July 2008

The Future of Mobile Content and Marketing

By Celltick Technologies

Mobiles are arguably the most transformational device of the modern world, not just as a portable,
multi-purpose piece of technology, but as a social and commercial tool.

Let’s start with their ubiquity. There are an estimated 1.5 billion TVs in the world and 820 million
PCs. There are estimated to be a staggering 3.2 billion mobile phones worldwide: four times the
number of PCs and twice the number of television sets. Of course, the reach of television sets is
near universal in many countries because of multiple viewing of any one set.

However, we tend to forget that PCs - usually used by one person at a time outside of games-
playing teenagers - are only in the hands of a minority when looked at globally.

No wonder that the battle between such giants as Google, Microsoft and Nokia over the next few
years focuses on the Mobile Internet rather than its PC-based parent.

Mobiles have already transformed lives in a social sense. This is most dramatically apparent in
places such as Africa and India where vast numbers of people who have never had a landline, rely
daily on their mobile.

Yet whilst this social effect has already been extraordinary, the commercial and marketing impact
of mobiles is in truth embryonic.

People have been talking about “The Year of the Mobile” in terms of its importance as a marketing
tool for several years. Yet, so far, is has failed to materialise.

Informa projects that global mobile marketing spend will stand at $11bn by 2011 and e-Marketer
places it higher at $13.8bn by forecasting a massive compound growth rate of 48% for the five
years from 2006. These are politician-sized statistics. Let’s try to get the situation to date into
perspective.

In 2006, according to figures published by Zenith Optimedia and eMarketer, mobile advertising was
0.36% of global advertising spend or £1 in every £278 spent. Internet advertising in total was 8.1%
or 1 in every £12 spent.

In fact, in most global ad surveys, mobile advertising is not even broken out as a separate category
in the summary tables. This omission is not just indicative of size but of a mindset: that mobile
advertising is an “add-on” or “subset” of Internet ad spend, as opposed to a medium in its own
right.

So why hasn’t mobile advertising and marketing flourished to date whereas PC-based Internet
advertising is predicted to overtake outdoor and radio advertising in global importance in 2009?

Some of the problems are to do with the quality of the user interface: SMS advertising being
restricted to 160 characters and the dark, small, simplistic appearance of many mobile screens of
the 2G and 2.5G generations, has undoubtedly had an impact.

This mobile user experience however is rapidly improving. 3G handsets and Smartphones have
been showing annual compound growth of 70% over the last 5 years and the worldwide population
of data-capable “feature phones” will reach a total of 1 billion this year.

Celltick Technologies (UK) Ltd.

Hesketh House 43-45 Portman Square London W1H 6HN United Kingdom
www..celltick.com | +44 20 7969 2728 | marketing@celltick.com
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 July 2008

One dramatic and shining example of how quickly intuitive navigation can increase usage is
Apple’s iPhone. According to O2, 60% of iPhone users in the U.K. are downloading the equivalent
of 25 YouTube videos a month, compared to less than 2% of comparable users of other handsets.
The phone turns the mobile into a genuine and desirable media device, which is why certain
premium brand owners who haven’t previously touched mobiles, such as Range Rover in the U.S.,
are now using the iPhone as a medium. Handset manufacturers and Network Operators please
note. To corrupt Marshall McLuhan, “the hardware is the message”... plus the iconography.

Perhaps the world's three most talked about brands - Apple, Microsoft and Google - have all built
their value on intuitive interfaces; interfaces that are brilliant at understanding consumer needs.
Mobile now has their collective attention, such as Google’s development of the Android platform,
and this is already a force for good.

However, there are other equally important factors that have inhibited mobile content growth to
date which need to be tackled.

The mobile phone is the most personal of all devices. One might even describe it as “intimate”.
Losing your mobile is as traumatic as losing your wallet.

This intimacy makes mobiles the sharpest double-edged sword in modern media. If you abuse the
intimacy as unwanted SMS text campaigns have done, you switch consumers off in droves. If you
at the very least respect the consumer’s desire for privacy and self-willed choices, and at best
practice that art of seduction known as good marketing, you can reap huge commercial rewards
with mobile marketing.

