Pressure on Traditional MNO Revenue Streams dramatically Reduced with Move into Mobile Advertising

•   Compelling mobile advertising business models described in major, illustrated, industry White Paper
•   Mobile advertising will deliver important new revenues

Dublin, 29th July 2008 – ‘Understanding the Mobile Advertising Business Model’ is the title of a new white paper from leading mobile advertising solution pioneer and global supplier of messaging and media platforms to mobile network operators, Jinny Software. 

The 3,000-word white paper sets the scene of falling operator revenues and declining ARPUs from traditional voice and data services, as well as regulatory requirements forcing service pricing downwards. It spells out the need for operators to seek alternative revenue streams and explains how mobile advertising offers an exciting new revenue opportunity, though one that is complex and needs to be clearly understood.

Cathal O’Toole, Jinny Product Manager responsible for the company’s work in mobile advertising and author of the white paper, stresses that it is important to understand some of the drivers of the business model of mobile advertising in order to determine what impact this new revenue source will have on customer ARPUs and operators’ total revenue streams.

O’Toole explains, “In this new business model, the customer is the advertising industry and the subscriber is the audience. Rather than charging subscribers for usage of the telecoms service, the mobile operator will now earn money from the advertisers and advertising/media agencies … The subscribers, in fact, may actually end up paying less as some of their services are subsidised.”

Jinny’s pioneering expertise in this new mobile / media sector underpins this important text, which goes on to consider the incentives operators must offer to subscribers in order to ensure they opt-in to the advertising campaigns launched by advertisers across a network.

Together with discussion as to what advertisers might, themselves, be willing to pay to deliver an advert, O’Toole stresses that, “It is the delta between the advertiser payment and the subscriber subsidy that will provide a revenue source for the operator, and is key to the business model.”

With numerous informative graphics, the white paper looks in illustrative detail at the impact of mobile advertising on ARPU, the revenue earned and subsidy paid for SMS, MMS, WAP/HTTP advertising and the net cash flows per quarter that can be expected by operators.

In relation to ARPU and taking UK prepaid users as an example, detailed figures explain how ‘the percentage impact of mobile advertising on prepaid ARPUs is likely to be up to three times higher’ in comparison to prepaid / postpaid users combined, with ARPU improvements of between 10% and 20%. 

One key message of the white paper is that operators must choose a mobile advertising solution that can deliver advertising on a variety of media and in a variety of ways. The in-depth discussion contained in the paper illustrates Jinny’s comprehensive understanding of this exciting new sector.

With detailed sections on: ‘What the advertiser pays’; ‘The value of targeting’; ‘Buying subscriber buy-in’; and ‘Analysing the return on investment for the operator’, Jinny’s Mobile Advertising white paper delivers major, objective guidance that will help the mobile and media industries optimise and agree on the most effective ways for both to move forward and utilise this new opportunity, together.

Jinny’s White Paper: ‘Understanding the Mobile Advertising Business Model’, by Cathal O’Toole, is available for download from: http://www.jinny.ie/solutions/mobile_advertising.463.html