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Issue 15 • January 2011



Simon Murphy, FremantleMedia Enterprises News 

s 2011 set to be the year of m-gambling, but billing issues remain, says FremantleMedia fremantlemedia enterprises, one of the largest creators and producers of entertainment brands in the world, is adding it backing to 2011 finally being the year of mobile gambling, with the company’s head of gambling, Simon Murphy, heading up a new division within FremantleMedia Enterprises (FME) to develop gambling offerings for landbased, online and mobile slots based around its famous TV formats such as Family Fortunes, the Price is Right and X-Factor. According to Murphy mobile is now a significant opportunity for gambling companies and for brands. “Higher capability handsets such as iPhone and Android, with greater graphics capabilities, make it much more accessible,” he says in an exclusive video interview with TelemediaTV. “Tablets also bridge the gap between online and mobile, getting consumers accustomed to mobile gambling. “Also gambling operators now also see the opportunity in mobile, since several large operators have witness a large growth in the number of punters using their iPhone-enabled sports book offerings and are turning mobile into a revenue stream.” In Murphy’s view, mobile, online and land-based gambling services should all work together and offer a clear branded experience, but mobile has the opportunity to also operate as a channel to discover games, set up accounts, play games and collect winnings seamlessly. “I can see real value in offering all of this from the handset, and we are working closely with handset makers, games developers and gambling operators to make this happen,” he says. continued page 2

The latest news from the industry, along with analysis of what that news means, including: • MIG signs exclusive 3 year deal to supply ITV with mobile interaction 2 • Take our two question m-gambling survey 2 • Pay-to-play music service Psonar to use on-bill billing through Bango 3 • Starbucks debuts m-payments with smartphone app 4 • Mobile marketing, advertising and affiliate networking – in a box 5 • Credit card ban threatens online gambling but offers an opportunity 6 • mBlox and NSPCC deliver flexible mobile donation engine 6 • Ringback tones promise huge ad revenues in 2015, says Juniper 7 • A fifth of consumers are playing social games 7

Analysis Editorial Gambling on m-gambling M-gambling is going to boom this year, but what are the telemedia opportunities?


Mobilising travel Oxygen8’s Gary Corbett takes a look at the opportunity offered in the travel industry for telemedia, as the sector looks to embrace the efficiencies of mobile 10 What does 2011 have in store? Well it is January, so we take a look ahead at some of the wider trends in comms that will afffect the your business in the year of the rabbit 12

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NEWS MIG signs 3 year mobile interactive deal with ITV, rolls out new interaction platform itv has appointed MIG as exclusive mobile interaction supplier in a three year deal signed this week. The partnership is a continuation of five years of mobile technology service provision, where ITV have seen substantial increased popularity in mobile interactive services. MIG will continue to power all mobile interactive services across ITV’s broadcast shows including key brands such as This Morning, Daybreak , Dancing on Ice and I’m a Celebrity Get Me Out of Here! as well as exploring a range of new mobile interactive services to support the growing consumer interest in innovative mobile offerings. The first of these, a new Mobile Voting Platform, launched this weekend in the form of a brand new web app for Dancing on Ice 2011. The internet connected voting platform, designed by MIG, is an industry first allowing consumers to purchase credits for votes on shows via their internet connected mobile devices. The Dancing on Ice 2011 voting Web App utilises this bespoke technology allowing viewers to purchase credit which they can then use to vote for their favourite celebrity skaters on the move. Ann Cook, Director of Interactive & Managing Director of ITL, ITV plc said: “Our aim has always been to increase

audience enjoyment of our programmes, to develop closer relationships with our viewers and to understand what drives interactivity and participation; to date MIG has been a trusted and valuable partner, carrying out a significant role in enabling us to do just that. “Due to the complex nature of our business needs, with the end of the contract approaching, we ran a highly competitive tender process to ensure we had a partner that we could rely upon to deliver compliant services, over the next three years, as well as working with us on technological advancements and innovation in the mobile and digital landscape.” Barry Houlihan, CEO, MIG added: “MIG has worked with ITV since 2005, managing their portfolio of mobile interactive services, whilst also delivering a range of innovative new technologies and applications. Over the past five years the role of mobile in driving loyalty, interactivity and audience participation has grown enormously and the aim of our partnership is to make sure we provide ITV with the tools, the technology, the

FremantleMedia and mobile gambling However, Murphy warns that operator billing is not a favoured billing channel for getting money into, or indeed out of, mobile or online gambling offerings. “Tariffs can be a problem and the cut taken by aggregators and operators has to be borne somewhere in the value chain. Mobile wallets and pre-registered cards are a much better option and will enable the punter to easily do everything they can do online from the handset.”

knowledge, best practice and insight they need to continue to deliver shows that engage and entertain the nation. “MIG is committed to developing new platforms and innovating with ITV in-line with consumer demand shifting towards Apps, mobile internet and smartphone.”

