Personalization key to successful advertising strategies

Personalization is the rehashed buzzword when it comes to advertising opportunities in the telecom world, but it is still the key to engaging consumers and unlocking revenue. As network providers begin to pursue more complex advertising opportunities, success lies solely in effectively bringing the right advertising messages to their subscribers. If they don't, they risk alienating their customers.

Fortunately, network providers have a leg up over Internet and content companies in this area as they hold a plethora of information about their subscribers' habits and desires. The key is using that information in the right way to please both end users and advertisers.

"Network providers are in a unique position to leverage their network assets and relationships with consumers to create audiences and help advertisers deliver targeted messages more efficiently and measure ad performance more precisely, while at the same time preserving consumer privacy," said Lisa Ciangiulli, head of personalized and interactive IPTV advertising for Alcatel-Lucent.

Certainly network providers, especially mobile ones, know where their customers are--and with the permission of their customers, can find out much more. A recent survey from Alcatel-Lucent indicates people are willing to give up information in exchange for advertising that is relevant to them. They also want strict control over that advertising, such as the option to opt out at any time and the ability to regulate how much advertising they see. In fact, 83 percent of the 1,000 people between ages 12 and 26 surveyed said they would be willing to share more personal information if they felt that they could have some control over it.

But these are early stages. The service provider community is just beginning to integrate advertising support and management policies that enable targeting and interactivity in their existing equipment architectures. Telefonica earlier this year launched an interactive IPTV advertising proof-of-concept pilot for its Imagenio IPTV customers throughout Spain, enabling TV viewers to use their remote controls to access interactive content linked to a specific consumer brand product.

Mobile service provider E-Plus in Germany recently created a separate subsidiary dedicated to advertising, whereby E-Plus can deliver via SMS, MMS and WAP a mix of push-and-pull targeted advertising campaigns tailored to an individual subscriber's opt-in preferences. E-Plus is using an advertising platform from Alcatel-Lucent. Customers receive vouchers, free voice calls or free SMS in return. SMS, MMS and push WAP services allow operators to monetize mobile advertising, whereas other forms of advertising such as clickable banners essentially go "over the top" of their networks, benefiting Web advertisers, noted Ciangiulli.

"Being able to establish a dialogue with a consumer who is willing to accept advertising and responds to this offer outlines where communication will go in the near future," noted Daniel Euler, managing director of E-Plus' Gettings division. "However, establishing new media channels and formats will not be solved overnight."

Indeed, there is power in marrying multiple media channels, such as IPTV and mobile, because it offers more opportunities for advertisers to reach their intended consumers and gives end users more opportunities to engage with the campaign. However, challenges remain.

"Everyone understands they need to make this happen, but no one has figured out a great way to do that consistently," said Nate Elliott, principal analyst with Forrester Research. "We're seeing some marketers try, but there are a lot of challenges."

Namely, advertisers and media agencies aren't on the same page yet when it comes to media buying. "Different agencies are working on different creative platforms on different formats. There are different lead times for everything," Elliott said.

One agency that is tackling this silo problem is interactive advertising and media company Traction. CEO Adam Kleinberg said the agency was created from the ground up as an integrated agency. "We were really frustrated with the silos between interactive and traditional advertising," Kleinberg said. "The marketing funnel that traditionally existed--outdoor, TV and banners for direct response--no longer exists. Now it's a maze. Consumers are empowered to consume information on their own terms, and that's a great way for a marketer to make a deep connection."

Traction is working with a number of large brands, including Walmart.com, Adobe and Livescribe. The company's strategy is to create a brand narrative that aligns with the business objectives of the brand's customers' behaviors. Traction then maps out what the advertising funnel is for the specific product and business objective. As such, a campaign may then span a mobile advertising platform, Facebook, cable television and a viral video on YouTube.

"Creating a consistent brand is challenging," Kleinberg said. "Return on investment (ROI) is critical for every marketer today, and part of the ROI is media cost. Every time you add a new channel you are adding production costs ... If you spread it too thin, you risk the dilution of ROI--that is something that is a paramount concern to marketers."