Yahoo! reaches for relevancy in mobile ads

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The essence of future mobile advertising may be a combination of the fully leveraged use of demographics and interests to generate unique, relevant and offer-driven advertising which will personalise the advertising experience from first exposure to arrival at the advertiser's landing page.

This is how we at Telematics Update might sum up our recent interview with Cory Pforzheimer, senior manager, public relations at Yahoo! It's the approach which Yahoo! is already applying in its Smart Ads. In this review of recent news and interviews we look at the way Yahoo! and the mobile companies are working together to create just such a personalised experience for mobile users.

The mobile perspective

We'll begin closer to the perspective of the mobile end-user by seeing what's happening at Medio, a Yahoo! partner in mobile search and advertising.

Medio continues to enrich the mobile browsing experience for consumers and advertisers alike. It is doing so by cleverly reading the trends in mobile device usage and offering the best technologies to satisfy user requirements.

As usage patterns have changed, Medio has responded by creating partnerships and making the most of the best-of-breed services from the likes of AdMob, T-Mobile and Yahoo! In doing so, Medio is gaining from one of the main, sweeping trends in mobiles, which is more openness from operators and more partnerships with the Big Three search engines.

Medio is building logically on its technology and business base. Cornerstones of this base include the Medio backend analytics engine, which delivers focus and relevance in mobile search results; cross-client technology, which enables Web access through all browsers running on all devices; location profiling and tagging linked to Medio's Universal Search; and brokering of the most appropriate ads to display with the focused search results.

There was a dramatic shift in the pattern of mobile searches during 2008. The percentage of application downloads fell, while there was an increase in general searches. Downloads continue to make up 50% to 60% of searches but content searches now constitute 10% of the total.

Brian Lent, CEO and co-founder of Medio, comments on this change: "Downloadable content such as ring tones, wallpapers and games has historically been the most popular type of mobile query, largely driven by the fact that this is the most prevalent type of content available on carrier's decks. It is accessible to the majority of subscribers, even those who use basic feature phones.

"As mobile devices and browsing technologies have evolved, however, and as carriers open up their data plans, subscribers can now access an increased breadth of content which is more representative of the broader Internet – news, local listings, sports scores and general information. They can reach beyond the carrier's consumable content.Therefore we are seeing an increase in search queries for this 'new' type of mobile content. Searches for downloadable content have declined slightly in the same time frame, but these searches still represent more than half of all mobile queries. This is very significant for the operators since this is their own, monetisable content."

He adds, "The 2008 statistics are based on Medio's search data from various operators in North America and Europe.The queries were made on Medio's WAP-based search product or Medio's ODP (On Device Portal) products, depending on the operator."

This evolution is opening the door for Medio to offer more rewarding search functions to mobile users, and also more targeted and fruitful opportunities to online advertisers. For both groups, there are specific requirements associated with mobiles. Users generally seek a selective listing of localised search results which should not be swamped by advertising. For their part, advertisers want cost-effectiveness which mobile platforms don't always deliver.

Customising the search results

Medio claims of its service, "No other company takes search to this level of personalisation and relevancy." Factors such as the Medio analytics and its partnerships with T-Mobile and Yahoo! lend credence to this assertion.

What does a user want from a mobile search? One might sum it up as: "Information I can use right now, where I am." If the user is hungry in the late morning, she wants to find a suitable restaurant where she can enjoy lunch in the neighbourhood. She doesn't want 10,000 listings from all locations. Nor does she want 1,000 listings from her county or province, which is as "localised" as some searches become.

In addition she doesn't want advertising clutter in the search results or in the more detailed information she may select to browse. She may welcome an ad on the small, hand-held screen that offers a special on one of her favourite meals ten blocks away. But vaguely food-related and non-local ads become unwanted intrusions that interfere with her search and could also add unwelcome bandwidth costs.

Medio's Universal Search can deliver federated content, which means the content may be drawn from the entire Internet, not just one carrier or search engine. It doesn't work quite like the federated content that may be received from Yahoo! As Brian Lent says, "There are significant differences in how Medio approaches the mobile search experience and presentation of these search results."

