October 26, 2008

THE (BERLIN) WALL

By Wandrille Pruvot, Regional Director, Europe

Every year – for at least five years now – advertising and new media executives have declared “THIS is the Year of the Mobile Internet!” and while the statement has been true in much of the world (you need only look at BuzzCity's remarkable success in places like Asia and Africa), it has not been the case so far in Europe.


Will 2009 finally be THE year?

We're seeing strong growth in the European mobile market. But unless we see some fundamental changes on the part of the telecom operators, I'm afraid Europeans will still have to wait before they can truly enjoy and benefit from the mobile revolution.

THE (BERLIN) WALL
The first problem is too many telecom operators still make it difficult for consumers to explore the mobile internet. Instead of playing their role as a pipe, European telcos still try to keep eyeballs on their own portals.

In Germany, for example, almost no one goes off-portal. It's just too expensive. A story making the rounds in the European mobile industry is that a German guy gives his dad a new phone as a birthday present. He's showing him how to use all the functions. This is the directory, this is for sending messages, this is how you take a photo, etc. Then he comes to a button for the mobile internet and his voice sharpens a bit: “Dad, never ever touch this button,” he warns. “We can't afford it!”

Just to give you a basis for comparison, in Indonesia, the cost of mobile surfing is practically free. When prices dropped there, the number of page views went from zero to several million each month.

In Germany, Vodafone charges 20 cents per minute (12 euros per hour). O2 has a reasonable plan -- 8.5 euros per 200MB -- but they only target business users. And newspaper-turned-mobile provider Bild Mobile is now offering free surfing -- but only for their own portal, bild.de. Bild Mobile charges 35 cents per MB (70 euros per 200MB, so much more than even O2) if you venture off their site.

The pricing model is clearer and more affordable in France and the UK. While Vodafone charges 12 euros per hour in Germany, pay just 50% more and you get unlimited on-portal surfing in the UK. Of course, most consumers would like to surf any site they like, not just a carrier's portal, but at 35 pounds a month (43 euros), this is still affordable.

Pricing in France is comparable to the UK. SFR charges 40 euros per month. There's even a Google search box on SFR's portal. But the French carrier places barriers in the way. Start a search and a message appears warning you are about to leave the site of the operator. It's like SFR is saying “Be very very careful. It's a dangerous world out there. Even Google search results could be bad for you and your phone.”

SIMPLE PLAN, BUT . . . .
(Don't Forget to Tell People)

The Czech Republic is #28 in Europe when it comes to mobile traffic, with less than one million page views per month.

But T-Mobile has a pretty good offer, at least that's what their rep told me. I told him that T-Mobile's mobile surfing charges weren't clear. He disagreed. “You can roam the internet for just 1 Euro a week,” he said.

“So how come people aren't using it?” I asked.
His reply: “Because consumers don't know about it!”

Build it and they will come? Well, only if you know where to go, how to get there and how much it will cost. With a pricetag of just 1 Euro a week, T-Mobile should be packaging mobile browsing with its normal services, not as a special opt-in.

SO, WHAT'S CHANGED?
I don't want you to get the wrong idea. There is some positive movement in the European mobile market.

First of all, telcos are collaborating to define the metrics of the European industry. Common metrics will make it easier for advertisers to make buying decisions and calculate ROI.

Second, brands have a clearer idea of where to turn when they want to advertise. A few years ago, mobile ad companies claimed they could do everything -- media buying, technology, consulting, you name it. Today, there is more differentiation and specialisation. Advertisers can work with

  • an agency for advice on which type of mobile service is best for a specific campaign (SMS, mobile banners, etc.)
  • a mobile search company like Google (though this is still not so developed)
  • a local network or operator (for on-portal ads)
  • an ad network like BuzzCity.
The advantage of BuzzCity's approach is that (a) we can deliver the traffic and (b) we only charge for click-throughs not page views.

Third, brands no longer question the validity of mobile advertising. They understand the value of the medium. However in Europe this is now a mis-match between (a) markets that advertisers want to reach and (b) markets with enough eyeballs to warrant advertising.

With more than 103 million banner ads in the third quarter of the year, Romania is by far the largest European market. But European advertisers would much rather target German consumers, whose spending power far outweighs that of Romanians. Unfortunately, there's just no off-portal mobile traffic to speak of Germany, so we can't service the advertisers' demand.

REMEMBER: WHEREVER YOU GO, THERE YOU ARE

What needs to happen? It's really very simple. European telcos need to

  1. Drop the barriers to mobile surfing.
  2. Adopt clear affordable pricing models.
  3. Educate consumers
Three simple steps. Then, Europeans can truly celebrate The Year of the Mobile Internet.

October 21, 2008

The BuzzCity Road Show : Johannesburg

The BuzzCity Road Show is headed for Johannesburg this November, where we'll share the latest in Mobile Internet Advertising and advertiser case studies. Also on hand to discuss their experiences are Shaun Rosen from Mobiclicks and Per Ostberg of Starfish Mobile.

Date : 11th November 2008 (Tuesday)
Time : 2.00pm to 6.00pm
Venue : Sandton Convention Center, Maude Street, Sandton
This is a great opportunity to hear straight talk from some of the most passionate, insightful and richly experienced marketing professionals around. We welcome your participation and we'd like to hear what you expect from Mobile Internet Advertising.


