E-Plus tests the mobile ad waters

Mobile advertising has long been touted as the Holy Grail for both network providers and advertisers given the fact that the mobile device is a highly personal device, but unleashing its benefits has been a challenge to date.

"Mobile marketing is small, but it's going to grow," noted Nate Elliott, principal analyst with Forrester Research. "Right now TV, print, outdoor and online are real. For the most part, mobile is still a test budget."

For the most part, mobile advertising initiatives are adopted from the online world. Banners on mobile browsers try to entice customers to click on them. But those initiatives bypass the network provider altogether because they are part of the browsing experience and benefit the content provider. But SMS is one area that allows network providers to monetize advertising while offering a more targeted advertising proposition for advertisers and marketers, Elliott said.

"SMS is the one place where [network providers] have a play," Elliott said. "It is by far the biggest piece of mobile marketing right now ... But it has to be researched and segmented--not simply spamming."

That is the notion behind a new offering introduced by E-Plus in Germany this summer. The operator created a separate business called Gettings and is delivering a mix of push and pull advertising campaigns via SMS, MMS and WAP to all customers of the E-Plus mobile brands--Base, E-Plus, Blau, Vybemobile and Simyo. The advertisements are enabled via Alcatel-Lucent's Advertising Selection Server, an ad serving hosted solution, and are tailored to an individual subscriber's opt-in preferences.

In the Gettings application, E-Plus' consumers choose from among three packages--S, M and L--where they receive between 10 and 25 mobile ads per week. The ad server enables users to provide their preferences so they receive only the mobile ads that interest them. In return, subscribers receive cash vouchers, free SMS or free voice calls.

"The reaction of advertisers and media agencies is extremely positive," said Daniel Euler, managing director of E-Plus' Gettings division. "The capability of reaching a clearly defined target group on a new medium with a clear indicator of how a campaign is performing is the key to success for future media planning."

Revenue is split between Gettings and advertisers in multiple ways, Euler said. "We clearly see this medium as a performance-based medium if a campaign target allows it," he said. Hence, advertisers pay performance-based fees such as cost-per-order, cost-per-lead or cost-per-click, which are not unlike the online world. Cost-per-thousand ad views (CPM) deals are also relevant for non-performance based campaigns where a brand is looking for brand awareness.

Euler said the reaction of its customers has been both of interest and curiosity since Gettings launched in June. "We do not expect that it will become the majority of our customer base in the near future," he said. "However we already see with the development of the opt-in base, that there is a clear market for a program like Gettings, not only being attractive to a narrow target group but being attractive to a heterogeneous target group."