"The people who will manage the customer relationship will be those who own the communities," says Mark Frieser, managing partner of Remora Holdings, a mobile platform developer. "That does not mean the carriers or the technologists, but the stars who own the content that gets you to coalesce around a brand. Like Apple, perhaps."

The lead candidate was the mobile virtual network operator (MVNO), which theoretically could reduce the carriers to "dumb pipe" status—that is, broadband that delivers unrestricted content. With voice service heading for commoditization, the tendency of customers to switch carriers so easily suggested the carriers had no inherent brand value. The decision of AT&T to cut the cord on Cingular confirms this. However, AT&T is not a lone party-pooper here. Disney pulled the plug on its ESPN MVNO in favor of licensing ESPN content across the carriers, suggesting there is more than expertise in content provision adding value to the mobile experience. The advertising dollars that fuel cable content gravitates to a more disparate wireless audience, as MTV learned when it moved away from its relationship with Virgin's MVNO.

"Today, most brands and advertising are passive and 'in the background,' " says Bill Stone, president of pace-setting MVNO Amp'd Mobile. "However, unlike TV, radio, and the Internet, mobile is personal and active. You leave your home every day with three things: your keys, wallet, and cellphone."

Thus, Stone adds, if a brand is going to "advertise" to you on mobile, it also better be personal, active, and relevant to who you are and what you are doing. "The good news is that mobile can theoretically meet that promise given the ability to know preferences, age, habits, etc., in a much more detailed way than any other medium," he says. "The question is not if mobile advertising is going to work but rather how and when—and with which brands and in what formats (e.g., post-roll, pre-roll, video, text, etc.). The brand values of what to advertise on mobile will be no different than a company's core brand values."

He concludes, "Key for advertisers is to ensure they know which ads are going to which customers, [otherwise] there is a risk of negative backlash against that brand. For those advertisers who do know, the results and efficiencies will trump any other advertising medium."

As pointed out at CTIA by Nihal Mehta, founder of Ipsh!, the messaging agency acquired by Omnicom, it is this gathering and sharing of data that sets short-message service (SMS) advertising apart. Ipsh!'s short code campaign for Budweiser at the Super Bowl generated fewer unique impressions than traditional media, but each respondent repeat-messaged an average of 36 times.

"The big telco brands, and really any access brands (cable, wireless, ISP, VoIP, WiFi), certainly have great brand qualities," says Brendan Benzing, vice president of product management at Infospace. "In terms of their ability to apply full, 360-degree customer relationship management (CRM) they have many assets—probably even more than credit card companies, especially the wireless divisions. Given the amount of money that this collective group spends on branding, I do think they can develop sub-branding strategies around certain elements of their offerings. It wasn't long ago that Comcast thought of buying Disney [not the other way around]."

With media companies on one side, the telcos have the technologists on the other, offering CRM tools such as HP's Oneview, which mine and process data, manage churn, increase share of wallet, develop segmentation strategies, automate multiple campaigns, and generally increase the intimacy of the relationship with the consumer to a point that is only constrained by the amount of information the service provider is willing to share. Again, this calls into question the role of the carriers, who deliver SMS and to a large extent control access to the mobile web.

"The aggregate brand value within mobile telephony has increased dramatically over the last two decades, and not only as a result of Metcalfe's law on network effects related to the number of connected devices," says Tom Trinneer, vice president of marketing and product development at SNAPin, speaking at CTIA's culminating panel on mobile advertising. "While the so-called battle for the customer's relationship has moved far beyond the traditional combatants, the overall opportunity to generate value has actually increased with the number of value-chain participants, thus creating a network effect all its own."

He adds, "There may well be losers in the expanding brand-value landscape that is mobile telecoms, but it isn't likely to be those players that are actively building service portfolios [composed] of media and entertainment brands. The losers are far more likely to be those Luddites focused on maintaining their 'larger' slice of a spectacularly smaller pie."

In theory, the carriers benefit from maximizing data traffic, but they have reason to play things close to the vest—and are well known for blacklisting IP addresses they don't like the look of. Given what spam and pop-ups have done to the Internet, this is no bad thing, but can we rely on an oligopoly to judge whether teenagers should watch an interstitial ad before being served a mobisode? Or how often we want infomercial alerts mingling in our text inboxes?

A Mobile Frontier
The short answer is that even the Mobile Marketing Association (MMA) hasn't yet determined the criteria by which these issues should be judged. The long answer could be that the whole thing is likely to be thrown wide open. "Now more numerous than personal computers, televisions, autos, and even fixed-line telephones, the mobile phone is arguably the most undependable technology product worldwide," says Trinneer. "And with the advent of open systems and Internet protocols being applied to telecoms over the last decade, wireless is rapidly becoming a mass medium unto itself."

On the same panel, Medio CEO Brian Lent points out that "search allows anyone to be reached via the phone without approval having to be sought from the carrier."

"Search is the starting point for the consumer experience," Benzing concurs. "This is true of the Internet and it is becoming true of mobile, and it will be true of TV. The challenge is to build a search audience and build differentiation."

It may well be that differentiation in enabling search yields significant brand equity to those competing to claim the mobile consumer. While it is sobering for many of the mobile ad startups to see Google and Yahoo! entering the space, there are those who believe that corporate DNA and the demand for a mobile-specific set of search algorithms will allow for the entry of new players.

Among them is JumpTap CEO Dan Olschwang, who, as the conference draws to a close, seems equally concerned with the following show-stopper: "What happens when Verizon users start searching for Skype?"

Now this, finally, brings a full five seconds of silence to the room.     

[16-Apr-2007]