This document discusses mobile advertising and presents a solution called THE Model. It begins with an overview of the growth of mobile devices and opportunities for mobile advertising. It then analyzes the mobile advertising industry using Porter's Five Forces framework. The document recommends a "reward-centric" mobile advertising model where users receive rewards for viewing full-length ads. It proposes a solution called THE Model that would use location-based technology to deliver relevant ads and rewards to users in real-time via mobile apps. The document addresses challenges in implementing this solution and gaining adoption from advertisers and app developers.

1. Monetizing
Advertising
(Mobile)
Prepared by:
A.Altaimani, I.Manandhar, J.Loo, J.Gan
Edited & Presented by:
J. Gan

2. Agenda
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Problem/Challenge
Porter’s Five Forces
Recommendations
Our Solution
Challenges Ahead
Questions
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3. Problem At Stake
• New media requires new methods of advertising
• Important to recognize the medium in which
effective advertising can be utilized to continue this
lucrative business
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4. Advertising Trends
• How technology and content is shifting consumers’
experience?
• How do publishers hope to harness/capitalize on
those experiences?
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5. Why Mobile Advertising?
• Over 120,000,000 active smartphones in the US
alone
• Over 87% of smartphone users access internet or
email on their device – 4.7 of 6 billion mobile users
• Over 48% of organizations have a mobile version of
their organization’s official website
• Over 75% of consumers appreciate and prefer the
simplified mobile version
• In essence, companies are increasingly mobile
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6. Strategic Issues To Be
Analyzed
• Media affects on advertising strategies and
consumer behavior:
Ø Advertising built on through interruption, repetition, and
brute ubiquity is increasingly ineffective
Ø Consumers seeking escape from it by installing pop-ups
blocker on their browsers
• Opt-out of banner ads
• Pay content providers like Pandora to be
advertisement-free
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7. Opportunities For Mobile
Advertising?
• Industry experts predict that mobile will grow far
bigger than desktop
• Continuous advancement to video content
o Allow advertisers to provide more engaging content
• “Freemium” model for apps has flourished
o Rely on micro transactions / in-app purchases
o Creates avenue for advertisers to capitalize
o Proven successful over time
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8. Porter’s Five Forces
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9. Image
Source:
Harvard Business Review, January 2008
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10. Rivalry Among Existing
Competitors
• Lack of branding loyalty
• Customer acquisition & retention
• Businesses and advertisers new strategies to make
campaigns successful
• Conclusion
ü Rivalry Among Existing Competitors is Medium to High
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11. Threat of New Entrants
• Entry Barriers
Ads viewed as an ‘annoying factor’
Fragmentation of devices and wireless carriers
Lack of solid strategy to engage the customers
Government policy – consumer privacy
Trends to mobile advertising lean toward location based
advertising
ü Learning customer behavior and search history
ü Customer might be biased due to brand identity
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• Conclusion
ü Threat of New Entrants is Low
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12. Threat of Substitutes
Power of social media Twitter and Facebook (UGC)
Growth of mobile devices exceeding PC
Rise of mobile websites for businesses
More mobile purchase decisions vs. in store
Technology allows new channels for forward
integration with low switching costs
• Conclusion
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ü Threat of Substitutes is High
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13. Power of Suppliers
• No threat to raise prices or reduce quality by
suppliers as supply of ad campaign content
strategies are less compared to the demands
• The advertisers can switch to different content
provider/supplier with a very low switching costs as
this emergent industry has more channels
• Conclusion
ü Bargaining Power of Suppliers is Low
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14. Bargaining Power of
Customers
• Customer’s have more control over viewing a
mobile ad or skipping it
• Consumer acceptance is scarce due to ‘annoying
factor’
• A few to no switching costs unless they are willing to
pay for a premium content
• Agreement between customer and mobile carrier
can affect location based advertising or search
history
• Conclusion
ü Bargaining Power of Customers is High
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15. Recommendations
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16. Mobile Website vs. Mobile
App
• Mobile websites are not as marketable
• 82% of users mobile minutes are spent on app
o As opposed to 18% spent on mobile web browser
• “There’s an app for that”
• Example:
o Amazon
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17. Example: Amazon
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19. Challenges At Stake
• No solid / de facto model for advertisers
• Still at “trial & error” phase
• Consumers deemed mobile advertisement as
“annoying”
• “Fat Finger Effect”
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90% of accessed mobile advertisement are accidental
due to limited real estate
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20. On the Bright Side…
• Fastest growing sector
o Continuously expanding as the industry mature
• Even without a proven ROI, mobile marketing
budget continues to increase
o Over 61% of organizations believe it is important for growth
and future success
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21. Expected Mobile Ad
Spending
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22. Main Challenge
• Remove stigma of mobile ads being “annoying”
o Research on mobile ads trend show that consumer love
being rewarded for their effort
• Found in research
o Hulu: View full length ads before content viewing to avoid
interruption
o 93% consumer said having opportunity to choose a
“reward” in exchange for their time was important
• Example model: Mobile gaming industry
o Monopoly Hotel
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23. Where Do We Fit?
