Number 22 Ganton Street in Soho is data central. Facebook, with its 25 million UK customers and information flowing through its systems, is in the building. And last year the social network was joined by O2 Media, the sales arm of the mobile telecoms giant, which can provide advertisers with access to 22 million customers.
Shaun Gregory, the managing director of O2 Media, launched the UK arm of the sales operation a year ago and has built a team of 30 staff, selling a range of advertising solutions directly to advertisers and media agencies. He also engineered, last December, its move from O2's HQ in Slough to Soho.
Gregory came to O2 with form in mobile advertising. Having spent time as a director at Emap and then as the new media director at Telegraph Media Group, he launched the UK arm of the mobile ad company Blyk, which has since partnered with O2's rival Orange. The launch of O2 Media, hard on the heels of developments in mobile such as the success of the iPhone and other smartphones, seemed to be an indication that mobile advertising, hitherto a relative backwater in media terms and with more in common with the direct marketing world than the media plan, had come of age.
Gregory is predictably enthusiastic about what O2 can now offer advertisers and agencies and describes its range of solutions as having the potential to "be the gold dust of the ad economy - the ability to target is so powerful".
Gregory is very much of the mindset that mobile advertising should not be seen as too "techy" and baffling, arguing that at heart it's really just a modern iteration of a good old-fashioned data-driven proposition. And this week, O2 has upped its game in terms of the creative range it can offer to advertisers by announcing a partnership with Golden Gekko, one of the leading agencies in the area of developing apps and other widgets for advertisers. As a result, a team from Golden Gekko will sit within O2 Media's office to develop app campaigns directly for clients.
1. O2, which is owned by the Spanish telecoms company Telefonica, announced plans to launch O2 Media Group as an international sales operation back in December 2008. The UK arm was launched a year ago by Gregory after he was hired in March 2009, having previously run Blyk.
Since then, O2 Media has created hundreds of campaigns for advertisers including Adidas, Pizza Hut, NatWest, Marks & Spencer and Sky. It currently has more than 500 brands on its books.
Separately, Telefonica has also just announced the launch of Telefonica Media Sales, an international sales force working across its brands and services. Through this, O2 advertisers can reach Telefonica customers across six markets if required.
2. Advertisers can sign up for a variety of solutions, ranging from straightforward data-driven, targeted text campaigns through to app and display activity that makes greater use of the creative potential of smartphones. O2 attempts to deflect criticisms that its ad service is both intrusive and irritating to its customers by targeting a maximum of only one commercial message to a customer on any given day.
3. Last December, O2 launched O2 More - an opt-in programme for its customers to receive targeted campaigns from advertisers. Customers fill in a detailed questionnaire to enable campaigns to be targeted according to lifestyle preferences. Fifty brands initially signed up for the programme, including Adidas, Cadbury and Blockbuster. Trials of the service delivered response rates of up to 52 per cent and O2 has revealed that one million of its customers have opted in to receive the service. Gregory argues that the service is the ultimate "opt-in" advertising programme: "There is a big topic around privacy, but we put the customer at the centre and make sure they are in control. If you have the time to go to our website and fill in 50 fields, then you are comfortable about it."
4. O2 Media also offers display advertising options around the O2 Active mobile internet service. The channel can deliver four million users each month and one million page impressions each day. Gregory argues that such reach makes the O2 Active offering the equivalent of a TV channel for advertisers. Big-name advertisers including Royal Bank of Scotland and Nokia Music have already used the service.
WHAT IT MEANS FOR ...
- O2 is working hard to build creativity into its approach. Its partnership with the app developer Golden Gekko, announced this week, will bring a greater range of creative solutions to advertisers.
- However, critics of mobile advertising continue to claim that it is intrusive and struggles to connect with consumers. Recent surveys also suggest that it is a medium, even with its video formats, that is failing to build an emotional connection with consumers.
- O2 Media deals with media agencies but, more frequently, on a direct basis with clients. This might be perhaps because, as yet, mobile spend is rarely a priority on the media plan and more easily understood by data specialists.