Tag Archives: Location-based Services

Getting Mobile Advertising Right: You Have One Opportunity

Mobile Advertising is more like classic Direct Response Marketing than Web Advertising: you have one opportunity for the perfect pitch: for each person, based on who he is and what his is doing—right NOW.

Mobile Advertising is NOTHING Like Web Advertising

Facebook’s IPO, and the myriad analyst remarks on its challenges in the mobile space, has brought the discussion about how to make mobile advertising work back into the limelight. Many have argued that mobile advertising, especially mobile advertising in non-Search apps, has much lower likelihood of success because customers are not in the process of “seeking to buy something”. These arguments are based on the assumption that mobile advertising is like web advertising. This assumption is wrong.

Web advertising (in-text or display ads) offers you the opportunity to present many advertisements to a customer at once on a screen. You can leave these ads up for the duration of the customer’s perusal of the screen or rotate new ads in place over time. In addition, if the customer is logged in (or you have really good cookies) you have high certainty of his or her identity.

Mobile advertising is entirely different. The screen real estate only provides the opportunity for one advertisement. Even worse, you only have a small amount of time (less than two seconds) as your advertisement is “getting in the way” of the customer’s attempt to do something on their smartphone. What you do have in your favor is near certainty of the customer’s identity.

The Approach Needed Solve Mobile Advertising Has ALREADY Been Developed

This is not a new challenge. It is the same situation faced for years when cross-selling products and services to customers from the call center. They had: 100% accurate customer identification, lots demographic and account information on the specific customer, and only a few seconds to offer one compelling promotion before ending the call.

The trick to solving this challenge was to figure out the one ideal promotion to present to each customer based on who he is, what he is currently doing, and the current time-of-year, day-of-week, and time-of-day. Just as important is using the feedback on each to calibrate future promotions to the same customer (to avoid turning advertising into a nuisance), making this more of a Recommendation Engine challenge than an Advertising Engine one. The rewards are enormous: bounty payments for accepted promotions are frequently 100x greater than those for clicked-on ads.

The Technology Exists to Scale This to Mobile

A decade ago, we scaled this model from the 10-transaction-per-second world of call centers to the 10,000-transaction-per-second world of the Internet, generating billions of dollars of value per year. Now is the time to scale this to 1,000,000-transaction-per-second world of mobile to capture tens of billions of dollars in value (luckily we can now grab Big Data technologies off-the-shelf to do this, in the past we had to invent new technologies to scale 100- and 1,000-fold). Mobile, with its “Perfect combination” of validated identity, addressable application data, location awareness and real-time notification services offers an amazing opportunity to take this to the next level.

The Results Would Be Incredible

Imagine this mobile Yelp-like example:

Barney has smartphone and is in the Financial District in Manhattan, Monday through Friday each week. When he installs your app, you get his email and mobile phone that lets you (via sources such as Flurry and PRIZM codes) guess he is likely an affluent male in his mid-thirties. Based on this you may want to advertise local bar Happy Hour promotions when he opens your App between 12pm and 6pm ET on Thursdays. Clicking on the promotion provides a bar code, QR code or confirmation number for redemption with the ad buyer. You can adjust future advertising by tracking redemption rates and controlling for mobile location, day-of-week and time-of-day.

Adding social data to mobile makes this scenario even more valuable. Imagine this mobile Facebook-like example:

Barney has entered lots of information about himself in your App: he is single, he is interested in women, he works at Goliath National Bank (GNB), etc. You can now get incredibly targeted. You can offer a promotion that gives Barney more savings if he brings co-workers from GNB with him. You can now track his response against others based on location, day-of-week, time-of-day and a slew of confirmed individual demographic data (gender, employer, age, etc.) to plan and refine future promotions.

Companies like Facebook, Twitter, Groupon, FourSquare, Yelp and many others have assembled a “treasure trove” of data on customers. Today’s technologies make it easier for companies to parse this data for recommendation and promotion than ever before. Apple and Google make it easy to reach over a billion people worldwide through in-App ads, alerts and notifications. The next step is to map traditional cross-sell models into the mobile space (rather than force-fitting web advertising models).

It’s time for a Location Data Code of Conduct: Four Needed Policies

Article first published as It’s Time for a Location Data Code of Conduct: Four Needed Policies on Technorati.

Later this month the European Union’s “Article 29 Working Party” is likely to issue new rules requiring mobile and smartphone providers to treat location-based data as Personally Identifiable Information (PII). Last week, Apple, Google and others testified on the Hill regarding their use—or misuse—of consumer’s location data from smartphones.

minority-report-monitoring_280px-sqWhat is driving the speed and intensity of this regulatory response? A simple fact: location-based data links mineable information context about what you are doing, when and where, in a manner that is explicitly tied to your identity. This is a watershed threat to privacy we have not seen since the commercialization of the Internet (when we had to pay for Internet access).

Providers of smartphones and mobile applications need to realize and proactively manage this. If not, life could quickly become much harder for them. This would not just be bad for providers; if would curtail innovation enjoyed by consumers.

Now is the time for industry to get out in front and establish a Code of Conduct guiding use of location-based data (just as the Mobile Marketing Association did years ago for text messaging). Not only could this head off costly regulation; it could also set the standard for a trusted consumer experience, significantly expanding the location-based service market.

An effective Location-based Data Code of Conduct should include the following policies:

1. Enable users to turn location services on or off easily and transparently

Location-based tracking and promotion is great when people are gift shopping. However, sometimes it is simply an invasion of privacy. This applies equally to the enterprise, as companies don’t want their mission-critical staff to turn off corporate mobile phones to protect their private lives when they are out of the office. Smartphone and mobile app providers need to enable people to turn location-based services on or off. Those who make this easy and transparent will establish market leadership.

2 Manage location-based data with the same fidelity as billing data

Yes, mobile phones have tracked where you were (and when) for years. However, smartphones now combine this with data about what exactly you are doing—in a format that can be mined for targeted marketing, legal discovery, and more. Providers need to treat these data as sensitively as they do with billing data: asking for consent before collection or sharing, encrypting it, guarding it behind firewalls, and anonymizing it for marketing analysis. Those who fail to do this will lose customers and face lawsuits or worse.

3. Require mobile app providers to adhere to the code of conduct

Right now people are “up in arms” because a few very visible, publicly traded companies are keeping their location-based data. Imagine what this will become when hundreds of “fly by night” companies exploit location data for identity theft, targeted burglaries and more? Industry needs to create an App Store-agnostic, straightforward certification program for location-based app providers. This will create the same trust needed for location services growth that similar self-policing programs did for eCommerce and mobile marketing.

4. Let customers request anonymization of their location data

Consumers are already worried about their online data be stored forever in search engines. However, search engines can only crawl data actively posted. Location-data is collected passively; removing the conscious “should I post this” moment. As a result, consumers face a Hobson’s Choice on consumers: do I forgo location services or permanently lose privacy? Providers need to enable customers to request anonymization of all stored location data. This process can be balanced (e.g., linked to continued service use). However, it must exist.

Location-based services are enormously exciting and present an unimagined range of applications for commerce, logistics, medicine and more. A smart Location Data Code of Conduct will enable all of use to exploit this innovation safely, profitably and effectively.

Article first published as It’s Time for a Location Data Code of Conduct: Four Needed Policies on Technorati.