Alex Moukas is CEO of Velti, a global provider of mobile marketing and advertising technology. Velti announced the acquisition of CASEE, a mobile ad exchange and mobile ad network in China, last month as the company expanded its footprint in China. Read the release.
In January, Moukas discussed his company and trends in the mobile space with AdExchanger.
AdExchanger: Regarding the mobile advertising space and the recent developments there, what's surprising you about mobile development?
AM: There are a couple of different things. First of all, as a company, we span across mobile advertising and marketing. In terms of nomenclature, mobile advertising is like banner ads. Mobile marketing is what happens after the click. In terms of things that are surprising, we feel the US market is growing extremely fast on the marketing side right now. Yet, obviously, the advertising side is what everybody is focusing on, because that's where the closest analogy to the online world is. We play there through our Mobclix advertising exchange. It's where Millennial is focused on 100 percent; however, for us as a company, in addition to the significant growth in the advertising space, we also see significant growth on the marketing side of the business. That's number one.
Number two, we see different surprising developments in different parts of the world. In the US market, a lot of our customers approach tablets as an extension of mobile, as opposed to an extension of their online budgets, and that makes a huge difference. And in other parts of the world, we're seeing the leapfrogging of mobile development cycles, especially in parts of Asia.
Can you share with me a typical use case for what you're seeing right now on the marketing side of the business? How does that client engagement work?
Of course. If you look at Velti as a company, you can look at mobile advertising as a funnel that gets consumers through a mobile presence. And, since our customers are spending a lot of money and effort on traditional media, a lot of times they create what we call "mobile calls to action" and insert them in traditional channels. The majority of consumers that come on the "post‑click engagement" actually come from traditional media, not necessarily just mobile advertising.
So, let's say one of our customers is a major catalog retailer. On every single page on the catalog, you see a mobile call-to-action. You take a picture of an item using your smartphone. We can tell you where to find that item in stock. You can make a reservation or you can walk into a store and pick up that item.
For specific clients such as these, we're not trying to sell them mobile because it is new, sexy or different. We're selling it to them because it makes a difference on their numbers.
What other vertical trends are you seeing from your clients?
In general, vertical we are focusing on includes automotive, the major retailers, QSRs, packaged goods, carriers, and pharma and financial services. Everybody knows that they need to be spending more on mobile.
The question for us becomes, “Do we have the right agency and the right CMO that are willing to invest and understand how to integrate mobile with the rest of their spending?” If they're not an early adopter, we might as well try our luck with somebody else that is. It's much more important to have the right‑minded CMO on the other side of the table - including their agency - as opposed to the perfect vertical for mobile.
What do you say about the use of location‑based advertising today? How important is an integration of location into a campaign now?
There are a couple of different answers to the question.
In general, I would say that we're using location across advertising and marketing to optimize the conversion rates of consumers.
In terms of targeting, I would say that location is absolutely a valuable part. Depending on the campaign, the customer or where the consumer is in their journey through the funnel or the pipeline, it can be more important or less important than other characteristics. I couldn't say that it's all about location. Location is interesting. In a lot of cases, time of the day is interesting.
Let me give you an example ‑ a consumer receives a coupon or a QR code. Is it more important to target the consumer when they're close to a store or around their commute time when they're just starting their commute journey and going to be passing by that store 10 to 15 minutes later? There's a lot of nuance in the answer. We try to focus a lot on optimization and data to derive the right type of weight we should assign to each one of the targeting elements.
How does Velti "hook-in" cross‑channel?
I would say that, in general, the longer somebody is our customer, the more of their systems we integrate with, both in terms of their agent systems and their back office systems. We integrate with their DART account, Google Analytics, Omniture account and so on. The more you try to drive consumers, the more data you can leverage and the more you need to integrate.
Right now, you're absolutely seeing separate mobile budget line items across our major customers' budgets, but you also see a much higher level of synchronization. Again, on the display and the advertising side, theoretically, you should be seeing more convergence, frequency and copying across everything. But I don't think there is going to be a real solution in the market there for the next five years.