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Already an industry leader in brand licensing, FremantleMedia has proven success of publishing and distributing games to operators such as, Rank Interactive, Ladbrokes, Betfair and Paddy Power. The gambling division was initially launched as part of FremantleMedia Ventures by Head of Ventures, Paul Kanareck in 2008 as an internal start up and immediately gained traction. The success of the business to date has encouraged FremantleMedia to scale

its investment in the gambling sector. Murphy will be responsible for the company’s online, land-based and mobile gambling initiatives. With more than eight years gambling experience holding key roles with IGT WagerWorks and Million 2-1, a mobile gaming specialist acquired by IGT, he will be tasked with building FME’s brand presence and distribution of multi-channel gambling related content.


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NEWS Psonar to use Bango to offer “economies of onbill payment” for revolutionary music service innovative pay-to-play digital music streaming service Psonar has signed up Bango to offer the user a pay-to-phone bill charge at a level that, says Psonar, “leverages the economics of mobile payments processing on the phone bill”. Mobile bill payment is supplemented by credit card and PayPal. The user can then spend the funds as they consume more music at just a penny a play, creating a radical pricing model for mass market music consumption. Psonar’s pay-per-play proposition is straightforward: listen to a track that you don’t own for 1 cent (or 1 eurocent) per play. Tracks can be listened to in full, uninterrupted and with no intrusive advertising or monthly subscriptions. This breakthrough pricing model will feed the rapidly growing appetite for streamed music, especially driven by increased consumption from mobile devices. Psonar’s pay-per-play service additionally allows users to gift tracks and whole

playlists to friends by simply pre-paying for the recipient to listen one or more times. Each play is charged, meaning record labels and artists are assured of revenue for every single use of the content. Martin Rigby, Psonar CEO, says: “Psonar aims to answer the digital music dilemma that forces users to choose between expensive subscription-based streaming services or pay to own tracks which limits the amount of music consumed and encourages copying and side-loading. By leveraging Bango mobile payments, our highly flexible pricing model meets the huge demand for music at low cost and on a pay-as-you-play go basis amongst the mobile generation.” Supported by music and video distributor, The Orchard, as a launch partner, Psonar is initially launching pay-per-play across Australia, New Zealand, Canada, Ireland and Scandinavia in Q2 2011. North America is targeted for later in the year. Karim Fanous, head of Insight & Strategy

at industry watcher Music Ally thinks Psonar’s model is refreshing: “As online streaming continues to gain traction with an increasingly younger, socially adept, mobile generation of listeners, Psonar’s radical take on the online music market is both refreshing and needed.” “The Bango payment platform has supported super-micro level charging for a long time,” says Anil Malhotra, SVP Marketing at Bango. “Psonar’s use of this feature for music can be extended into other applications, to enable the extremely affordable consumption of video, gaming and other digital content. The mobile industry revolutionized voice calling with pay-as-you-go charging, this has the potential to revolutionize digital content consumption especially where pricing has become a barrier to ubiquity.” Psonar’s pay-per-play will initially be available online via desktop access and HTML5 enabled phones. BlackBerry and iPhone apps are due for launch in Q1 2011.

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NEWS Starbucks debuts smartphone-based payments across the US – using an app, not NFC coffee giant Starbucks is to let caffeine seeking consumers pay for their coffee using mobile payments on selected smartphones in the US as the company takes its Starbucks loyalty payment card mobile – creating the largest mobile payment programme in the world. Building on the earlier introduction of Starbucks Card Mobile App on BlackBerry, iPhone and iPod touch, customers now have access to the fastest way to pay at Starbucks in nearly 6800 companyoperated stores and more than 1000 Starbucks in US Target locations. More than one-third of US Starbucks customers use smartphones, of which nearly three quarters use BlackBerry smartphone or iPhone mobile devices. In addition to engaging a loyal base of several million cardholders with the offering, Starbucks anticipates mobile payment will be a draw for customers looking to experience the speed, ease and convenience of paying with their mobile phone.

