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Could Mobile Advertising go the same way as LBS?

We know a lot of people with exceptional levels of knowledge across a number of technical/industry areas. We figured that we could start sharing some of this knowledge with the wider public. With this in mind, welcome to the first instalment of our User Generated Content: an article written especially for us by a candidate whose experience encompasses stints developing and delivering technology marketing programmes for leading vendors in the Mobile Advertising and Location-Based Services space. Having developed and led product insertion strategies across Europe and been responsible for driving multi-million-pound revenues into the companies he's worked for, we felt he made a great opening guest author. Enjoy.

Where's my nearest Advert?

Technology continues to evolve faster than consumers' abilities to adopt, presenting them with endless ways to communicate and express themselves, numerous options to connect and a wealth of opportunities to share their lives with others. Yet, making sense of these market factors, and translating them into high margin, repeatable business is proving difficult.

In this landscape, the mobile industry continues to show promise and opportunity, but managing discovery and consumption on small devices continues to challenge both the core mobile, and mobile-enabled industries.

Building on this premise, this article asks whether today's mobile darling, Mobile Advertising, is likely to suffer a similar fate as the once much loved LBS.

At first glance the similarities between Mobile Advertising and LBS seem few and far between. But take a look at market forecasts, press releases and industry expectations. Anyone that lived through the early years of LBS will undoubtedly begin to feel nauseated with a sense of déja vu, as they compare and contrast the actual vs. predicted LBS revenues and the $14bn Mobile Advertising forecast.

Today LBS is being reborn simply as Location, and as an enabler, or enhancer, rather than a product in its own right, and it still attracts significant analyst attention. Like most innovations in mobile, Location may live up to its promise almost a decade after the hype began, and again, like most, it's likely to triumph in areas that it was never designed for in the first place - just think back to the short messaging tool designed to help radio engineers in the field.

Looking deeper into the history of Location, we can find more lessons to be learnt. Subscriber location information was seen by the Mobile Operators as proprietary network technology that could be sold at a premium. Why anyone would use it was not really known, but there was an "if you build it they will come" attitude that drove operators to spend millions developing over-engineered solutions to manage the extraction, control and sale of this valuable data.

Hundreds of man-years were spent defining the technology, business model and mark-up for Location but, without any basic understanding either of how it would be used or why anyone would pay for it, the models drifted towards architectural excellence and commercial infeasibility.

If you throw into this mix an industry that was moving from being technology driven to market driven, with an immature technology and a lack of marketing experience, you have a service that can tell a user they are near a landmark that they're can't find, and charges them a princely £0.50 for the privilege.

That's the kind of experience that attracted, and subsequently repelled, thousands of users.

At last, thanks in a great part to the awareness and education given to both the consumer and the industry from the likes of Nokia, TomTom, SiRF and Qualcomm, Location is being seen once again as something of value, and with the benefit of a decade of experience is being packaged into propositions that make sense, are relevant and add value to the consumer.

So the question is, can we wait ten years for Mobile Advertising to begin making its impact? If not, what can we learn from experiences like that of Location?

Right now there are two well-established industries colliding with each other, desperately trying to make sense and money from the promise of Mobile Advertising, but often completely misunderstanding each other's markets and objectives. Technology is offered by hundreds of companies, large and small, claiming to enable nothing less than clairvoyance, for a minor infringement of personal liberties.

The short term casualty of this collision could well be the consumer - if this happens let's reconvene this discussion in 2017 - however, in the meantime, it's of utmost importance that these industries spend time developing an understanding and capability that sits in the hybrid world of Mobile and Advertising to deliver relevance and value to the consumer.

Whilst, in the future, we may very well be able to offer discounts on headache medication to supporters of the England football team forty-five minutes before the end of their historic world cup victory. Until that day comes, we must focus on the small, simple steps that add immediate value to both the consumer and industry, carefully balancing market needs against the lure of clever technology.

Unlike Location, Mobile Advertising has sponsors that do understand consumer needs and desires, so I have no doubt that Mobile Advertising will happen. The question is: Who stands to take control of, and therefore dominate, the value chain?

Scott (our author) is currently available for Permanent and Contract work, please click here if you're interested in more information on this candidate.

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