By creating its mobile search from scratch, Medio has deliberately adapted the Web search experience to mobile devices. Specifically, the results are easy to select and view, and relevant to the user – in short, they are personalised. At the same time, Medio differs from its competitors by offering the full range of mobile content, including the operator's own downloadable content (not available from Yahoo!) and broader federated results. The federated information could encompass weather, news and traffic data as well as Facebook, YouTube and Amazon. Medio is neutral, a "white-label provider", with the freedom to offer content from the best of everything that consumers search for, not just the offerings from a single provider or engine.

"At its core, Medio is an analytics company that has best-in-class technologies to match search results and content with user preferences and understand subscriber intent," says Lent. This combination of analytics and mobile focus is designed not only to personalise the search experience but also to offer value for money to advertisers.

Medio and its partners work closely to optimise the data which customers can locate. Lent says they further enhance the search and advertising experience by learning from the searches conducted by users. Medio applies its analytics skill to assess search behaviour, subscriber preferences, what type of device is being used, where it's being used, and other demographics. "These analytic personalisation and recommendation technologies are revolutionising the content discovery experience on mobile. They are fundamentally different from other Web experiences," comments Lent.

The user and the operator both have to contribute to any effective search. For the user, the key search criteria are location and keywords (such as "MyTown restaurants"). The operator must tailor the search results to the specific device, making use of analytics and meta data on the operator's content.

The Medio technology extends to voice searches similar to Google's new voice search system. Medio partners with best-of-breed providers to deliver voice recognition capabilities including the ability to handle different accents in various languages. Verizon Wireless has been using Medio's voice searching for more than two years and it is growing in popularity among Verizon customers.

Yahoo! and mobile partnerships

The way in which Yahoo! works with partners such as T-Mobile and Medio slots in perfectly with the personalised approach to search results. For instance, says Cory Pforzheimer, T-Mobile's web2go service allows T-Mobile subscribers to search the entire Web, not just one source. Then Yahoo! Mobile's oneSearch service delivers the information in a format designed for mobile devices. Advertising can be displayed with the results.

Yahoo! has already announced more than 70 oneSearch partnerships with carriers around the world, representing more than 850 million contract subscribers. Most of these partners are already using oneSearch and deployment to the rest is happening. T-Mobile subscribers account for 32 million oneSearch users in the USA.

Mobile search was frustrating for users before the advent of oneSearch because of the massive volume of search results that came up (and usually still do with desktop searches). "The last thing you need on a mobile device is 10 million links to web pages," says Pforzheimer. "What you're looking for is instant answers and relevant results to your query – this is exactly what oneSearch provides and how we differentiate ourselves from the competition." With oneSearch, the consumer receives intuitively extracted results based on the user's way of making the query.

Medio provides consumable content such as ring tones and wallpapers to T-Mobile for integration with the Yahoo! oneSearch service. Using T-Mobile's web2go "search everywhere" portal delivers federated search results through oneSearch; Medio's contribution adds consumable content. "So for instance, if someone searches for 'Jessica Simpson' through T-Mobile's web2go portal, they'll not only get her biography, relevant images, news articles, websites and more, but also have the opportunity to purchase consumables from the singer – all within the same mobile experience," says Pforzheimer.

Yahoo! is reportedly planning to "geo-locate the Web", to list the search results according to the location of the searcher. It can already target users with geographical content in one of several ways.

The best way to target a mobile user geographically, says Pforzheimer, is to make use of GPS functionality if the mobile device has it. This method requires no active input by the user other than giving permission to Yahoo! to make use of the GPS coordinates. Cell tower triangulation can be used in similar fashion – and again, with the consent of the user.

The third way is for the consumer to specify his or her location with the search query. "Sometimes," Pforzheimer suggests, "all that is needed to better localise a query, especially on lower-end phones, is to make users aware that location is one of the criteria they can use to return relevant results."