The move also gives the company early leadership in the race to take its slice of what Bloomberg estimates will be a $6trillion market for mobile consumer payments in the US alone – and it positions the company well in the complex m-payments value chain, cutting out operators and banks from taking their micro-slice of transaction fees. “Today, one in five Starbucks transactions is made using a Starbucks Card and mobile payment will extend the way our customers experience and use their Starbucks Card,” says Brady Brewer, vice president Starbucks Card and Brand Loyalty. In addition to the mobile payment capability, the app allows customers to manage their Starbucks Card account, check their card balance, reload their card with any major credit card (iPhone users can also use the PayPal feature), check their My Starbucks Rewards status and find a nearby Starbucks store with the store locator feature.

Customers can pay with their smartphone by holding their mobile device in front of a scanner on the countertop and scan the Starbucks Card Mobile App’s on-screen barcode to make a purchase. Customers have successfully adopted this technology in test markets in Seattle, Northern California, New York and more than 1000 Starbucks in US Target stores. Mobile payment is built on the Starbucks Card platform, which continues to experience significant customer adoption. Customers loaded more than $1.5 billion on Starbucks Cards in 2010, an increase of 21 percent over 2009, driven in part by the My Starbucks Rewards program which provides benefits to customers who pay with a registered Starbucks Card at participating stores. With the introduction of the quick and easy Starbucks Card Mobile App and the mobile payment feature, customer will find yet another reason to use their Starbucks Card for payment.

NEWS Mobile marketing, advertising and affiliation out of the box for content publishers and brands madvertmobile has llaunched its much vaunted complete end-to-end mobile marketing management solution and application development and affiliation programme management service for advertisers, publishers, brands and content owners who are looking to promote anything to mobile consumers anywhere in the world. At the end of 2009 almost 530 million users browsed the mobile Web on their handset. This is forecast to rise to over 1 billion by 2015. Marketing and advertising spend on mobile media will rise from a predicted $13billion in 2011 to $41billion by 2015. In order to successfully meet this demand, mobile marketers and advertisers will need platforms that allow them to leverage the multi-media possibilities of the mobile channel, targeting and managing individuals, communities or mass consumer markets on a global scale, together with the creative, distribution, measurement and reporting tools to present clear return

on investment and analysis of campaign performance. Madvertmobile helps customers market to mobile consumers with a wholly owned platform, giving centralised management and manipulation of content, user performance metrics and network management with global or country specific solutions easily translated, replicated and affiliated out. Madvertmobile’s walled garden approach to advertising banners, site creation, inter-connectivity and analytical functions enables customers to run and measure detailed consumer specific campaigns and ROI decisions. Typical click through and conversion rates experienced by Madvert customers are much higher than normal mobile marketing expectations, with average banner click through rates ranging from 16% to 32% and conversions at 12.4%. Dean Butler, Director says: “At the core of the business is our wholly owned, operator

independent, mobile marketing and affiliation software platform. The platform is an operator grade, stand-alone mobile marketing and affiliation solution enabling direct to consumer commercial mobile services as well as branded web-to-mobile marketing, advertising and distribution. “With in-built creative tools for mobile site creation, advertising, banner and network management; real-time analytics; multiple billing mechanisms and crm tools, Madvert can deliver complete end-to-end mobile software and services from content producer to global consumer. Launch customer Translease International’s Maggie Adams, says: “Right from the start we were very excited and impressed by the potential, ease of use and statistical capabilities that the platform offered in converting existing mobile traffic, as well as opening new channels of distributing content.” SEE NEXT MONTH FOR FULL DETAILS