On the marketing side, on the post‑click side, consumer interaction models are vastly different between online and mobile. You click on a Ford Focus ad on your PC, you go to its "configurator" website, but you do it on your cell phone and you go to the closest dealer for a test drive. This is why the marketing piece of mobile is going to be massively different than the marketing piece of online. With the advertising piece of mobile right now, you see different players there because there is so much nuance that many people are trying to make their online platform mobile by adding a couple of targeting characteristics. They end up finding it's not that simple. It just doesn't work, even on the advertising side.
I'm going to swing a quick question over to the idea of Apple, and their deprecation of the UDID. What kind of impact does that have on you, and could you talk a bit about the solutions that you have to go around it?
Sure. Unlike other folks that are only focusing on advertising, we combine marketing with advertising. On the marketing side, we have more than 600 million consumer profiles right now that we can use for targeting. If you think about the potential size of the market and potential impact, it's really small, but if you take the extreme scenario where nobody would allow any targeting on the advertising side, remember that advertising through Mobclix can leverage our mobile marketing data, where we have detailed opt‑in data from 600 million consumers. It's not like we lay our advertising data in Excel to do our advertising targeting.
That said, regarding Apple, it's a typical case where you had an 800-pound gorilla start to move slightly. Because mobile is a relatively new space, people don't really understand it. Our space is noisy. Online, nobody confuses a Google with an Omniture. In the mobile space, everybody's doing something mobile.
To answer your question specifically [about Apple’s UDID deprecation], on the technology side, there is a solution. But, first of all, Apple didn't do anything. Meaning, they deprecated it, but it is still in there, so the next date for them will probably be sometime in the next six months in removing that. But even if they do that, we already have a technology solution on the ground, cooperating with other industry leaders around, primarily MAC addresses, and we're leveraging that. We don't really see any effects on our advertising efforts, because there are a lot of different ways to essentially reach out and target the consumer. It doesn't have to be UDID.
Given concerns around cookies and user’s privacy, what gets mobile to that true one‑to‑one world eventually?
In my mind, when you combine advertising and marketing, the only thing that really gets you there is the consumer explicitly opting into a company. I would say that most people don't realize in the US that mobile on the data end of things is massively more complex than the Web in two dimensions.
Number one, quality of data. In a world where you have multiple ways of accessing mobile phones and you're combining advertising and marketing, you absolutely need to be reconciling, quick stat information with MAC addresses. Then, you ID that information with peoples' cell phone numbers. We're the only people out there who have the technology to do that and that’s because we're combining advertising and marketing.
The other dimension is regulatory. On the web, you can work off a quasi‑single datacenter. In mobile, you have specific regulations, which are local regulations. Within the EU, personal and travel data would need to be in service within EU borders with signup behind their firewalls. With Russia, not really, but if want to do business there, you have to be there.
It's much more nuanced, which means that it's a technology problem. A company like ours needs to do the processing on a local level and then push up non‑personally identifiable data that you can use for targeting and further optimization at the global level.
Breaking it out between mobile web versus mobile app, how does Velti look at that opportunity? Do you focus on either one of those? Or is it just an integrated opportunity and you have to deal with both at the same time?
At the end of the day, it's an integrated opportunity. Through our multiplex efforts, we spend a lot of time on the in-application environment.
As with any major market, people started with quasi-spot solutions in the earlier years, and then they moved more towards integration. It doesn't happen overnight.
Regarding potential acquisition strategies for Velti, are you starting to think more about how you layer-in your own expert services versus how you find the latest technology?
It's critical. You need both.
You need global technology to run the single campaign in a couple of dozen countries and have local agencies staying close to the local creative –but, do that on the same macro, global template.
Let me put it another way. If you have technology and if you put technology in the hands of a customer who's not savvy or an agency that's not savvy, you only get the results that you don’t want. We spend a lot of time on the agency and Internet channel side, training agencies. They are approaching mobile in the same way that they've been approaching online, which is they have built in‑house teams of experts that are using third‑party tools. These third‑party tools in mobile are Velti tools.
Everybody knows mobile is happening. Walk in to an agency and one can speak to them about mobile. Everybody loves it. How you help them drive specific spending in the mobile channel by enhancing their customers' needs is the most important issue.
By John Ebbert