WIRELESS ADVERTISING: Five Steps to Getting Started

Recommendations on how to get started…

As with any emerging industry, the question of how to get started arises
often, and just as often, answers prove elusive. In an effort to help wireless
service providers (WSP) pursue a wireless advertising solution, whether through
WindWire or another party, WindWire has compiled guidelines for a general
approach to wireless advertising. While there were no WSPs directly associated
with the First-to-Wireless trial, WindWire worked closely with wireless service
providers both during and outside of First-to-Wireless. These suggestions have
been compiled as a direct result of WindWire’s experience in the field and as
a consultative partner to wireless service providers.

Today, WSPs have more at stake in their wireless advertising strategies than
perhaps any other player in the field, especially as regards the WSP-consumer
relationship. As such, the WSP decision-making process and, ultimately, the
advertising solution, must take into consideration the response and effect of
each stage of the campaign upon the consumer. WindWire suggests WSPs undertake a
deliberate and exhaustive exploration of wireless advertising before selecting
any single solution or strategy. The following are general guidelines and steps
for WSPs with a Wireless Internet offering. These steps can also be employed by
WSPs who are considering rolling out a Wireless Internet service.

WindWire provides the following guidelines with the understanding that the
WSP approach should be tailored to the current needs of the WSP and its
customers.

Wireless Advertising Strategy Planning

Evaluate the Wireless Internet business model both with, and without a
wireless advertising component. When evaluating business models, consider each
model’s effects on issues central to a wireless service provider,
specifically:

• Revenue Model

• Average Revenue
  per User or ARPU

• Churn &
  Subscriber Retention

• Customer
  Satisfaction

• Subscriber Growth

Some of the more common business models available for WSPs
are described below. Each business model represents trade-offs in terms of
revenue, WSP involvement and control, and technology required to implement it.
In choosing one or more of the business models below, WindWire suggests WSPs
take an in-depth look at their level of commitment and resources available
regarding wireless advertising.

Business Model #1 allows WSPs to support Wireless
Internet services and content using subscriber fees (charged monthly in addition
to fees for voice service) and WSP resources only. This business model’s
objective is to provide offerings that are competitive with others in the
industry, and is not intended to produce additional revenue. Thus, this scenario
generates little revenue to support content and services development for the
Wireless Internet, being dependent on subscriber fees and the WSP for support.
Wireless ad technology requirements: None

Business Model #2 WSPs derive revenue from content
provider placement fees, in addition to subscriber fees. These placement fees
are charged to content providers desiring "top deck" placement or
general distribution via the WSP’s network. In this scenario, the WSP begins
to leverage the value of its Wireless Internet offering, but refrains from
taking a share of any revenue generated by the content provider as a result of
the content provider’s distribution over the WSP network. Wireless ad
technology requirements: None

Business Model #3 allows WSPs to begin to fully
recognize benefits from their Wireless Internet offering. In this model, WSPs
generate revenue from placement fees as well as by receiving a share of
advertising revenues and m-commerce fees realized by content and service
providers directly using the WSP’s distribution channel. At this stage, the
WSP is able to subsidize either the cost of acquiring content or to discount
consumer service fees using the revenue generated via placement fees and ad
revenue generated by publisher-driven media sales. Business model #3 has the
added benefit of increasing profitability, with minimal effort by the WSP as
media sales are the responsibility of the publisher within this model. This
model requires that WSPs have their own wireless ad server or a sanctioned ad
server for use by publishers that is able to accurately track the ads served
over the wireless network and can control the number and frequency of ads served
to the WSP subscribers based on subscriber profiles or WSP restrictions.

Business Model #4 requires a greater commitment to
wireless advertising from WSPs. In this model, WSPs completely subsidize the
cost of acquiring Wireless Internet content and subscriber access by taking a
share of all advertising and m-commerce revenue generated over the WSP
distribution channel. Media sales for publisher content are outsourced, and are
largely the responsibility of the publisher. However, the WSPs dependency on
advertising revenue and m-commerce is heightened. Placement and subscriber fees
are not a suggested option within this model. In this scenario, WSPs must not
only be able to track the ads served over their network to ensure proper revenue
sharing, but may opt to control the number and frequency of ads served to their
wireless consumers based on subscriber profiles or WSP restrictions.

Business Model #5 necessitates that the WSP create an
in-house media sales team devoted to media sales and the trafficking of wireless
ads. In this scenario, the WSP owns and/or creates their Wireless Internet
content and is thus responsible for revenue generations using its in-house media
sales team to support the Wireless Internet service offering. This business
model is fully dependent on wireless advertising and m-commerce fees to support
wireless content acquisition and subscriber access. Trafficking wireless ads
requires a full technology solution to create, serve, measure, and manage
wireless advertising.

Business models #3, #4, and #5 require a wireless advertising
technology provider. The extent of the technology solution needed is dependent
upon the business model selected. Though all models should be reviewed with due
diligence, business models calling for a solution to help the WSP measure
revenue across their network, are more involved and require the WSP to act
accordingly in selecting a solution. The following chart provides more detail on
the requirements for an advertising technology solution associated with each
business model, as well as an overview of the business models and associated
revenue generators.

