Location, coupons, rich media and privacy: Russell Buckley talks mobile advertising

It’s the last Friday of the month, and here on GoMo News that would usually mean one of our Female Friday feature interviews… but this month, we’ve got something different. Mobile advertising veteran Russell Buckley talked to us about the present state of the industry, and what he thought would be the exciting developments for the near future.

As Global Chairman of the MMA, and VP of Global Alliance for AdMob, you spend more of your time looking at the entire world of mobile advertising than most. Do you think any region is emerging as a clear leader in mobile advertising?

Just a quick update on my two roles. I’m actually Chairman Emeritus of the MMA – you can only stand for a year as Chairman and then you automatically become Emeritus for a year. As you know, Google acquired AdMob last year, so my official title is now AdMob Evangelist, at Google.

But yes, absolutely I’m in a great position to see what’s going on.

As a new medium emerges, the natural evolution is that advertisers follow consumers and the more consumers there are, the more advertisers want to reach them. As far as mobile web and application based advertising is concerned, this has also been the pattern, so regions with a lot of consumers tend to lead the way.

The major influence on consumers using the mobile channel has tended to be the availability of flat rate data pricing, or at least affordable data pricing relative to the market. Other factors can be the English literacy of the consumer base – much of the content is still in English – and the lack of availability of broadband connected PCs, which boosts usage of mobiles.

What that actually means today is that the US leads the way in consumer usage and thus advertising inventory. Added to this is the relative sophistication and maturity of the digital advertiser and we can see a clear regional leadership.

However, in relative terms, the UK, South Africa and India are also very important and of course, Japan is very big too.

As 2010 progressed, a definite trend developed where many advertisers called for more “basic” mobile advertising. The popularity of application, browser and smartphone based advertising (what you might call 3G advertising) has influenced a serious growth in advertising based around older network technologies like cell location and SMS (what you might call 2G advertising). On a global scale, do you think there’s a possibility that 2G advertising will become a more powerful revenue earner than 3G?

I’m not aware of any advertisers calling for “basic” ads. Actually, quite the opposite, with rich media being heavily in demand at the moment.

There are quite a few vendors promoting permission-based campaigns however, including operators working either on their own or with partners.

I’d say that what you call 2G and 3G advertising actually have different roles in marketing and are complementary. 2G is very good for building a relationship with existing customers – but no good for customer acquisition. In fact, smart 2G mobile marketers will use 3G to help acquire their database of customers in the first place.

However, I also think that a lot of 2G marketing is still being done poorly – in these instances you have to think of your advertising as your editorial, which requires a different mindset. Plus it needs to be thought of as an ongoing, interesting and engaging two-way conversation, not a channel in which you can throw down any promotional offer when you happen to have one available. That will just lead to high churn rates among the hard-to-acquire customer base, with the added problem that they won’t come back.

As far as volume is concerned, I think 3G marketing will be the clear leader for a long time to come, at least on a global basis. Not necessarily because it’s better (it’s just different) but because of scale. If you wanted to run a 3G campaign this afternoon with global, regional or even with extensive reach in one local market, you could do that. With 2G, it has to be a market by market approach and even then, there isn’t deep reach.

The nature of the value chain means that this is going to be the case for the foreseeable future.

For years, people have been talking about “the year of mobile advertising” – it’s hard to argue that they were finally right this year. In your mind, who are the real winners in 2010?

I spend a lot of my time telling people that there never will be or was a year of mobile advertising! I mean, when was the year of the TV or the car?

That said, it has been a great year and we’re certainly well in to the decade of mobile advertising.

The winners I can see are the specialist agencies, who are building up scale and expertise that will make them invaluable when they get acquired – if they haven’t already. It’s also a great time for App developers to both launch their successful and lucrative Apps and branded Apps for advertisers and publishers.

The early adopting clients have also won, as their experiments in the last years pay off and their larger budgets lead to larger ROI.

Finally, if you’re reading this, you’re probably a winner too. There’s a dearth of people who know enough about mobile marketing and that’s going to get even more acute next year.

What should people watch out for in 2011?

More rich media, experiments with location-based advertising and Augmented Reality, as well as scalable mobile couponing.

Mobile advertising is possibly the most flexible of all advertising forms – because it can connect to the internet through browsers, and to the real world through barcodes and shortcodes, mobile can integrate with pretty much any other marketing discipline. Is there any intersection you’re particularly excited by?

I think when we have an automated mobile coupon redemption mechanic, we’ll see the potential for serious budgets from the FMCG sector – interestingly, a high spending sector that hasn’t maximised its spending via the PC channel.

Currently, I’m not really aware of a scalable coupon redemption mechanism that actually works in the real world – certainly without a massive technology upgrade at the point of sale.

In general, I’ve always been excited by the idea of the mobile as a bridge between the analogue and digital worlds and I think we’ll see a lot happening in that area now.

The very notion of privacy is being challenged by services like Streetview, and in particular by location services. Do you think that a backlash is building against “invasion of privacy”, or will consumers readjust to what privacy means in the connected age?

I think it’s very important that anyone who plans to enter the location space (or any other controversial service) has to be very careful about how this is implemented, explained and communicated. Having said that, it’s not up to individual companies to tell society what these new rules should be, but for society to tell them what is acceptable at any one time.

As an example, Eric Schmidt has said recently that facial recognition technology works well and could be rolled out today. However, Google believes that society isn’t ready for this and won’t deploy it until (or even if) it’ll be acceptable to do so.