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NEWS Credit card ban for online gambling could pave way for telemedia boom good news for telemedia billing companies: Tory culture secretary Jeremy Hunt is considering banning credit card use for online gambling – as well as banning overseas gambling firms from advertising their services in the UK – as the government looks to crack down on what it sees as rising numbers of people becoming addicted to gambling. The banning of credit cards for gambling services looks set to provide a boon for telemedia billing firms who are already looking at how their tools – especially mobile billing tools – can be used to get money into and out of gambling services on mobile and online. While many in the gambling community feel that reversed billed services are not the ideal way to achieve this, the government’s move to ban credit card in gambling could well force a rethink – and a boom in mobile billing. Meanwhile, plans to demolish much of the previous govenments 2005 Gambling Bill could see many overseas gambling companies banned from operating in the UK. The so called ‘White List’ of companies that can operate online gambling services in the UK without locating their key equipment here – and so by-pass having to meet stringent UK gambling rules – looks set to be torn up by the new coalition government, mark-

ing an end to the gambling boom in the UK. Or so it hopes. The Alderney Gambling Control Commission, one of the offshore, white list organisations slammed by the government has been quick to hit back. “There is no basis for suggesting that ‘around a million’ children are affected by addictions to online gambling especially considering that it is made in advance of the next gambling prevalence study and past studies which have indicated that there is a low prevalence,” says André Wilsenach, Chief Executive Officer of the Commission. “There is no evidence suggesting that the current white listing regime compromises player protection,” he continues. “The obvious reason for the increasing number of operators having relocated to overseas jurisdictions primarily relates to the high level of gambling tax that applies to operators being licensed in the UK and not, as suggested, because British operators were hoping to escape from their responsibility to protect British consumers.” The Alderney Commission is concerned that the UK Government may not fully appreciate the implications of introducing a system where all operators currently based outside the UK are required to be licensed by the UK Commission.

mBlox and NSPCC go mobile for charity as public sector cuts start to bite mblox has teamed up with Frudoo Mobile Media and Commerce to create a mobile charity short code that allows consumers to make donations to the NSPCC. Premium SMS payments allow charities to reach a large audience and raise funds through the donor’s mobile phone bill. This works as per the standard Premium SMS service with billing made through the use of short codes and keywords. These charity short codes however are exempt of VAT, enabling the full value to be passed directly onto the charity. The campaign ran for the month of December. Donating was made simple, by texting ‘GIFT’ to 70997 enabled a £5 VAT-free donation to the NSPCC

Christmas campaign. Donors were sent a “thank you” SMS after donating, and uniquely, donors could then add Gift Aid via SMS or mobile internet. This increases the value of donations to charities by allowing them to reclaim the basic rate tax on the donation. To add Gift Aid, donors either visited a mobile internet site, rendered appropriately for all smartphones or computers, or replied by SMS with their Gift Aid details. Frudoo worked closely with the Charities Group at HM Revenue & Customs to create an HMRC approved Gift Aid SMS solution, to allow the NSPCC and its beneficiaries to receive the full benefit from donations.

NEWS Ringback tone ads to hit $780m by 2015 as consumers chase free calls RINGBack tone advertising – remember that? – is expected to attract somewhere in the region of $780million annually by 2015 as recession hit mobile phone users opt-in to receive ads rather than pay for calls, suggests a study by Juniper Research. The ad format - where consumers opt-in to receive airtime or credit in return for allowing branded content as their ringback tone – has already been successfully implemented in a number of key markets, proving popular both with mobile users and leading brands. Juniper’s mobile advertising report found that some campaigns run on ringback tone advertising were currently generating substantial response rates. For example, a Pepsi campaign on Turkcell’s TonlaKazan service generated more than 25 million calls from 5 million users. Meanwhile, as ad-funded services are increasingly deployed in key ringback markets such as China and India, there is expected to be a gradual transition of service users across from paid-for ringback tone to

capitalise on free airtime offers. However, according to report author, Dr Windsor Holden, for the channel to gain optimal adoption, it was essential that content placed within the ringbacks was non-intrusive. “While ringback tone advertising has a number of potential benefits for network operators – notably providing a new revenue stream and reducing customer churn – both they and the brands must ensure that the advertising is contextual and does not jar with those listening,” says Dr Holden. “Otherwise all parties – operators, brands, even the service subscribers – could face a backlash from disgruntled callers, conceivably resulting in a decline in network voice traffic.” Holden has also found that the total advertising expenditure across all mobile channels is expected to reach $11.5 billion in 2015, up from $3.1 billion in 2010 and mobile channels are benefitting from brands’ strategic transition from above the line (ATL) to below the line (BTL) advertising.