For more information and to book seats, please email partners[at]buzzcity.com.



October 13, 2008

MOBILE ADVERTISING INDEX (Q3-08)

Here's the latest data from BuzzCity's quarterly Mobile Advertising Index, which monitors the growth of the mobile internet. From July to September 2008, we delivered approximately 5.4 billion banners, up 38% from the previous quarter. While this growth rate is down a bit from the last survey, we are noticing more depth in the marketplace. Twenty-three markets now top the 10 million banners per month mark, up from 12 such markets in the first quarter.   

The Top Ten

1. Indonesia : 1.8 billion (+47%)
2. India : 660 million (-1%)
3. South Africa : 540 million (-7%)
4. Kenya : 299 million (+91%)
5. United States : 261 million (+37%)
6. Bangladesh : 134 million (+71%)
7. Libya : 103 million (+1640%)
8. Tanzania : 114 million (+30%)
9. Romania : 103 million (+43%)
10. Egypt : 98 million (+76%)


By the end of September '08, Indonesia, India, South Africa, Kenya and USA each delivered 100 million banners to their respective audiences. Notable among the Top 10 is Libya which has had a phenomenal growth of 1,640% just in Q3 2008.

For more details, please download the Mobile Advertising Index (Q3 – 08) here.

October 07, 2008

IF YOU BUILD IT, WILL THEY STILL COME?

By Hisham Isa, Vice President (Marketing)

The economic headlines only seem to get worse – the US credit crunch is leading employers to layoff workers, Europe is bailing out banks and stock market indices across the globe are in retreat. However, as Kok Fung wrote in his last entry, the mood in our industry is still upbeat. In my column today, I'd like to suggest two reasons why this is the case:

1. Mobile services already went through a downturn three years ago. In 2005, poor content was too often matched with high prices. In 2006-2007, industry executives adjusted their business models. Subscription-based fees were largely abandoned, prices were lowered and new avenues for distribution developed.

2. New services and new content that are relevant to consumers are continually being rolled out. Relevance is the key here.

Let's take a look at some examples . . .

Italian Guide to Lower Food Prices
A government ministry in Italy has launched a free service to help consumers compare food prices. SMS Consumatori sources information from over 2000 stores and sorts the price data by region. Consumers send a text message with the name of the item they wish to buy. SMS Consumatori returns a message with wholesale and retail prices. The government website also tracks pricing trends and lists the stores with the highest and lowest prices.

Mobile Marketplace in Bangladesh

University students post ads to tutour secondary school students. Farmers buy and sell cattle and produce. There are postings for computer parts, flats for rent, used cars, you name it. CellBazaar has been used by more than a million Bangladeshis since its launch in August 2007. A quarter-million use the service on a regular basis. Some observers call it Bangladesh's "Craig's List". There's a website and a WAP site. But users must have a contract with GrameenPhone, which earns revenue from users who text messages to the site. To find an item to buy, just text "buy" to the short code 3838 and then browse the categories or view individual postings. In percentage terms, the service's penetration isn't that high (less than 1 percent), but it's greater than the percent who use PCs and is growing. For the farmers, fisherman, shopkeepers and students who use it, CellBazaar is revolutionising their opportunities.

Mobile Banking in The Maldives
It's not unusual for a Maldivian to travel four hours by boat to collect a salary or make bank deposits. Internet penetration and PC ownership is low, so the Maldives government is turning to m-banking to improve the lives of its citizens. In fact, the country hopes to become the first nation where mobile phones are the primary vehicle for banking.

M-commerce in Mexico
Japanese have long been accustomed to using their mobile phones to buy train tickets or food and other items from a vending machine. But m-commerce has been slow to catch on in other parts of the world. Now, Mexican banks and telecom companies (Iusacell and Telefonica SA) are teaming up to enable consumers to pay restaurant bills and taxis via mobile. Cell phone users simply need to tell their banker to link their bank and phone accounts.

Property Search
Services like Trulia and Terabitz allow consumers to search homes for sale, see photos and property details. They started out online but subsequently launched mobile services. Terabitz focuses on the iPhone market, but Trulia is available on many platforms. Both services map property locations, which looks pretty cool and makes it easier to chart a course and find them. Given the current state of property and credit markets, these services aren't as relevant now as they were a year ago.

So what's next?
Like everyone else, mobile industry players are keeping a close eye on trends (and shocks) in the broader economy. But content producers are providing services that enable users to make money more easily or cut costs. User costs are always a factor. Fortunately data rates have dropped pretty much everywhere (with the exception of a few notable cases like Zimbabwe, where it can cost as much as US$7 to send a SMS).

The bottom line is that the mobile economy is developing well and that mobile services continue to improve people's lives, good economy or not. If you're going to build something, make it useful, make it relevant, make it affordable . . . and consumers will still come.
----------------------------
BUZZCITY CEO TO SPEAK IN JAKARTA
Interest in the Indonesian market continues to offer more opportunities for mobile players. If you are in Jakarta on 4th & 5th November, be sure to catch Kok Fung as he shares insights into developing new mobile content services at the

Indonesia Telecom International Summit
The Ritz-Carlton Hotel
Kuningan District
Jakarta.

Kok Fung will share ideas on the potential in Indonesia for user generated content, mobile social networking and the different models for profitable partnerships. He will also share our experience from overseas emerging and developed markets.