Keep your hands on the merchandise

Mike Dolan — Fri, 30 May 2008 11:03:20 -0400

by Jason Ankeny

Ask anyone with a working knowledge of the wireless industry to isolate the major challenges hampering mobile content adoption, and they'll inevitably point to discovery and access complexities as the prime suspects. But even as the user experience continues to improve, mobile data remains a tough sell, if only because digital content poses such a difficult merchandising proposition--after all, many hallmarks of traditional merchandising such as packaging design and retail display don't translate to digital content, which offers no physical product to promote.

But mobile's unique challenges are offset by its innovative opportunities. What separates mobile subscribers from other consumer demographics is the level of personalization operators and their content partners can offer--instead of the broad-brush merchandising approach common across conventional media platforms, mobile can pinpoint the behaviors and interests of each user based on previous shopping patterns.

The obstacles posed by mobile content merchandising resulted in Qualcomm acquiring content targeting solutions developer Xiam Technologies in March 2008. Xiam's My Personal Offers System targeting and personalization technology promises to individualize the user experience via relevant content offers and advertisements geared specifically to the consumer in question. "We offer the ability for an operator to understand who the subscriber is and make them offers on an individual basis based on their likes and dislikes, the content they've purchased before and what they're looking at on-portal," said Xiam Marketing Manager Martin Clancy. "Qualcomm realized this area is important for operators looking to build a content business."

According to Clancy, Xiam's MPOS solution builds a behavioral profile of each individual user based on browsing logs and related data,. It then matches the profile with the operator's content catalog to supply tailored recommendations. "We're playing matchmaker," he said. "We're offering each consumer a one-to-one offer."

Xiam employs five different algorithms to determine the recommendations and guarantees the content associations make logical sense--needless to say, you don't want to offer a Chris Rock comedy clip to a subscriber who's just downloaded a Christian rock ringtone. Sometimes the recommendations span product types: For example, offering the full-track download incarnation of a popular ringtone. Other merchandising efforts embrace the related-content recommendation model pioneered by Amazon.com. Clancy added that all of Xiam's recommendations are made in real time, an innovation necessitated by the rapid-fire changes affecting content availability.

Advertising affords another growing opportunity to promote mobile content, especially as it relates to personalized recommendations. "Taking a user profile and targeting the user with specific ads is a very powerful and exciting possibility for the operator to generate new revenue streams," Clancy said.

Content providers also are exploring new merchandising channels. At BREW 2007, Warner Music Group announced a series of over-the-air, downloadable, artist-branded mobile themes based on Qualcomm's uiOne data services solution, promising in one file download a bundled suite of mobile products including ringtones, wallpapers, full-track songs and games from popular WMG artists. Warner Music Group Senior Vice President of Technology Strategy George White said the bundled merchandising approach was inspired in part by the success of operator KDDI's Chaka Uta Full service, which offers full-track downloads complete with a series of preset edit points enabling consumers to create their own ringtones.

For all that's unique about mobile merchandising, some Marketing 101 principles remain consistent regardless of the product or service in the spotlight. Product placement is critical, and in mobile, the prime real estate is on the carrier deck: A recent report issued by market analysis firm MultiMedia Intelligence states that off-deck revenues accounted for just $3.4 billion of $18.5 billion in total premium mobile content revenues reported during 2007.

Pricing and discounting also retain their power regardless of the merchandise in question. "Pricing is still a challenge, and something we're working hard to solve for operators," Clancy said, citing promotional tools such as bundling as key elements to foster content sales growth. "Promotions drive usage by providing value to the user--‘Buy one, get one free offers,' that sort of thing. But that requires integration with the operator to bring billing and provisioning systems closer in line with their portal."

Whatever merchandising avenues operators and content providers choose to explore, Clancy said relevance is paramount. "Operators must bring users closer to them, understand them better and offer the opportunity to consume content that's relevant to them," he said. "This is not the Internet. It's not the same proposition. It's a case of getting serious about this channel and enabling users to interact with us in a meaningful way."