Digital Advertising 2.0: A New Value Chain

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Mobile advertising is starting to come of age. Agencies are beginning to build successful campaigns based on a growing understanding of the strengths of the channel, and opening interesting new business model opportunities for telcos in the process.

That was the view of David Lang, President Mindshare Entertainment, speaking at the 8th Telco 2.0 Brainstorm held in Orlando in December. He said that agencies and clients are starting to use its two-way capacity to build communities and content and therefore creating alternative value chains in which telcos can play more than just a distribution role.

Lang comes to mobile advertising from a creative angle - he has a TV production background - and his message was one about the potential for advertising to become cool content for operators to promote and attach their own brands to, rather than just being a channel.

He described two examples of just how valuable that can be to both advertiser and telco. Both involved Sprint Nextel, and in both the distinction between content creator, advertiser and distribution channel roles had blurred.

Mum's the Word
The first, 'In the Motherhood', was designed to tap into a rich vein of creative angst from women with painfully funny stories about life as a mother. It called for stories to be submitted on specially chosen subjects and the online community voted on the best. The winning stories were then turned into professionally written and produced mini episodes that were available on line and through Sprint's WAP 'What's New' page. In fact, they also crossed over to TV and the concept was even taken up by ABC to turn into a TV series, although this wasn't particularly successful.

What started as a brand association campaign for Suave hair care products had become a content phenomenon attracting 763,000 hours of engagement, 25 million web views and outperforming Greys Anatomy and Deal or No Deal for hits on Sprint's 'What's New' page. In effect it was akin to ad-funded YouTube content.

Doubling Up
Far from being just a distribution channel Sprint Nextel became associated with cool content, which effectively became advertising for the telco as well. In Lang's second example, Sprint set out to maximise that association from the start and become a channel for content creation.

Home for Heroes
In conjunction with the producers of the TV show, Heroes, Sprint and MindShare produced a campaign to create a new Heroes character. Using text submissions and voting as well as on-line, the campaign built to climax with the introduction of the character created by consumers into the TV show and taking the TV trailer concept to a whole new level.

Reinventing the Ad Value Chain
Lang's presentation is interesting because it reflects just how much advertising is changing to take advantage of multimedia distribution channels. Those changes impact on the value chain and business models for both on-line and mobile advertising, particularly when consumers are used to create content as in the examples cited.

Lang didn't talk about revenue sharing, so the monetary value of either campaign to Sprint is impossible to gauge. However, his case studies do offer up examples of a telco playing twice in the advertising value chain and hints at potential for selling social networking, voting and other interactivity as platform or cloud services to advertisers.

(Ed. Further information and analysis from the Brainstorms will be made available to attendees and members of the Telco 2.0 Executive Briefing Subscription Service. For future Brainstorms and Virtual Events, please see here or email contact@telco2.net.)