Mobile Data Mediation - profiting from the exponential increase in mobile data use | Mobile Marketing Association
August 12, 2010

By John Giere, Senior Vice President, Products and Marketing, Openwave

The growth of mobile data services has taken a significant upward jump around the world. Operators are increasingly seeing demand for data services such as personal GPS systems, social networking, mobile Internet, and location based services to compete with core voice and messaging traffic.

At present, it’s a relatively small proportion of consumers who have smartphones which account for a large proportion of data traffic. AT&T reported in December 2009 that 3% of its customers consumed 40% of its network resources.  But smartphones are the fastest growing category amongst mobile handsets, and so the proportion of consumers demanding data services will increase significantly over the coming years.

It’s not just new smartphones which are driving increased consumption either. Many data plans encourage subscribers to use more data on their netbooks or laptops via air cards.  Particularly in the North American, European and Asia-Pacific regions, operators heavily promote unlimited all-you-can-eat data plans. For instance, in Europe, incentives include notebooks and netbooks with free mobile broadband. These popular promotions have huge implications: even at 5 GB per month, converting 6 per cent of the world's PCs users to mobile data usage will produce 4,000 petabytes of data traffic per year.

In order to manage this exponential growth in data, and more importantly, to profit from it, the mobile industry needs to develop sophisticated ways to mediate all the different pieces of data within the mobile eco-system. At Openwave, we define ‘Mobile Data Mediation’ as the ability to access and integrate multiple sources of mobile data, such as aggregated data activity and browsing history, in order to create valuable insights for mobile internet organisations, such as advertisers, publishers and applications.

There are some clear ways this can be leveraged.  In the past, mobile data analytics tools were used primarily to help operators understand their customers and to better manage data traffic. However, an operator’s ability to understand mobile browsing habits, coupled with aggregated data activity, can be used as a powerful targeting tool for mobile advertising or for content providers. 

Many industry observers believe that mobile advertising is set to hit the mainstream.  Chetan Sharma consulting conducted a survey which is forecasting a 100 per cent growth in 2010 in the USA, while Kelsey Group predicts that the market will be worth $3.1B in 2013, up from $160M in 2010. This predicted rise is due to the growth in sophistication of the medium, and also the ability to closely target individual users.

For example, we recently saw an RFP from a mainstream brand which wanted to identify and target special promotions to “expectant mothers.” These mothers would be identified using a combination of age, gender, past mobile browsing behavior and categorization so the advertising was specific to them. Mobile technologies are uniquely capable as a channel of this targeted approach and as a result, can clearly differentiate from other marketing channels such as direct mail, TV, billboards, or banner advertising online. In addition, this level of targeting also benefits the willing user who will receive much more relevant advertising, which can have real value for them. 

This targeting methodology could also be used by content providers, such as retailers for online shoppers. Instead of displaying advertisements to customers, retailers could surface individual products which are particularly relevant for users. This type of methodology is already used on the PC internet and is highly successful. For example, Amazon generates 33 per cent of its revenue from recommending individual products to customers. Once the browsing experience becomes more user friendly on mobile phones, retailers could do the same thing, but with a greater degree of sophistication. 

Mobile operators continue to occupy the ideal position in relation to the end user. From their central vantage point, operators can collect and accumulate the knowledge that is key to monetizing the mobile internet. The more an operator understands mobile browsing habits, coupled with aggregated data activity, the more they will be able to provide services that are not only relevant, but services that subscribers are willing to pay for. However, for this to be a success, operators will need to start looking beyond their traditional eco-system to include a much broader number of players so that together they can address these issues, and profit from users’ increasing appetite for data.