A fifth of consumers playing social games online a fifth of consumers (19%) are now playing social games online, according to a new report by Econsultancy which looks in detail at a sector now worth close to a billion dollars. The 38-page Social Gaming Smart Pack is a guide to understanding the current industry landscape and where the sector is heading, with case studies of how brands such as McDonalds, Volvo and Disney have already invested in this space. The report includes the findings of an online survey of 2,000 consumers carried out by Econsultancy last month in association with Toluna. According to the report, the integration of social networks in particular has changed the way the world plays, as it has allowed social gaming to cross over to the mainstream. This is the first of a series of Econsultancy Smart Packs designed to enlighten marketers about the latest trends and exciting new developments across

the digital marketing landscape. Econsultancy’s Research Manager, Aliya Zaidi, said: “Gaming is one of those sectors that has emerged from the social media landscape and is now showing rapid growth, thanks to the explosion of social networking technologies. “The social gaming space is exciting because even in its relative infancy, it has shown itself to be highly profitable and to deliver strong return on investment, largely thanks to the sale of virtual goods and currency. The sector is an attractive area of investment for forward-thinking marketers.” Notably, the report finds that the typical profile of the average casual gamer does not reflect stereotype of the traditional, hard-core console gamer. The survey found a fairly even split between the genders when it comes to playing social games, as some 20% of women are social gamers, compared to 18% of men.


Gambling on mobile gambling 2011: the year of mobile gambling – but where are the opportunities for telemedia companies and how will they play out? the big news this month is that mobile gambling is very much back on the agenda, with FremantleMedia Enterprises (FME) making a big splash and looking to roll out slots on mobile, online and in land-based casinos. But this big name entering the fray with its well known TV brands – X-Factor, The Price is Right, Family Fortunes, to name but a few – is just the headline. Gambling operators running sports books have seen rapid growth throughout 2010 in people accessing their services using iPhones (and other smartphones, but mainly the iPhone). Meanwhile casino style games have slowly been gaining traction on similar high spec phones – we reported back in 2008 how Spin3 was targeting iPhones… looks like they backed the right horse – and the rise in consumers playing mobile games are all coming together to deliver the ideal climate for mobile gambling to finally come of age. OK, so we’ve said it a million times before, but this really is the year of m-gambling: consumers want it and, thanks to better handsets, clearer billing tools and the use of big name brands, casual – and therefore mass market – mobile gambling is ready to roll. So what is the opportunity? Well, m-gambling is a tricky one. Heavily regulated, it is largely the preserve of large gambling operators and their networks of existing games developers. There is some scope for development of games, but largely it’s a closed book. Where there is an opening to telemedia companies is in billing, traffic provision and aggregation, as well as helping tie together gambling operators with brands. The billing side would seem to be the most obvious in for telemedia and at World Telemedia in Malta last summer, the gambling panel was awash with talk of how best to bring together m-gambling and payments: as in the online gambling world, gambling operators want to offer as many payment mechanisms as possible to punters, so it makes sense to look at how mobile billing tools too can be brought to bear. But interest in Payforit and reverse billing is not as high as you might expect. The cut taken by the mobile operators and aggregators is proving, as in the retail sector, to be a real barrier to entry into these two hot markets for billing companies. The rise of the very devices that make m-gambling so much more likely to succeed are also making things tricky for operator billing and PRS. The devices are so like computers on the web that consumers user them as such, pre-registering cards online or on the smartphone and using such pre-paid m-wallets to manage their mobile gambling. This is a real issue for the industry, not just in gambling, but increasingly across the board. MIG’s announcement of a new TV interactive platform does let users use PRS to add credit, but it is just one of many ways. Retailers too are shunning these billing tools as the cost to them is too high. The issue is that these days no one considers mobile to be a channel that you pay extra for. In fact, like the web, consumers view it as free, cheap at best. And while there is plenty of opportunity out there for telemedia, 2011 is going to be a challenge in finding it. Editorial Editor Paul Skeldon | Sales & Marketing | Production Director Annika Micheli | Publisher Jarvis Todd To subscribe, please go to What we’ve been listening to Mirrors, Crocodiles | What we’ve been amused by Buzz and Tell | Who we’ve been following Steve Jobs | What we’ve been reading about Mobile Commerce| 2011 will bring... mobile gambling to the masses