Added to this issue of “mobile space invasion”, is the slowness of the data interface. It takes an
average of 10 to 12 clicks to get to the content you want via WAP. In an impatient age these factors
are more than just a drag.

There is a problem with creative effort. Mobile content providers, and agencies producing mobile
ads, have often adopted a lazy and unfocussed approach to their medium to date. Banner ads and
mobile magazines, to take but two examples, have been a “cut and paste” from their physically
bigger brother media: like squeezing an elephant into a Mini.

No new medium has ever destroyed the media that preceded it, despite all the hype when it
launches. Television didn’t kill either cinema or radio, for example.

Similarly, no medium ever succeeded without making full use of its own special characteristics and
strengths: it’s DNA.

So far, mobiles have succeeded at five services: voice calls, text messaging, ringtones, wallpapers,
music and cameras. How can they extend this success to Mobile Advertising and Marketing?

The first thing that needs to be tackled is the means by which consumers access content. In a
recent piece of research using a very substantial sample, Orange asked consumers to rank all
Mobile Marketing mechanisms. SMS Marketing came out worst; and Idle Screen Advertising
Services and location-based ads came out best.

There are over 3 billion Idle Screens of mobile phones - the screen on your phone when there is no
active function - and phones are unused 90% of the time. Used in the right way, these screens are
therefore the biggest, unused media asset in the world. They can be transformed variously into an
emergency warning system, a news and sports broadcaster, or mobile billboards and shop
windows on to a world of content.

Celltick Technologies (UK) Ltd.

Hesketh House 43-45 Portman Square London W1H 6HN United Kingdom
www..celltick.com | +44 20 7969 2728 | marketing@celltick.com
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 July 2008

A leading example of the right way to maximise the idle screen is LiveScreen Media from Celltick
(short for cellular ticker).

Celltick operate a platform that continuously broadcasts content and advertising messages in
“teaser" format, simultaneously to millions of a network operator’s subscribers while the handsets
are in idle mode. The teasers are in the form of a ticker tape broadcast which takes place on a
spare frequency such as the pager channel.

By pressing a response key when they see something of interest subscribers easily and intuitively
respond to advertising or content messages and are diverted to the Internet, SMS, voice calls or
any other platform.

The consumer gets to the content they want within 2 clicks, as opposed to the usual 10 -12 with
search. The content in the "teasers" progressively personalises itself to the individual user
depending on the choices they make across defined categories such as sport, news and trivia.
20% of the content is kept as serendipity however to allow for changing consumer tastes. This
prevents personalisation tipping over into stereotyping which turns consumers off.

It works well because it allows the consumers to choose mobile content on their own terms in a
simple manner: similar principles to those of Google as a search engine. It feels like a “pull
medium” even though technically it’s a “push” medium.

80% of users keep the service on; 35% click regularly on the teasers and there are 8 average
transactions per month by each active user. Recent trials have shown that this can be increased to
10 per week by good & experienced/ dedicated content management.

So how can marketers, media planners and agencies maximise opportunities available on
mobiles?

Media planning agencies, as the recent restructure of Mindshare proves, are trying new and radical
strategies to add value to their offer and avoid selling a commodity service.

The first action required is to stop thinking of mobile as a sub-set of digital / internet advertising but
rather to treat it as a medium in its own right. There is some evidence of this happening already
with the appointment of Directors of Mobile in many of the big media planning companies, plus
acquisitions such as Starcom Mediavest buying Phonevalley in order to make it the mobile
marketing arm of Publicis Groupe Media.

Secondly, comes an intelligent approach to data analysis. Mobiles offer a media planner either the
ultimate in intelligent planning knowledge or a paralysing overload of data. This is the art of the
intelligent media planner. Using services such as Celltick’s, you can analyse mobile marketing and
advertising responses not only by time of day and week, but by content category or message type,
and also by the demographics and psychographics of individual users, by handset type, and
increasingly by individual cell-based location.

What is required, as in other media, is to detect usable patterns of data. Rather than drown in a
sea of statistics.

Let’s start with some basics.

Orange’s survey, and others, shows that mobiles are the most accessed media channel of all from
noon to 6 p.m. on a weekday. This may be logical - mobiles can be used discreetly and anywhere
during working hours - but very few media planners may yet be acting on this knowledge.

