Following on from O2 More, a direct marketing channel, Orange have launched their own call Orange Shots. The idea is pretty simple – they take opt-in subscribers and send them up to three messages a week on sectors that they are specifically interested. The idea of targetted mobile advertising is not new, and Orange, having acquired Blyk, have adpoted their approach in the new channel.
However, I see two major problems with this:
Firstly, the consumer. Orange are offering free premium content to those who sign up for the program. But how much will mobile users value this in return for marketing messages. Blyk reported that their users found the marketing messages generally useful. However, the offer and relationship at Blyk was somewhat different to Orange. The former company focussed on an under 26 demographic. And for that they offered free calls, SMS and even data. That is a much more compelling offering than free premium content when you’re already paying a network subscription.
The second problem are the operators themselves. Of course each operator can only access their customers. If the T-Mobile deal gets through Europe then they will have the largest customer base of any network. But it will still not be a majority of UK mobile customers. Of those, only a small portion will sign up. More significantly is the perception of mobile operators as advertising providers both from the point of view of the consumer and that of the brands wanting to sell their wares. In short, most people see mobile operators as delivering phone calls, SMS and some data. The example of the operator mobile web portals shows this. As soon as users have a chance to avoid the portal (for example through the iphone), they will go elsewhere. From a brand’s perspective, who would you go to for marketing? Your an existing online provider (Google), your ad agency or a mobile operator? With Google’s acquisition of AdMob, the search provider looks to be a good option for brands. Google have experience in delivering results in this kind of area. Agencies understand the whole brand and marketing mix. I suspect that operators are way down the list of choices.
The mobile operators need to find new sources of revenues. Phone ownership is at saturation point and most people have the subscripition or tariff they are happy with. So, there are no new customers and no one is likely to spend any more on their phone calls etc. It means that the operators are stuck if they want to increase revenues. That is why they are looking at direct marketing and platforms such as Orange Shots.
It’s true that Orange have done a good job of the offering. They are encouraging brands to create a dialogue with their customers and feeding back good, solid reponse data. Ultimately though, how much direct advertising are mobile users prepared to accept? I suspect it won’t be that much.