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ANALYSIS Telemedia and Travel

comment & opinion >>

Mobilising travel Gary Corbett, Chairman of Oxygen8 Communications, outlines the potential for mobile technologies in the travel sector, from simple SMS based booking confirmation to transforming the entire travel process by using the mobile to hold ticket, boarding pass, baggage tracking, even biometric data the year 2009 saw the biggest decline in air passenger traffic in the post-war era, according to the International Air Transport Association (Iata). Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. The cost has been huge: Iata has estimated that airlines collectively lost $11bn (£6.8bn) last year, and stand to lose a further $5.6bn this year.* The industry believes that the worst has passed. However, adjusting to 2.5 to 3.5 years of lost growth means that airlines face another tough year, and must focus on matching capacity carefully to demand and controlling costs. The falling airline revenue has, of course, been matched by a decline in income for many sectors of the travel industry, from ferries to hotels, parking services to travel companies. And while some UK venues reported an upturn in 2009 as a result of the ‘staycation’ trend, a second successive poor summer far from boosted the credentials of the UK tourist industry. For every part of the industry, price is key but engendering customer loyalty remains a significant challenge.

Mobile Drive

So how is the travel industry going to address the challenges posed by this extraordinary decline in revenue? Certainly the shift towards online booking and online check-in has enabled the airline and hotel sectors to drive down costs. However, travel companies must now look beyond the Internet to attain further benefits in streamlined operations and improved customer service. With growing numbers of users now opting for the mobile as the primary way of accessing the Internet, mobile marketing has become a key component of the sales process. Indeed, one

major Japanese airline already claims to generate 5% of its sales via mobiles. In a recent survey by EyeforTravel, 30% of travel companies reported investing in “mobile” for the first time in 2009 and 75% of those maintained that mobile will become an increasingly important element of their digital strategies. Notably, the overwhelming majority of companies surveyed view SMS as a more effective marketing and communications tool than email. In fact, 80% of travel companies now use SMS to communicate with customers; and 60% are also using SMS internally to make business processes more efficient. But this approach is merely scratching the surface and will do little to address the cost reduction and customer loyalty issues now facing this marketplace.

Prioritising Activity

Mobile technology offers significant additional opportunities to drive down costs and improve customer loyalty. The challenge is prioritising activity and ensuring that service quality matches the demands of an increasingly savvy mobile user population. Right now, there is a real opportunity to streamline the post sales process, leveraging proven, robust mobile solutions to deliver value added customer services that make the travel process smoother for the cus-

tomer, but also less expensive to deliver for the industry. Certainly the demand is there, with users actively seeking the convenience of information to their mobile. Globally, the number of subscribers using mobile Internet services is predicted to rise from 577 million currently, to top 1.7 billion by 2013 and in the recent survey by PhoCusWright, 64% of respondents were keen to use their phone to access directions, over 50% to receive flight status alerts and over 30% thought

ANALYSIS Telemedia and Travel

comment & opinion >> receiving special offers on their phone would be a bonus. By integrating mobile solutions with core booking systems, travel companies can now deliver booking confirmation and information to customers via SMS, as well as day of travel reminders. The process is automated and significantly reduces the cost of customer communication. In addition, this information can be supported by travel service updates, location based direction services, including maps, and local weather/ travel information – all services that can be delivered at a low cost to provide significant customer value.

Additional Services

This provision of valuable and timely information also enables the company to up sell using promotional and last minute offers for both its own services and ancillary services including insurance, hotels, car hire, parking and

airport transportation. This enables organisations to cost effectively tap in to a new revenue stream whilst also extending the customer perception of the trusted brand. Companies can also reduce the cost of managing problems. By notifying passengers via SMS of cancellations and delays, itinerary changes and updates, the business can significantly reduce customer service costs. Even when passengers are en route, changes such as gate reallocation or simple departure reminders can both improve the customer experience and reduce expensive delays caused by lost or misplaced passengers. Looking ahead, the mobile device offers travel companies amazing opportunities to drive out cost. Mobiles have the potential to hold boarding passes, baggage tracking information and payment data making travel truly paperless and location independent.