With oneSearch, Yahoo! uses an algorithm to deliver select, relevant information, and the results are displayed in clusters based on the way the search query is phrased.

In mobile searches, Pforzheimer doesn't envisage much immediate application for services like FireEagle, which allows people with mobile access to show their location on the Internet. "There is a lot of potential for advertisers, but at least for now FireEagle is more about people building apps that leverage location info," he says.

Adding value to the advertising

Medio is an ad broker, but not in the sense that it merely negotiates advertising in general for other parties. With its AdBroker technology, Medio thoughtfully "brokers" ads to ensure that the most relevant ad from the most appropriate network is shown for any query. This ad is specifically targeted at the end user.

There is good reason for this considered approach. Advertising through mobiles may be easy and inexpensive but it is not always greatly cost-effective – it is often too loosely targeted.

Advertising in social networking applications for mobiles is notoriously ineffective. It is a highly inefficient use of the shotgun approach, with a very low conversion rate. Although 5% is considered a good conversion rate for this type of advertising at large, the rate from social networking averages a paltry 0.1%. This is one reason advertisers may be offered what appear to be surprisingly low rates to advertise via this route.

Dan Gilmartin, VP of marketing at uLocate, states that current apps do not allow for high granularity. This, he suggests, is not a bad thing. Too much granularity can make the advertising too targeted. For example, advertisers may want to direct their messages to a certain area – a zip code area, for instance – and not to one individual at an exact location at a given time. As Gilmartin puts it, "Granularity means you get very low pick-up from advertisers; everybody wants to market to 22-year-old males in Boston, but not to one 22-year-old male on Canal Street in Boston at 5 pm."

The third party ads that Medio places, that it brokers, may come from a variety of sources. Medio works with best-of-breed mobile ad networks including AdMob and Medio's own network. It also brokers ads from operators' in-house ad networks and from those operators' Web partners such as Google, Microsoft and Yahoo!

Brain Lent of Medio describes how and where these third-party ads may be placed. "Medio's search is enabled to support multiple ad slots. The primary ad position is the first slot on top of all the search results. However, there could be additional ad slots placed throughout the search pages, between pages, or on detail pages."

He adds that Medio always seeks to broker ad slots which are relevant to the user without compromising the end-user experience. This concern is critical for small mobile devices.

Looking to the future

Advertising through mobiles is still in its early development phase compared with other media. The influential players like Yahoo! and Medio are looking towards the "next frontier" in mobile ads, where they plan to greatly refine the focus and nature of the advertising.

Yahoo! and Publicis Group are working on ways to deliver mobile ads which are uniquely relevant to the end-user. Yahoo! aims to leverage its Smart Ads technology for mobiles to enable many permutations of a brand's message; Publicis will then tap into this system to create matching, personal microsites related to these "smart mobile ads".

There remains the sometimes thorny question of who pays for exposure to mobile ads. If you don't have a flat rate package with your mobile, are you subsidising the bandwidth cost of delivering ads to those who do?

Pforzheimer comments, "Mobile carriers around the world are dealing with data pricing in different ways. When pricing is simple for consumers to understand, such as flat rate (as is the case for many BlackBerries, iPhones, etc.) consumer usage of mobile internet services is incredibly high. However, when consumers don't have a flat rate plan, many are not fully aware of how much accessing the mobile Internet may cost.

"There are plenty of questions about what exactly is a kilobyte of data. How many kilobytes would I use during the course of my experience, and how much will my total bill be? What if I'm roaming? The more transparent and forward looking carriers are with their pricing models, the more data we can expect consumers will use."

Yahoo! has asked some of its partners in various countries to use zero-rate data pricing for users of Yahoo! oneSearch. The carriers would not charge their customers for the time they were on the oneSearch web page, so the amount of advertising they receive – and the time it takes to download – would no longer be a consideration.

Pforzheimer states, "When it comes to mobile advertising, we aim to provide an engaging, non-intrusive consumer experience. We work with our advertising partners to deliver mobile advertising campaigns that are relevant and designed specifically for the mobile medium – offering users on the go something they can actually use."


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