Celltick Technologies (UK) Ltd.

Hesketh House 43-45 Portman Square London W1H 6HN United Kingdom
www..celltick.com | +44 20 7969 2728 | marketing@celltick.com
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 July 2008

There are certain shared social needs that can be predicted by media planners and used to place
effective advertising-funded mobile content such as football trivia on Saturdays or amusing virals
on the Monday morning commute in to work.

Media planners will soon have the ability to offer local advertisers the ability to broadcast mobile
advertising to those consumers within specific mobile cells close to their outlets.

Certain categories of advertising seem to work better on mobiles such as automotive,

entertainment products, sports goods, and drinks. Case studies reveal specific learning that can be
shared across geographies for these categories e.g. if you want to encourage consumers to test
drive a new car, the best time to advertise on mobiles is from Thursday lunchtime through to
Saturday lunchtime, to males aged 25 to 45, within a 5-mile zone of a dealer.

Case studies also show that the fundamentals of copy rotation are often ignored in mobile media
planning. You need to severely cap the frequency of exposure of any one ad because ad fatigue is
much higher on mobiles than other media.

The evidence is that videos or banner ads should be placed before or after editorial content on
mobiles but not interstitially. Time-lengths of mobile ads are too long relative to the content they
accompany. We need sometimes to think about 5 second commercials on mobiles not even 10
seconds.

Creatives and planners in advertising and digital agencies need to see the mobile medium as their
new big challenge; the Wild West; something as fresh and challenging as the internet was when it
first started. Mobile advertising is less regulated at the moment than other media: an invitation to
experiment.

This is an opportunity to return to ideas-based advertising and not to lean too heavily on production
values. Shouldn’t that be welcomed? Necessity - or in this case small screens and limited
concentration spans - should be seen as the mother of invention.

There is an opportunity to use icons, graphics, avatars, animation rather than taking the visual
detail of filmed TV or Cinema commercials and compressing them on to a smaller screen.

Why not use text visually, play shapes with words as some brilliant press ads and billboards have
done. A picture paints a thousand words but a thousand words can be shaped into a picture.

Why not use mobiles like radio with simple visual accompaniments?

All these are creative challenges are waiting to be tackled.

Interestingly ad agencies are now fighting for digital opportunities which they see as both
increasingly important and as being handed too often to specialist digital agencies. BBH won the
“Best use of content in mobile marketing” for its campaign for Lynx in which young men could
download all sorts of content such as sound effects including a whip crack and wolf whistle to their
phones and conversational gems. This was to help them break the ice and impress women in
social situations at which mobiles are ever-present and prominent.

Mobile advertising needs the major brands and most imaginative agencies to create more of these
campaigns which cleverly exploit the unique characteristics of mobiles.

Marketers, especially clever, pioneering marketers, need to grab the mobile marketing nettle.
There is already some best practice from those few who have done mobile marketing well, such as

Celltick Technologies (UK) Ltd.

Hesketh House 43-45 Portman Square London W1H 6HN United Kingdom
www..celltick.com | +44 20 7969 2728 | marketing@celltick.com
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 July 2008

promoting a mobile campaign through billboards or flyers, on packaging or via retail displays rather
than letting it to just make headway on its own. You should also register keywords to ensure your
mobile service or content can be reached through multiple search channels on and off portal.

Practice the art of seduction. For example, you pitch your teasers on the idle screen at a helpful
not hard-sell level. In Asia, a major motorbike manufacturer succeeded in generating 110,000 leads
in 20 days by offering road safety tips on the Celltick LiveScreen ticker, leading the mobile users in
via something vital to their daily lives to then take part in a prize draw.

Once companies as skilful as Apple, Nike, Orange or Virgin start developing Mobile Marketing
campaigns that work, the rest of the marketing world will rapidly follow.

This is our collective challenge and opportunity. To turn the World’s most ubiquitous, personal and
rapidly-developing medium into the most sophisticated and accurately targeted advertising and
marketing medium.

Celltick Technologies (UK) Ltd.

Hesketh House 43-45 Portman Square London W1H 6HN United Kingdom
www..celltick.com | +44 20 7969 2728 | marketing@celltick.com
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