More advertising impact with mobile
Mobile Advertising: Cell phones are not yet a gold mine as advertising media. But when it comes to response rates, they are likely to soon replace coupons and email.
Network operators skim off the top
But one person warns: Moritz Wuttke, Head of Business Development at PubliGroupe. "The network operators earn the money, third parties receive at most 60 percent," he criticized at the publishers' conference in Thun. This percentage is not bad by international standards. But it usually has to be shared with an IT service provider and a content provider. That leaves a maximum of 30 percent. Wuttke's conclusion: "Realistic publishers know that you can't get rich with SMS in the first two years." Nevertheless, he considers mobile communication to be an indispensable tool for publishers. This is because SMS can be used "extremely well" for reader marketing, especially with young target groups.
Wuttke essentially distinguishes between four interactions in mobile. In the first case, the consumer sends an SMS because they are taking part in a game or voting. In the second case, consumers receive text messages because they have subscribed to a certain service (e.g. traffic jam reports). In both cases, this costs between 50 centimes and 1.50 francs per SMS. In the third case, the consumer sends an SMS to order something. This is possible with or without an SMS surcharge. And finally, they can call up chargeable information (weather, stock market prices).
However, Wuttke is less optimistic about the short-term opportunities for MMS. On the one hand, the content is much more expensive to produce, but the revenue share remains constant (25%). Secondly, the distribution of MMS-enabled cell phones is still too small. Although their share in Switzerland is 27%, only a quarter of these cell phone owners actually use MMS. With UMTS, a technology that Wuttke sees little future in, the costs for consumers would rise by a further 100 percent. In addition, UMTS will face competition from other wireless technologies (Wi-Fi) - which will at least significantly reduce data transmission costs.
P offers full mobile service Publicitas also entered the mobile market two years ago - with Quickandmore (Q&M). Q&M is an additional service for advertising customers and publishers with the aim of making the advertisement more versatile, interactive and therefore more attractive. For example, if an advertising customer wants to place an advertisement with a competition and an SMS number, P offers Q&M to handle, receive and evaluate the SMS - for an additional charge of CHF 2,000 to CHF 10,000 - similar to a direct advertising agency.
It is also possible to provide content, whereby P purchases this externally. Publishers can also take part in other activities, such as voting and games, which are embedded in the editorial section. Does advertising via SMS not play a role for the P? No, because for technical reasons it is not possible to integrate banners into an SMS (see interview).
The situation is very different in Japan. Takashi Ishioka from the media group Asahi Shimbun Company (publisher of the daily newspaper Asahi Shimbun with a circulation of 12.3 million) explained at the publishers' conference that his company generated a turnover of half a million Swiss francs last year with mobile banner advertising alone. However, Asahi generates the majority of its mobile sales (17 million Swiss francs) from subscription-based services, games, downloadable images and ringtones.
The strategy behind this is as follows: because Asahi offers access to the various services at an extremely low price (CHF 1.50 per month), the Group has already recorded
1.2 million subscribers (one percent of the Japanese population). Of these, only 22 percent are also Asahi subscribers, 38 percent subscribe to other newspapers and 40 percent do not subscribe to any newspaper at all. Asahi has therefore gained access to people outside its existing customer base.
SMS as an introduction to print
Building on this, mobile subscribers will be able to access the
Asahi online archive, which is now used by 35,000 people. Finally, subscribers are also offered an Asahi print subscription via SMS, which has brought in as many as 7600 print subscribers in the last five years. Above all, however, the Group has managed to keep the younger generation on board in this way.
And what Ishioka particularly emphasizes: Different age groups can be addressed via the print, online (Asahi.com) and mobile channels: Mobile appeals to young people, the Internet to 30 to 40-year-olds and print primarily to the over-50s. But one thing stands out: Unlike in Switzerland, text messages are not used in conjunction with advertisements. The two channels remain largely separate.
Mobile growth market: information, games, services - but cell phones are not suitable as an advertising medium for the time being.
MusicStar goldmineA call to MusicStar costs 70 centimes, half of which goes to SRG - the other half goes to Swisscom. The phone calls from MusicStar fans earned SF DRS four million francs. A total of 11.3 million calls were received. On average, each participating person called four times per vote. (mk)
"SMS makes advertisements more attractive "Moritz Wuttke from PubliGroupe on the importance of mobile advertising.
WW: MusicStar has shown it: Media companies can generate additional revenue via telecommunications, especially via SMS. How great is the potential in Switzerland?
Moritz Wuttke: That's difficult to say. Because the majority of SMS traffic is from person to person. This market is difficult for publishers or content editors to reach. However, there are examples where a publisher has managed to integrate consumers into a kind of virtual chat and thus divert some of the SMS fees to itself.
How big do you think the potential of actual business traffic is? In this area, however, at least 50 percent or more of the revenues remain with the network providers. Another 25 percent goes to the service providers and the last 25 percent to the initiator, in the case of MusicStar to SF DRS. We estimate that at least 50% of the revenue generated by network operators today thanks to third-party providers comes from adult content. Only then come ringtones, competitions, games and polls such as MusicStar.
How big do you estimate the turnover from banner advertising on cell phones in Switzerland to be? it is practically non-existent because the end devices here are not designed for this form of WAP advertising or I-Mode. Swisscom and Orange have now introduced a second WAP version in which the user no longer uses the cell phone to send SMS messages, but to surf the Internet. The latter is the basis for bringing banners to cell phones. In Switzerland, however, we are three years behind Japan. And it is doubtful whether WAP technology will gain a foothold in Switzerland. Because next year, devices with larger screens and the ability to surf online will be coming onto the market. There will no longer be a need for a WAP portal. And then advertising on the Internet will also be visible on cell phones. Until then, this type of advertising cannot be marketed in Switzerland.
With Q&M, the mobile offering from Publicitas, you leave the path of traditional advertising sales.
Yes, with this approach we want to make print advertising more interactive. In this respect, Q&M is a service for publishers and advertising customers and not a sale. With Q&M, the advertisements are provided with added value, making them very attractive and more competitive compared to new electronic media, because the reach of the daily newspaper is coupled with a rapid response option.
How much turnover does P currently generate with Q&M? Net turnover (excluding the publisher's share) amounted to around CHF 0.5 million in 2003. That's not much compared to the overall advertising market. But it represents a growth segment, so that in five years we will reach around five to six million francs. Interview: Markus Knöpfli
Markus Knöpfli
