AlcaLu Dishes Up Mobile Ads

E-Plus Mobilfunk GmbH customers in Germany can now opt for free minutes and text messages in return for accepting advertisements on their cellphones, thanks to a new mobile ad server from Alcatel-Lucent (NYSE: ALU).

The new service marks the first public carrier customer for AlcaLu's Advertising Selection Server, which is part of what the vendor calls its application enablement strategy. The other part of this strategy involves interactive TV advertising, but that's not part of the E-Plus deal. (See AlcaLu Mad for MSO Ad Market, AlcaLu Teams on Mobile Adverts, and Operators, Advertisers Sync Up.)

The idea, in a nutshell, is to help carriers make more money by capitalizing on the data they already have about their customers. AlcaLu provides the mobile advertising solution as a hosted service to E-Plus.

"We're using profile information from an end user, which remains in the domain of a telco," says Rik Missault, Alcatel-Lucent VP for digital media and advertising. "We're using user preferences to do ad insertion and ad selection."

In Germany, E-Plus has launched the ad-supported service through a separate subsidiary called Gettings. Monthly subscription and pay-as-you-go customers can opt in to three different service packages -- small, medium, or large. In exchange for getting the ads, users receive free minutes or texts, or a top-up amount or credit on their bill.

For example, in the small package, users will receive 10 advertisements per week and get 15 minutes or 15 texts for free, or a €1 (US$1.40) top-up or credit. With the large package, users can get 30 free mobile call minutes or 30 texts, or a €2 ($2.80) top-up or credit.

The service is not free, nor should it be, according to Missault.

"Advertisements will never compensate or replace all the revenues telcos have from end users," he says. "It can be a complement. By getting [ad] messages you cannot get a completely free service -- that won't fly.

"It's a nice addition, but won't replace telcos revenues today."

The free model -- or nearly free -- was pioneered by U.K. startup Blyk , which has recently moved away from its original MVNO (mobile virtual network operator) strategy as it expanded into Europe. Blyk specifically targets 16- to 24-year-olds for its ad-funded mobile service. (See Blyk Bags $50M, Blyk Bits, Blyk Preps Summer Launch, and Blyk Claims 100K Members.)

But AlcaLu is not dismissive of the mobile ad startup.

"What Blyk has shown is that mobile advertising to the youth segment is working," says Missault. "People do accept ads so long as it's relevant for them."

There are some Germans who will put that theory to the test in the coming months.

Meanwhile, Alcatel-Lucent is initially focused on the European market for this mobile ad service, but it's looking to take it to Northern Africa and the Middle East, where Missault says AlcaLu sees "the low-hanging fruit" due to the higher number of pay-as-you-go customers in those regions.

— Michelle Donegan, European Editor, Unstrung

iponthebrain 12/5/2012 | 4:01:42 PM
re: AlcaLu Dishes Up Mobile Ads

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