Is LBS Holy Grail for mobile marketers?

By Dan Butcher

September 12, 2008

CTIA Wireless I.T. & Entertainment 2008 in San Francisco

SAN FRANCISCO - The Holy Grail for marketers is the ability to reach consumers when the offer is most actionable and many industry players are touting location-based services as just that.

The “Consumers, Mobile Devices, and LBS: Defining the Marketing Zen Moment” panel discussed the power of leveraging consumers and their devices with location-related content.

“Mobile is all about context, which is the advertisers’ Holy Grail, and location is arguably the most important aspect of context,” said Sam Altman, co-founder/CEO of Loopt, Mountain View, CA. “All successful marketing campaigns take context into account.

“The most valuable advertising is the most contextually relevant,” he said. “Google has been so successful because of context-based advertising.”

Traditionally, advertising is blanketed over large areas and demographics but the mobile phone enables completely new and engaging ways to reach consumers. The key, according to industry insiders, is location awareness.

In the Loopt

“Location is the ultimate context, and it’s very important if you want to deliver an ad,” said Darren Koenig, director of wireless, Internet and telecom for Tele Atlas, Lebanon, NH. “That ad is worth 50 times more than one that’s not targeted.

“Location is the best targeting mechanism that you can find,” he said.

Still, mobile location-based services—and mobile marketing—are still in their infancy.

The session inspired attendees to visit San Francisco's Black Mountain Zen Centre

“Mobile advertising has not been fully defined, it’s still nascent, and there’s no one proven method that has worked out well for everyone,” said Isaias Sudit, CEO of LOC-AID Technologies Inc. “There are 20 different categories and still nobody’s saying ‘this is the way it’s going to work.’

“To attain the mass market, the mobile industry needs reach, penetration, scale,” he said.

Mr. Koenig agreed.

“You need critical mass for the mobile platform to be relevant and interesting to big brands,” Mr. Koenig said. “The numbers have to be big enough to be interesting to the major players and to drive standardization of metrics.”

The panel discussed factors that need to change for mobile marketing to reach its potential.

“The cost of location access has to come down, privacy standards have to be well understood and followed and we have to figure out how to reach the 15 million small businesses in the U.S.,” Mr. Altman said. “Mom and pop aren’t used to buying ads.”

Mr. Koenig noted that the CPM structure for mobile advertising can range from 2 to 3 times Internet rates up to 50 times if it is targeted using a number of factors, including location.

Mr. Sudit stressed the need for a different metrics specific to mobile.

“We need to start thinking about a new ad unit for the mobile space,” Mr. Sudit said. “We need a different way of measuring an ad unit that works for mobile.

“If we don’t move forward with this, the only winners will be the big Internet powerhouses,” he said.