Masterclassing

Fair Exchange?

David Murphy

Murphy's Law OvivoMobile advertising comes in for a lot of criticism in some quarters. Banner ads on mobile don’t work, so the argument goes; they are too intrusive and people don’t like them or click on them. There may be some truth in that, but it’s not doing much to stop mobile advertising’s seemingly unstoppable march towards dominance of the digital landscape.

On Wednesday, eMarketer revealed that global spending on mobile advertising had more than doubled in 2013, hitting $17.96bn (£10.79bn), up from $8.76bn in 2012. Google, with 49.3 per cent of the market, and Facebook, with 17.5 per cent, were responsible for the lion’s share. No one else even registers double figures, with Twitter, in third place, accounting for just 2.5 per cent of mobile ad spend.

Which maybe adds credence to the claims of those people who say mobile banners don’t work, since Google is all about search and Facebook and Twitter are all about native – ads that barely look like ads and which mobile users seem happy to click on.

There was more good news for the ad industry yesterday, with figures from ZenithOptimedia revealing that the UK advertising market will grow by 5.8 per cent to £13.7bn in 2014, beating the healthy 5.5 per cent growth it achieved in 2013. Better still, for those of a mobile bent, mobile will account for virtually all – 94 per cent – of that growth. In reporting the figures, the company noted that some sectors, such as FMCG, that had previously been reluctant to spend on mobile, are now spending heavily.

Ovivo demise
So with mobile advertising seemingly able to do no wrong, how to explain the demise of a mobile ad-driven MVNO, Ovivo Mobile, which closed its doors this week “for reasons beyond our control”?

Ovivo offered its 50,000 users free talk-time, text and data in exchange for watching an ad in their mobile browser every 10 minutes. It raised £1m last year and was hoping to raise an additional £3m by Easter. Presumably the “reasons beyond our control” had something to do with a failure to do so.

Ovivo was not the first to tread this route. Blyk launched in the UK in September 2007, describing itself as the new mobile network for 16-24 year olds, partly because anyone younger or older than that was ineligible to join.

In return for agreeing to receive up to six marketing messages per day on their phone, users were rewarded with 217 texts and 43 minutes of calls each month.
Even with this much lighter payload of six messages per day, Blyk failed to achieve sufficient traction in the UK, and closed its doors in 2009, though it did relaunch in the Netherlands in 2010 in partnership with Vodafone, and for a time, powered the Orange Shots opt-in ad service in the UK, before Orange joined the Weve party. There is still a website at Blyk.com, though the last news entry on the site is 25 June 2012 and the last Tweet from the company was on 27 January 2012.

Even before Blyk arrived on the scene, in January 2007, we reported on a UK company called Textmedia.biz launching a service that paid UK mobile phone owners for receiving ads on their phone. Users could claim 1p - no, that’s not a typo, 1p - for every text ad delivered to their phone. So after receiving 500 of the things, the user could claim a fiver. And with TextMedia planning to send between five and 10 messages each day, it would only take them, at best, seven weeks to earn that fiver. Surprisingly, Textmedia doesn’t seem to be around any more.

Value exchange
The key to this, clearly, is the value exchange. If a user feels like they are getting a cracking deal, he or she will tell their friends about it, the thing has a chance of going viral, and then you get the sort of numbers that start to attract the interest of brand advertisers.

The Blyk value exchange was not attractive enough to attract sufficient numbers of UK users; the Textmedia idea seems like even more of a bad joke now than it did when we first wrote about it. And clearly, Ovivo was asking too much of its customers in requiring them to look at an ad every 10 minutes, which is why it only managed to sign up 50,000 in two years.

That’s not to say such models can’t work. As Kirsty Styles noted in her story about the Ovivo closure, Samba Mobile, which gives users free 3G data on tablets and laptop/dongle or MiFi combinations, in exchange for watching ads, claims to be enjoying success. The difference here is that the users choose how many ads they want to watch, and, therefore, how much free data they get. For each ad viewed they get 3.5MB of data. That may not seem like a great deal but it’s not terrible compared with some of the deals mentioned earlier, and at least the user is in control.

I can’t help thinking, however, that anyone in the business of offering free airtime in return for looking at ads faces an uphill struggle to achieve critical mass. Free wi-fi is pretty much ubiquitous these days, and the amount of promotional material you have to consume to get a decent reward seems excessive.

Perhaps the biggest problem these companies face, however, is the competitive nature of the mobile industry. One of my kids is on a SIM-only deal with Three which gives her 200 minutes, 5,000 texts and unlimited data for £12.90 a month. At that sort of money, no matter how much the brands are getting behind it, who needs to look at ads?

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