ME and Saffron Digital convened a group of executives from across the value chain to discuss video and mobile advertising. Tim Green chucked in a few questions and compiled this report…

Tim Green: How do you sum up the health of the mobile ad space?

David Fieldhouse (Mediacom): Right now, mobile is a poor version of online. We still don’t have the measurement. Buying a banner on MSN mobile is less accountable than buying one on MSN online. That’s the reality.

Shashi Fernando (Saffron Digital): Ultimately, though, you’ve got to remember that online advertising took 20 years to get where it is now.

Nicholas Wheeler (ITN On): We need to provide demographics and data that advertisers can get from other media. If we can do this, we’ll be better than everything else. I mean, you buy an ad on TV and you don’t now whether someone’s watching or making a cup of tea. With mobile we can guarantee that engagement.

David Fieldhouse: Right – one device, one person, one location.

Tim Green: So, are legacy systems in the operators the barrier to getting these metrics out?

Shashi Fernando: I don’t think so, not now. We can plug our platform in and it aggregates the data and knows a person’s behaviour and location.

Neil Andrews (3 UK): The issue is more one of privacy. Everyone is being very cautious. Our primary business is the network. Trying to turn that round will take a while.

Nicholas Wheeler: It’s just due process, it always takes time.

Alex Rahaman (Unaminis): On the web you don’t have a privacy issue, because Comscore does a panel to tell you about typical uniques on a site. Until someone can do the same on mobile, there will be no way to know the difference between sites, and until then, why would you buy mobile ads?

Neil Andrews: This is what we’re doing with the GSMA.

Alex Rahaman: Off portal too?

Neil Andrews: We’re looking at that. The GSMA is meeting twice a month on a proof of concept to take data, aggregate it and feed it back to brands. It will be actual data, not panels, with the basic info free and the rest in packages.

Ben Tatton-Brown (Ring Ring Media): We shouldn’t get away from the fact that there is a market now. In four months, we’ve booked $1 million of advertising. It’s about direct response for our clients. I agree we don’t have metrics, but it’s still a market that demonstrates to a client that they can generate X amount of subs or sales and it works for them. That makes it quite a big industry in itself.

Tim Green: But aren’t the advertisers mostly mobile companies. Aren’t we just talking to ourselves?

Ben Tatton-Brown: I don’t disagree with that. Obviously we’d like to encourage more brands, and for that we do need more transparency and metrics.

Matt White (Yahoo): The big banks were starting to spend, till their budgets got slashed. They’re close to committing. For the most part, mobile is great for branding and mobile consumable goods right now. The truth is, David [Fieldhouse] is only one of ten major agencies dedicated to mobile.

Tim Green: Is mobile advertising still too expensive?

David Fieldhouse: CPMs have been very high, ludicrously high.

Matt White: They are, but having said that pre-roll video gets you access to bigger budgets because agencies are making 30 second spots on other channels and you get access to their budgets. I was getting campaigns worth £30,000 from the TV boys – a relatively small amount for them, but it was my whole spend for one client.

Alex Rahaman: The iPhone has made people realise they can watch video and that there are opportunities to advertise either side of it. Generally we’re waiting for some industry standards to emerge, just like with web buttons and banners. The market needs to be commoditised.

David Fieldhouse: The reality is 25 year-old buyers in agencies are being offered 23 millon people online at £15 CPM with cookies and so on, while mobile charges three times the amount for ‘we can’t tell you much’.

So, yes, we have done mobile campaigns with major brands, but only where they tell us ‘we understand the limitations, but it's an important emerging channel and we need to have some learnings now.’

We’ll get there, though. The mobile internet will be huge, we all know that. I’ve been in 15 client meetings planning for 2009 and they’re all interested in mobile. Implementing it – that’s the dark art.

Tim Green: Are we seeing more creative ideas for mobile advertising and video?

David McDonald (Saffron): We’re working with customers on mobile video overlays, and click to video from banners. We’re getting up to seven per cent click throughs. We have to over-impress media buyers to make up for lack of data.

David Fieldhouse: We’ve got clients looking at video campaigns using viral bluetooth. The location based Terminator app was the best I saw. 20:20 London took it really seriously and it worked brilliantly. But will every client do it? No. Will they take a 30 second TV ad and compress it. Probably.

Shashi Fernando: We can serve the same advertising campaigns across different channels, and do time sensitive ads…

David Fieldhouse: That’s interesting to me, and if you explained it to my clients, they’d probably love it. But it feels like cart before horse. It’s three years away. 3G at minimum needs to be there. You’ve got to have the installed base.

Nicholas Wheeler: It was the same with radio, but then they made it sexy, created awards and so on. And it became a great creative medum. I realy think we can be creative in mobile in ways that can’t be imagined yet. We have to sell that vision to the young lad in the agency.

Joe Brahman (Turner Broadcasting): Right. The key will be to convince people at the lower end of the organisation. The guys at the top, they just see the margins that are so high on TV.

Tim Green: In terms of inventory, where’s all the traffic going – especially with mobile video?

Shashi Fernando: People should be able to watch video anywhere, but if operators let that happen, then they cut themselves out of te chain.
If they lose out that’s bad for everyone.

David Fieldhouse: The networks have a billing relationship though. That’s different to AOL and the ISPs.

Tim Hussain (Sky): No, it’s we that have the billing relationship. We’re processing 2.2m credit cards a month. But we don’t take 40 per cent of the revenue from our partners. I still think there’s a lot of similarity between operators now and ISPs early in the decade. It’s difficult for them. I was at AOL, so I’ve been through the walled garden, through making it hard and then easy for people to get off-portal, and finally having to sell that bit of the business. But I’m interested in what is good for the consumer.

Shashi Fernando: And that’s free data, surely.

Tim Hussain: Well, it’s never free. You always pay someone for access.

Shashi Fernando: But it’s a tricky one. All operators face issues of capacity, latency, affordability for them and everyone else. They have to find a business model that works. I don’t think they’ve found it.

Alex Rahaman: The trouble is that the 80 per cent of users not on flat rate data plans end up being penalised.

David Fieldhouse: Right. The core consumer is on pre-pay in most territories, so it’s most expensive of all for them to access what we have to offer. You can be in meetings with clients and the minute they know you’re going to charge consumers, you’ve lost them.

The Participants:

James MacDonald, O2 (Europe)
Neil Andrews, 3UK
Tim Hussain, BSkyB
Matt White, Yahoo
David Fieldhouse, Mediacom
Nicholas Wheeler, ITNOn
Joe Braman, Turner Broadcasting
Alex Rahaman, Unaminis
Ben Tatton-Brown, Ring Ring Media
David McDonald, Saffron Digital
Shashi Fernando, Saffron Digital