Who Will Take the i-mode Lead in Europe?

Conrad Yiu, director of development at London-based Carbon Partners, a mobile content developer, said last week that the difficulty with using the wireless Internet as a marketing and promotion platform is the grey area mobile marketing and mobile consumer services crossover. He agreed that, even in Europe, or at least the UK, mobile users should be willing to pay for “marketing messages” that are fun and cool. “That is the holy grail for the brand or media owner. I guess the same idea of US college kids who wear their sweatshirts with the college name on it,” he added.

Of course, the problem is how to get this marketing platform up and running - in other words, who will pay to coordinate the creation of the platform, the content, and the services that will attract the huge pool of to-be-marketed-to subscribers. In Japan, that was DoCoMo.

The issue, as he sees it, is that in the former, the client advertiser or marketer traditionally pays for the marketing, whereas in the latter, the end-user pays. “We have now this conundrum,” he said, “of end users paying to be marketed at; or more to the point, that the mobile Internet has allowed this conundrum to occur.”

Conrad explained that in the UK, the “dreaded” situation of forcing the mobile end-user to pay is referred to as the “self liquidating campaign.”

I agree that this is a conundrum, but the Japan experience can be useful for establishing a benchmark of what amount mobile subscribers will or will not pay to be marketed to. In Japan, who pays for what and who receives which revenue is clearly delineated. Subscribers pay packet and content fees to carriers who in turn share most of the content fees with the providers. So, the subscriber pays 100% of both the service costs and the marketing cost, since, in theory, the provider is free to market as much as possible to their subscriber audience.

DoCoMo realised that this could cause the self-limiting problem Conrad mentioned, so, at the start of i-mode, they established and enforced rigid requirements on what the providers could do. Banner ads were forbidden, as were text ads or any HTTP links off the provider’s official site.

Of course, DoCoMo couldn’t police what providers wrote in text on their sites, and in particular could not police the content of mail magazines targeting mobile subscribers, so providers did find a way to send ads, marketing, and promotional material to their subscribers (at the subscribers’ expense).

Of course, this material wasn’t just regular cheesy ads like you find on late-night TV; they were carefully contrived marketing campaigns involving contests, drawings, prizes, at other fun, participatory events, so the subscribers rarely felt cheated and in fact really enjoyed participating. It’s kind of fun to get an mail announcing “Only two more days until our grand prize drawing!! Have you registered to win yet?” when you’re standing on the platform waiting for the train to arrive.

And, yes, the subscribers paid the content fee and the packet fee to receive this stuff. By around mid-2001, everyone realised that banner ads (”picture ads”) were not the non-starter that everyone feared. DoCoMo agreed to allow banner ads on a limited basis, and they really took off. And no one complained.

Now, there are no restrictions on banner ads or on where they can link; providers use ads, mail, Web pages, images, and ring tones as marketing tools; the subscribers pay for it all (because it’s fun and entertaining); and DoCoMo rakes in the packet fees while providers sell all sorts of off-line goods and services.

Even in Japan these sorts of campaigns would become “self-liquidating” if they weren’t so damn fun - or if subscribers didn’t get a cool ring tone or other freebie, or if the tone and quality were reduced to the level of cheap street-level handout flyers. They’re not - they’re sophisticated, fun, and entertaining.

Another huge factor is that the packet fees are really cheap; you have to use a lot of packets before you get a rather stiff bill at the end of the month so, by and large, subscribers don’t self-limit or self-meter.

Conrad agreed that, even in Europe, or at least the UK, mobile users should be willing to pay for “marketing messages” that are fun and cool. “That is the holy grail for the brand or media owner. I guess the same idea of US college kids who wear their sweatshirts with the college name on it,” he added.

Of course, the problem is how to get this marketing platform up and running - in other words, who will pay to coordinate the creation of the platform, the content, and the services that will attract the huge pool of to-be-marketed-to subscribers. In Japan, that was DoCoMo and the other carriers; only they could afford the investment (and only DoCoMo had sufficiently low coordination costs, so they took the lead).

I wonder who is taking a similar lead in Europe? Will it be the DoCoMo partners (KPN, E-Plus, et al)?

– Daniel Scuka

Mobile Marketing is the Mobile Internet
WWJ Newsmagazine, No. 89, February 17, 2003