.

Chris Bourke, the managing director of Mobext, a specialist mobile agency, says: "More work also needs to be done in validating our own intentions. Our beliefs need to be rigorously examined so that we can prove we're right in terms of the benefits that mobile marketing can provide.

"We also simply need more brands in the public sector to try mobile advertising. That's what happened with the internet, it needed brands to embrace it, and when they did, it finally took off."

Andrew Walmsley, a co-founder of i-level, also believes that there are other key things that need to happen for the industry to reach its potential.

"Standardised formats, which haven't yet been properly accepted, need to be decided and widely adopted," he says. "Agencies also need third-party ad serving - having servers in-agency so they don't need to constantly chase media owners to find out how well the campaign has done. That doesn't exist in mobile, and it's an obstacle to demonstrating effectiveness. It also raises the transaction cost of managing a campaign."

The overall feeling seems to be that the deal could definitely help bring some stability and understanding to the industry, but companies and agencies are certainly being cautious about its overall effect on the industry, bearing in mind the medium has been hyped up before.

Neil Andrews, the head of portal advertising at 3, says: "I think the potential has been over-hyped. But mobile advertising is something that's really growing as part of our business. I mean, if you look at the conversions in comparison to web advertising, then it really is remarkable.

"Slowly but surely, it'll start to gain bigger budgets from the big brands, but we're at least five years away from people committing huge chunks of money to mobile. At the moment for us, then, it's all about managing the hype."

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TRADE BODY - Guy Phillipson, chief executive, Internet Advertising Bureau

"Mobile hasn't failed, but it's been slow to grow due to a number of barriers, including users' perception of cost for mobile internet roaming. However, the good news is that now all the mobile operators have launched fixed-price monthly tariffs, so it's more affordable.

"Another barrier has been a lack of advertiser knowledge about what mobile can do. When a media agency proposes mobile, it gets put in the 'too difficult' box and the idea is rejected.

"It also hasn't been easy to trade mobile. If an advertiser wanted to run banners on all five networks, it would have to go through a lot of negotiation. But now each of the operators has an arrangement with the sales house or sells directly."

CLIENT - Steve Ricketts, head of mobile advertising, Orange

"I don't think you can say that mobile marketing has failed to meet its potential, because it still needs time to make things happen.

"Mobile as a medium has really good penetration, people use it constantly to play games, surf the internet, send texts etc. Between 12pm and 6pm, it's the most-used medium there is. People always have their mobiles with them and they're always on, so building on that consumption is vital. The Internet Advertising Bureau is there to help us do that.

"Mobile complements all other media that exists. It can be your TV, newspaper, internet, everything. Give it time, and it will become one of the top advertising formats. It's just a question of how long it takes."

NETWORK HEAD - Andrew Robertson, chief executive, BBDO Worldwide

"Who defines that potential? Consumers are spending a lot of time using mobile devices, and using them other than just for speaking. The potential for advertising is very real.

"There are some hurdles to overcome and barriers to face, such as the level of confidentiality and privacy, and there are big business-model issues over who owns what.

"The rules are going to be the same as other advertising channels. In order to work, it will have to be engaging, compelling and useful. Everything you can currently get from a TV, computer and the internet is all available in the palm of your hand. It has to be at least as good as those things."

MOBILE AGENCY HEAD - Chris Bourke, managing director, Mobext

"I think the main problem is that advertisers tend to be reluctant to fund mobile campaigns, as there's a lot of conservatism within the industry about it. It seems that advertisers are all waiting for each other to make the first move, and if no-one does then the idea isn't going to take off.

"I liken the growth of mobile marketing to that of internet advertising. At the moment we're only at the very beginning of the success that mobile can provide. But we're now seeing it play more and more of an important role in the advertising mix.

"I believe that mobile marketing is now the glue that can link consumers to all other parts of the marketing mix."

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