Wireless Week recently spoke with Patrick Lopez, chief marketing officer for Vantrix, about the state of three-screen convergence and trends the company sees in mobile content and mobile advertising. The company recently won the Frost & Sullivan Premium Mobile Content Optimization Solution of the Year award and was short-listed for the Mobile Entertainment Forum’s TV & Video Service award.
WW: What are you seeing in the convergence space right now with television, computers and mobile devices sharing the same roles?
Lopez: It looks like there is a trend, which is accelerating to merge a bunch of multimedia services together, services born both from the Internet and television world, then put in a mix that’s accessible across three screens.
Wireless operators have the mobile screen and they have their Web portal. Traditionally, they’ve been using their Web portal for customer care, but not really for content consumption. Video is changing that. If you acquire rights for mobile television, you might as well have Web television. All of those services – mobile TV, video-on-demand, downloads, podcasts, user-generated content, mobile advertising – were seen until pretty recently as separate services, but more and more we’re seeing them as together, as elements of the ecosystem.
[Wireless operators] are more used to the mobile consumption of content. They’re forced to consider with the increase in mobile video to expand that, and also have their Web portal be where people consume content.
Cable operators are almost the opposite. They’ve been used to selling content and advertising on the television and PC screen. Now cable operators are more and more interested in the wireless space. They are going at it by purchasing spectrum and licenses and becoming wireless operators, but the wireless space is much more complicated from a technical standpoint because of network variations, device capabilities, media formats.
In the wireless space, the challenges are more around monetization. They have very little clue as to how to monetize it, how to expand their offering onto a PC screen. If we take advertising as an example, cable operators sell airtime. They’re set up to do that. Mobile operators are not set up for that. They don’t have the infrastructure; it’s a nascent market for them. They’re behind the curve compared to the cable operators. As they expand toward the PC screen, the business model is going to be different. Advertising is going to have to be in the mix to expand and support that business model.
WW: There’s been a lot of talk around mobile advertising, and now Alcatel-Lucent has jumped on the bandwagon. Where do you think the market is at?
Lopez: We’re past the hype stage, where everyone was talking about it and no one was doing it. Vodafone has been piloting mobile advertising in a couple of their markets, and they’re going to expand it to 18 markets. The success of mobile advertising is on the increase.
As far as advertising is concerned, again the challenge for mobile advertising is that mobile operators are just getting set up from an organizational standpoint and that business models are not yet finalized.
Now the network operators are tackling the overall challenges that need to be addressed for mobile ads to be a success. There’s going to be growing pains and a period of maturation for the business model. We’re still a few years away.
Going back to A-L, they’re doing the right thing in terms of location. One of the tenets of mobile advertising success is relevance. Relevance in the mobile world is where you are. From our perspective, what we are offering is the ability for the network operator to adapt themselves to the challenges of being able to address from an organizational standpoint mobile ads. What we have seen are a lot of concerns about privacy, exchange of data and sensitive information without going to a third party.
The scandals that we have seen up until now regarding mobile advertising involved giving the information to a third party. Network operators collect the information themselves. Carriers are going to have to do the heavy lifting of analyzing their audience demographics and behavior. They’re going to have to hire a bunch of people that they’re not used to having, acquire a skill set that they don’t have. They’re going to be forced to.
WW: Social networking has created a lot of buzz in the wireless community. Where do you see it fitting in with mobile content?
Lopez: SMS was the original user-generated content; it was just person-to-person. Most analysts concur that social networks are gearing up their wireless strategy and their TV strategy to address their demographics.
User-generated content and mobile Internet is growing. A larger portion of application-generated messages are linked to social networks.
Most analysts, including Gartner, think that as we go further, social networks are going to break out of being a pure Internet application and become more and more mobile. Twitter is leading the charge, but apps like Facebook and YouTube are contributing greatly to that trend.