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24. “Reward-­‐‑Centric”
• Real tangible reward OR gifts of virtual currency
• Take Monopoly Hotel as an example
o Separation of gold and cash
• Cash can be obtained easily through persistence
• Gold requires in-app purchase
o Options to acquire gold to purchase nicer/better rooms
• Real $$$ for in game gold
• Watch ads for rewards
o i.e.: 5 gold for a full length Toyota Camry ads
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25. Example #2
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26. Gan, Jeremy
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27. Example #3
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29. Gan, Jeremy
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30. “Reward-­‐‑Centric” cont…
• Extracting this model could be applicable to all
apps
• Connecting users with some form of rewards
o Real tangible rewards or gifts of virtual currency
o Creates trust between users and advertisers
o Take away “annoying” feeling
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31. Our Solution
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32. THE Model
• “Peace cannot be kept by force; it can only be
achieved by understanding.” – Albert Einstein
• Our solution?
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33. THE Model cont.
• Use pop-up format
o Provide options to skip – engage user’s input
• Video format for rich-content
• Provide some form of “reward” upon completion of
full-length ad viewing
• Powered by location-based technology
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34. Operations In Real-­‐‑
Time
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36. Example
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37. Imagine This…
• A Walgreens ad appear advertising Popchips
• User choose to view full-length advertisement
• Reward: $0.50 digital coupon for Popchips at
participating Walgreens
• Provide a reason for consumer to purchase/try
Popchips
• Consumer making a trip to Walgreens will purchase
other items as well
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38. Advertising Central
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40. What Sets Us Apart?
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Raise: buy and sell gift cards
Groupon: buying coupons
Belly: loyalty program
Kiip: virtual achievement – only gamers
Tapjoy: tedious, long steps, junk mails
• Us: bringing sexy back to video commercial
o Let us help you reward your user through rich media
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41. Why We Think We Stand
A Chance?
• Commercial continue to be a very lucrative market
o Superbowl ads is a living testimony
• Marriage between emerging with existing
• People love video contents because it’s captivating
o Youtube, Hulu, Dailymotion, Youku
• Create lasting impressions
o Virality through the spread of social media
• Quick and easy way to reward users
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42. Challenges Ahead
• What is the real advantage for advertisers?
• How to regulate competitors advertisement through
location based technology?
• There are no tangible promises for clients
• Who is the ultimate gainer anyways?
o Walgreens or Popchips?
• How to convince app developer to commit?
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43. Developer’s End
• Seamless integration of the model to apps
• Require powerful bidding tools for local businesses
o Smarter ads optimization
• Advance reports to measure ROI
o How many people are really utilizing these rewards?
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44. Conclusion
• Good advertising yields positive shift in demand for
products and services and advertising elasticity of
demand. Based on our model, we think that Mobile
Advertising can make this positive shift happen
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45. Questions?
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