There is also the future possibility that the mobile could be used to store visa and biometric information. What’s more, improvements in network speeds and the advent of 3.5 G and 4G will make accessing and distributing this information instantly from the mobile device a reality. The Internet may have changed the travel industry beyond recognition, but the widespread adoption of mobile technologies will undoubtedly deliver another fundamental step forward to drive down costs and improve the customer experience. As the industry faces its toughest financial challenge in decades, those organisations that embrace mobile technology will be best placed to improve brand interaction, drive down customer service costs and fundamentally improve the entire travel process from booking to arrival and beyond.

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ANALYSIS Media Trends for 2011

comment & opinion >>

2011: What’s in store? 2011 promises to be a challenging year, but many of those challenges could reap some great rewards. So what is in store? Tablets, social gaming, an end to mobile search thanks to QR codes... these are just some of the highlights to look forward to as is customary at this time of year – aside from diets and two visits to the gym – we take a look at what is likely to be hot in the industry for 2011. Of course, many key things from 2010 will continue to bubble along nicely – I’m thinking TV apps, the PRS registration scheme, the return of SMS etc –but there are many ‘new’ things that will mark 2011 out. So what’s up?

Insatiable appetite for Apps – but only if they can be monetized

When it comes down to mobility Apple’s App Store goes from strength to strength. Screen Digest forecasts the platform will deliver 6.76 billion downloads next year, up from just over 5 billion in 2010. That translates to 56 downloads – excluding iPad - per addressable user in 2011, with close to 10 percent of those apps paid-for and pulling in consumer revenues of €1.39 billion. Android has been enjoying significant growth in smartphone shipments but the slow roll-out of paid apps to additional markets has held back revenues from that source. A deal with online payment provider PayPal to enable direct Android Market purchases is expected shortly. But, 2011 will bring new opportunities for brands to engage with their customers through mobile as never before. With the arrival of in-app billing in the mobile payments market, OpenMarket regards 2011 as the year that Direct to Mobile (D2M) billing will provide consumers with the simplest and most convenient way of paying for both app purchases and in-app purchases for their smartphones. Throughout 2011 there will be a growing realisation that whilst apps are important, most apps have no value for the consumer. The key is to provide potential custom-

ers with content they are willing to pay for and in order to capitalise on this brands will have to develop unique content combined with in-app billing solutions.

Social gaming grows up…

A fifth of consumers (19%) are now playing social games online, according to a new report by Econsultancy which looks in detail at a sector now worth close to a billion dollars. Over at Facebook, social network gaming continued to grow apace in 2010, with the platform’s games hosting 670 million monthly active users between them at its peak. However, focus is changing, with leading operators such as Zynga, Disney Playdom and others shifting resources away from acquiring users and instead focusing on retaining them, to raise ARPU within established titles. One major publisher, Ubisoft, has not yet achieved major traction with its Facebook initiatives, and titles such as Castle & Co, Horse Saga and The Settlers: My City have not established activity comparable to the biggest game on the service. Ubisoft will need to build a stronger portfolio of social network gaming titles, if it is to compete with the most prominent operators in the space.”

…as Video Streamed Games-on-Demand get set for growth

Also on the subject of gaming, while video-streamed games-on demand clearly have impressive technological performance on their side, they are not likely to shift consumer games-buying habits in 2011. For one thing, says Screen Digest, a fully streamed service simply doesn’t stack up well against physical product when it comes down to the value proposition. The key to success for VSGoD services is shifting

away from the PC and into connected TVs, set top boxes, mobile and perhaps games consoles. Screen Digest forecasts Western European VSGoD revenues of just US$8.6 million in 2011, up from a mere US$700,000 in 2010.

AdSpend on Mobile Games

Juniper Research forecasts that adspend on mobile games will increase tenfold over the next five years. By 2015, adspend on this platform will reach $894 million, up from $87 million in 2010, fuelled by increasing brand interest in mobile as an advertising channel, and apps – of which games are the dominant sector. As discussed in the report, games such as Rovio’s Angry Birds are making a significant impact through offering full versions of their games free to end-users and funding them through in-game advertising. Opportunities in this area have been strengthened by the launch of key platforms designed to optimise the deployment of ads within applications, most notably Apple’s iAd in July 2010. Similarly, Juniper Research finds that games are being successfully deployed as marketing tools by brands, such as,

ANALYSIS Media Trends

comment & opinion >> while targeting the consumer market: it needs to offer a viable alternative as the iPad shows dangerous signs of topdown corporate adoption. Screen Digest is forecasting iPad sales of 13.7 million and 1.7 million units in the US and the UK, respectively, in 2011.

