Like many companies in the industry, we’re spending a lot of time thinking about mobile advertising. It is one of the 10 manifesto points addressed at our MEX conference in London on 2nd/3rd May 2007. Our original views were explained in a January 2006 research note entitled ‘Advertising – mission or exploration?‘ This prompted a great deal of debate when it was published, not least because it sounded a warning amid a climate of over-zealous enthusiasm.

The introduction of advertising on mobile devices does have the potential to change the way in which services are paid for and, by implication, the way they are consumed. However, our research note on this topic reflected our belief that there are fundamental differences between advertising in the mobile environment and existing forms of digital marketing.

Our view, highlighted in the title of the note, is that the linear nature of a user’s interactions with their mobile device will require advertising to be focused on helping a user complete their mission rather than trying to distract them into exploring tangentially related content.

Most forms of advertising use some kind of contextual awareness to reach the customer in a more appropriate fashion. However, from the advertiser’s point of view, the perceived value of advertising actually increases as it becomes more effecive at distracting the user. In many ways, the ultimate goal of advertisers and their creative agencies is to capture the attention of a customer who is only vaguely interested in a product and convince them to buy it.

This principle drives advertising strategy across television, radio, billboards and, to some extent, desktop PCs.

We believe it will be ineffectual and potentially damaging in the mobile environment.

Most visual interactions between a user and their mobile device last for a few seconds. Looking up a number, glancing at a text message and – increasingly – viewing information on mobile internet sites. These interactions are often conducted when the user is in a state of high demand and low available time. As such, a successful interaction – i.e. when the user manages to achieve what they set out to do – has a high perceived value. Trying to distract the user during this period will not only fail, it may also create a negative association with the brand which is responsible for the distraction.

This is why advertising in the mobile environment turns the traditional dynamics of advertising value on their head. Rather than deriving the most value from creatively distracting the user into exploring something they had no intention of looking at, the most valuable form of mobile advertising will be that which best understands the customer’s mission and helps them to complete it most effectively.

There are many mobile advertising scenarios which are repeated ‘ad naseum’ at industry conferences and in company marketing materials. One of the most popular is the young consumer searching for a local pizza restaurant. Mobile marketing companies will talk in detail about how they can obtain location details from the operator, match them with nearby pizza vendors and even provide walking directions to show the user how to get there.

But can we go deeper than this? What if you were able to use additional information to understand the user’s context? Let’s examine the pizza scenario more closely by looking at what other pieces of information would be valuable in helping to target the user with effective advertising.

The basics are location, time available and mission. Location can be sourced from the operator, but what about time constraints and the nature of the user’s misison? Are they on their own in a foreign city looking for a quiet restaurant where they can sit and read a book for a couple of hours? Are they meeting a friend to grab a quick meal before going on to the cinema? Where is the friend located?

This kind of information almost always exists, but the question is whether users will be prepared to share it with advertisers and whether a value chain can be built to enable the mobile industry to take advantage of it.

In this example, we could determine which friend they were meeting by looking at the text or instant message conversation in which they decided to meet for dinner. Even if this had been conducted on a different day, the chances are we could still form an accurate picture of when this meeting was going to take place by using natural language processing techniques. Google does this with Gmail, tracking the content of email conversations and suggesting calender entries based on the text it reads. The technology is not particularly demanding. I remember a company launching a similar product for early Palm devices in the late 90s, where they managed to do all the processing on the client side.

We may also be able to tell which cinema and which film they were going to by drilling into the reservations system used a couple of days previously. With these kind of data at our fingertips, we can start to make mobile advertising respond to users needs much more effectively.

When the user makes their request for a pizza restaurant, we know what they really want is somewhere equidistant between their current location, the friend they are meeting and the cinema. We also know they only have 45 minutes before the film starts and want somewhere which serves food quickly. The company which can aggregrate the most of this information – whether they are a network operator, web portal or advertising provider – is now positioned to deliver an advertisement which is highly valuable to the user and, therefore, the advertiser.

The advertisement itself could take the form of a mobile internet page displaying search results. It is critical that it should be perceived to be an integrated part of the linear process by which a user requests and subsequently receives information. If it sits outside this linear flow, it will be seen as a distraction.

At the top of the page, there would be a result reading ‘The fastest pizza in town. Order 2 pizzas before 7:30pm and get two drinks free.’ With our prior knowledge of the user’s requirements, we have delivered the most effective promotion, but the user has still only input a single word – ‘pizza’ – to obtain the result. The service has been designed to take into account the ‘low time/high value’ dynamics of mobile interactions.

In doing so, the advertising space has become far more valuable. This means to succeed in mobile advertising, companies must maintain an ongoing awareness of their users’ context, so they are always ready to respond with the most useful information when it’s requested.

In real terms, we’re talking about banks of servers sitting in the background, constantly examining contextual information from a wide range of sources: mobile transactions, email accounts, IM conversations, mobile network data, web portals, reservations systems – all of the digital vaults which contain data about those three key characteristics: time, mission and location.

The role of the aggregator, the company responsible for processing all of these data into an accurate picture of the user and sharing it with advertisers, is critical. We see a fascinating strategic battle breaking out in this area as media companies, network operators and the financial services industry compete for an advantage. It may be as simple as the companies which can get their hands on the most data being the ones that capture the largest share of the value or it may be a more complex trade-off.

JumpTap, which provides ‘white label’ mobile search and advertising solutions to network operators, is promoting a model where it handles this aggregation and the relationship with advertisers, but does so under the operators’ brand. It has signed deals with 8 operators in the UK and Europe, accounting for approximately 250m mobile page views per month, and recently secured a strategic investment from advertising giant WPP.

As with all areas of mobile user experience, the fundamental principle still applies: understanding the customer is of paramount importance.

I’d be very interested to hear from anyone who has views on this subject, so please post your comments on mobileuserexperience.com.

The MEX conference on 2nd/3rd May 2007 will address this topic in detail and, through our unique event format, everyone who participates will have an opportunity to shape the agenda. The session will start with a 20 minute presentation from one of the leading executives in the mobile advertising space (who we will be announcing shortly), after which there will be 10 minutes for Q&A. The conference will then break into small workgroups of 8 – 10 people for 30 minutes of discussion facilitated by our user experience experts – this is your chance to respond to the presentation and share new ideas on mobile advertising. When the breakout groups return to the main conference room, there will be a further 40 minutes for exchanging insights between breakout groups and an open debate, led by the chairman.

Delegate attendance is priced at GBP 1349 for the 2 day conference – to register and see details of our other sessions, please visit www.pmn.co.uk/mex/register.shtml.

This is part 1 of a 2 part article. Read the second part here.