Business Model

Of the business models described, WindWire recognizes
business model #3 as the most appropriate fit for the majority of today’s
wireless service providers. This model allows the wireless service provider to
diversify his revenue sources while minimizing the risk involved by becoming too
deeply involved. Resource allocation is minimal as publishers act to promote and
sell the wireless media, with the carrier taking a share as a premier
distribution channel. In addition, carriers can control the ad delivery
environment subscribers experience by requiring publishers to either work with a
sanctioned technology solution or through the carrier itself to serve ads to its
subscribers.

Information Gathering

Once the WSPs have determined their wireless advertising
strategy and the primary objectives of that strategy, it is time to research the
feasibility of implementing that strategy. Feasibility is heavily dependent upon
the consumer, namely:

• Subscriber attitudes towards
  service pricing

• Subscriber acceptance of wireless
  advertising

• Subscriber expectations regarding
  content breadth and quality

At this stage, it is also important to open dialogues with
advertisers and potential technology partners (depending upon the business model
selected). These dialogues need not involve a binding agreement, but should
serve as an open exchange of information regarding advertiser interest in
wireless mediums; technology provider capabilities and suggestions for
implementation; and parties’ interest in partnering with the WSP to conduct a
wireless advertising trial.

Trial Execution

Having determined a preferred wireless strategy and having
gathered information from potential partners, the WSP is ready to begin planning
and conducting a trial. The most important step in trial execution happens
before a single partner has been signed on or an ad served. The WSP should have
a clear set of objectives that must be achieved within each stage of the trial.
These objectives should have been determined during the information gathering
stage (Stage 2), and partners selected according to their ability to help the
WSP achieve these objectives.

To trial a wireless advertising solution, it is necessary to
thoroughly test both the technology aspects of the solution, as well as the
campaign functions such as ad creative types and campaign management. In
addition, consumer trials should play a key part in the trials. WindWire
suggests that wireless service providers do not limit their trials to current
wireless customers only. WSPs must also act to gauge the potential acceptance of
prospective subscribers. Generally, consumer trials can be conducted using a
combination of focus groups and quantitative studies.

Trial Results Analysis

The analysis of the trial results should be unique to the WSP,
its partners, and the business strategy selected in stage 1. Based on the
results of the trial(s), the WSP must assimilate that information into the
decision making process and decide whether to:

• Proceed with selected plan strategy

• Conduct additional trials if results are inconclusive

• Begin again by selecting a new strategy

Roll-Out Decision

Once the WSP is satisfied with the strategy and the
appropriate information has been gathered and trials run, a final roll-out
decision is due. This decision is not only based on the quantitative results
gathered in the trial, but on qualitative learning and, finally, the WSP’s
commitment to the objectives set forth in the beginning.

Key Points

In addition to the guidelines above, WindWire has compiled a
list of questions and requirements that can be asked of potential advertising
technology partners. This list is not meant to be all-inclusive, but a guide in
helping the WSP intelligently pursue wireless advertising options and partners.
While reviewing the following list, the WSP should consider the importance of
each item to its Wireless Internet and advertising strategy.

1. To how many wireless devices are you currently able
   to serve wireless advertisements?

2. Are you able to serve over our wireless network (e.g.
   GSM, CDMA, and TDMA)?

3. Which of the following wireless ad formats do you
   offer: rich, text, image, audio, or other?

4. How many wireless mark-up languages do you support
   (HTML, HDML, VXML, WML)?

5. Do you offer a licensed network solution specifically
   for wireless service providers?

6. Will I receive 24-hour support and a designated
   point of contact?

7. How reliable is your hosted and/or licensed wireless
   solution? What type of system back-up and redundancy does it offer?

8. What type of wireless product documentation and
   demonstration can you offer for my immediate review?

9. Do you have a web-interface that enables
   management of wireless ad serving?

10. What types of wireless reporting metrics will I
    have access to (frequency, reach, impressions served, ad received, return on
    investment, etc)?

11. How often can I receive updates on the wireless
    campaigns running over my network?

12. What reporting, trafficking, and management tools
    are incorporated into your wireless campaign management tool?

13. Can you serve third-party wireless ads?

14. What type of assistance can you offer regarding
    wireless training, ad trafficking, media sales, and ad creative development?

15. What wireless targeting capabilities can you offer?
    Specifically, will I be able to target ads by device and browser type, geography
    or location, etc.?

16. What type of management controls do you offer WSPs?
    Can I control things like frequency and time of day ads are served, or serve ads
    based on a consumer profile?

Incorporating wireless advertising into a Wireless Internet
offering can have extensive benefits, including the ability to attract premier
content by allowing publishers to advertise across the WSP network, subsidizing
the cost of content and consumer access for a more competitive offering, revenue
generation, and more. However, these benefits cannot be realized without due
consideration of the WSP objectives and strategy for achieving that objective.
While the above guidelines and requirements are by no means an all-encompassing
list, they should help a diligent WSP realize the benefits of a well-executed
wireless advertising solution.

Source: Extracted with permission from First-to-Wireless: Capabilities and
Benefits of Wireless Marketing and Advertising, a December 2000 report, based on
the results of a marketing trial conducted by WindWire, Inc. (www.windwire.com),
a technology firm specialising in wireless
advertising solutions.