Pre-targeting, Re-targeting, Re-marketing

Barclaycard and Volkswagen, providing new revenue opportunities for developers, such as, Fishlabs and Firemint. According to Mobile Games report author Daniel Ashdown, “Angry Birds has been a huge hit over the last year on the iPhone since its launch; but arguably its relative impact, in terms of downloads, has been bigger on Getjar and, more recently, on Android Market, as a result of offering the game free with ads. Users get a great game for free, but advertisers get significant product/brand exposure; the same is true of mobile games as marketing tools.” Nevertheless, the report forecasts that, while growth in adspend on mobile games will be higher than end-user revenues, this latter business model will continue to be the primary source of revenue for players in the industry. By 2015, end-user revenues, which comprise those from pay-per-download and in-game purchases, will still be ten times higher than adspend.

Tablets go to war

There’s also a battle over tablets. The iPad has dominated the space to date, but faces competition in 2011. Samsung’s Galaxy Tab was the only serious rival over Christmas, with the manufacturer looking for 1 million unit sales by the yearend – though even that would fall some way short of the expected 5 million-plus shipments of Apple’s iPad in Q4 2010 alone. Research In Motion’s Playbook will launch in early 2011 but the positioning of that device will be crucial. RIM must cater to its legacy business segment

Personalised re-targeting, is the channel that allows advertisers to re-engage with lost customers via personalised banners across the Internet. Some of the biggest players in this market include Criteo, Struq, My Things Media and adGENIE. Even the search engines are giving it a go with Google’s Remarketing or Yahoo! Smart Ads. Personalised retargeting is quite a unique proposition and twist to display in some ways, to the point whereby dynamic personalised retargeting has been proven to drive increased CTRs and conversion rates from what is considered the typical 0.005% for traditional display versus personalised re-targeting which normally starts off around 0.8% CTR and has been known to reach as high as 5% CTR. The dynamic nature and flexibilities of re-targeting mean advertisers can optimise their ads in real-time, therefore responding to what their consumers really want and getting the most out of their investment. Again this is another example of display marketing taking on the qualities of paid search – and making it work for the advertiser. Combining our earlier prediction (Display marketing will mirror much of what is search in practice) with the retargeting model sees search marketing expanding its remit within the online space – claiming more investment, and presenting more opportunities to close the loop outside the existing buying cycle,” says Kimuyu.

Quick Response (QR) codes will replace “search online”

Some time ago we started to see the advent of search based call to actions in ATL advertising, where an advert ends with the line “search widgets online” rather than a website address.

Greenlight predicts that in 2011, QR codes will usurp search calls to action in display advertising. This is probably just as well given the hash most companies seem to make of search based calls to action when it comes to search engine optimisation (SEO), often failing to achieve or even try to rank naturally for the keyword they are encouraging people to search for. So what’s a QR code? A QR code is a “matrix” or 2D barcode that can be read by many mobile phones. It has a URL (among other things) encoded within it, letting advertisers replace the whole affair with a simple point and click.

Kinect gets traction

There’s a lot of buzz around the Microsoft Kinect, with Screen Digest forecasting sales of 4.45 million Kinect-enabled consoles over the holiday period. And while Sony has first-mover advantage in the motioncontrol console market with Move, it is Kinect that has momentum. For that reason Microsoft will edge it next year with worldwide Kinect-enabled consoles hitting 7.6 million, compared with just over 7.3 million Move-enabled consoles. The US will account for 55 percent of the Kinect total, with Microsoft selling 2.4 million Kinectenabled consoles in Western Europe in 2011.

Google’s TV

On the television front, Google is set to make a sizeable splash in 2011 as it rolls out its Google TV connected television offering, but the search giant won’t find the online and TV content push into the living room easy going. Broadcasters, operators, manufacturers and middleware companies have interests to protect. Clearly the platform has the potential to impact all aspects of the television business, from hardware through to content distribution, and may well disrupt established advertising and subscription models. But the control established players continue to exert over content is such that Google TV’s wings may be clipped before it manages even to get off the ground.

Trading Day, Seminars & Networking 11 May 2011 The Loft, Leeds


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