Alcatel-Lucent is entering the mobile advertising market with Optism, a hosted platform for mobile operators that will let them send personalized ads to subscribers, the telecom vendor said on Tuesday.
The mobile advertising space is increasingly crowded, but mobile operators will have a role to play next to companies like Google and Apple. The biggest opportunity for operators is using SMS (Short Message Service) and MMS (Multimedia Message Service) for advertising based on user preferences, according to Lisa Ciangiulli, director of marketing at Alcatel-Lucent Global Advertising Solutions.
SMS and MMS ads could be a way to lower mobile-phone costs or for users to get offers tailored to their interests, which they may actually want to receive.
Alcatel-Lucent wants to become the middleman between mobile operators and advertisers, including aggregating ad space from multiple operators. Besides the hosted platform, Optism includes a media arm, which has hired staff from Blyk, an SMS marketing pioneer, that will help operators sell advertising space, Ciangiulli said.
Operators will pay for using the platform and related services by sharing the advertising revenue with Alcatel-Lucent, so operators don't have to spend money up front and can get started faster than if they were to do it themselves, according to Ciangiulli.
If handled correctly, SMS and MMS can be very effective, simply because they are compatible with both the cheapest and most expensive phones, according to Nick Lane, chief analyst at market research company mobileSquared.
For advertising via SMS or MMS to work, users have to be in control of who can send messages to their phones, according to Lane. If users start receiving messages that aren't relevant to them, they will start seeing those as spam and start ignoring them, he said.
Ciangiulli agrees: Getting permission from users before starting to send ads via SMS and MMS is very important, she said. Eighty-one percent of 13- to 17-year-old users found it extremely or very important that they be asked for permission before being sent messages, according to a survey Alcatel-Lucent conducted last year of more than 2,100 teenagers in 11 countries.
Using the new service, operators would offer users an incentive to sign up and ask a couple of questions about personal details and interests, according to Ciangiulli. The answers would be stored in a personal profile that users can access and change or delete if they don't want to participate anymore, she said.
A campaign could, for example, be a lunch offer where users get an SMS that lets them pick between a healthy and a meaty offer. The user would choose and then receive a coupon, according to Alcatel-Lucent. Because the operator is controlling the service, it can waive any fees for replying. That's important, because users don't want to be charged for advertising, Ciangiulli said.
It's also important that users don't get flooded with messages. The tolerance level is about three messages per day, according to Alcatel-Lucent's survey.
Alcatel-Lucent is working with Orange in Austria, which will be rolling out the Optism platform. It is also talking to other operators around the world, but is not yet ready to provide details.