TechZine – Alcatel-Lucent

Business

Youths Say Yes to Multi-screen Advertising

Highlights

  • Advertising helps drive multi-screen innovation and new business models
  • Multi-screen can expand the reach, impact and effectiveness of digital advertising
  • Service providers can profit from understanding what multi-screen services users want

Demand for a constant connection

Young people today are more adept in the world of information and communications technology. Multimedia and gaming applications have become essential to their personal expression and relationships. Teens and young adults are also accustomed to the blurred lines between content and commercialization. This convergence of content and commercialization has led youth to accept advertising as part of the content package.

However, they no longer simply want to be connected. They want rich, Web 2.0, interactive multimedia experiences that can be enjoyed according to their needs, and on whatever device they are using — PC, TV or mobile.

The youth market is often an excellent predictor for the future direction of communications technology. The Alcatel-Lucent Market Advantage Youth Lab was created to understand the wants and needs of this important consumer segment. The Youth Lab provides unfiltered access to the perceptions, attitudes and behaviors of 13 to 26-year-olds from around the world. Insights gleaned from the Youth Lab help service providers define their strategic direction by understanding end user purchasing intent and buying behavior to pinpoint market opportunities.

A qualitative and quantitative investigation

In 2009 Alcatel-Lucent Market Advantage launched a multi-phase investigation to gauge end-user receptivity to multi-screen advertising.

In the qualitative phase, we reached out to a subset of our Youth Lab. Answers were sought to key topics relating to the 3 devices (PC, TV and mobile) used as multi-screen services endpoints. These topics included:

  • Type of ads that worked best for each device
  • Preference on how to interact with ads
  • How ads could be improved
  • Which ads worked best for each device, and if/how the user responded
  • Parameters for sharing personal information

Findings related to multi-screen advertising receptivity included:

  • Ads should be relevant, complement user experiences, and be actionable regardless of device
  • The PC is a key component — not only as an advertising medium, but also as a tool to research or get information before a purchase
  • “Click” and “search” were the preferred ways of interacting with multi-screen ads
  • Respondents would share personal information in exchange for things they cared about such as coupons, deals, information and causes

In the quantitative phase, 2258 Youth Lab members from 11 countries (including U.S., U.K., Canada, Mexico, Brazil, Germany, France, Spain, Italy, Japan, and China) were interviewed to validate and quantify the previous findings. While results varied slightly by country, the following insights were gained:

  • Make ads personal. Young consumers want targeting to go beyond age and gender, making ads personally relevant, based on their specific interests.
  • Give consumers control. Teens will share personal information to get relevant ads, but they want greater control over this process — from deciding what to share, to choosing when to delete information or opt out.
  • Make ads interactive. Young consumers want opportunities to engage with ads and express opinions such as a thumbs up/thumbs down voting system.

Multi-screen advertising value chain opportunities

The research indicated that multi-screen can provide benefits to members of the advertising value chain including service providers, advertisers, and end users. Key areas to target include:

  • Ad type opportunities
  • Interactivity and purchasing behavior
  • Profiling and privacy

Ad type opportunities

The quantitative group was asked to consider various types of ads on PC, TV and mobile devices. Understanding end-user perception of ad types based on device is important for advertisers to determine their advertising spending allocation.

Table 1 shows the dominance of the PC as the device of choice for advertising. Despite current user reluctance to have their handheld devices inundated with ads, it also indicates a surprising strength of mobile devices versus the television. This receptivity toward mobile advertising demonstrates the social dynamic of a generation weaning itself from a static TV experience toward real-time interactivity enabled by the Internet and mobile devices. Table 1 also highlights end user ad type preferences by device.

Table 1: Receptivity to ad types of mobile, TV, and PC viewing platforms

Interactivity and purchasing behavior

Understanding end-user interactivity and purchasing behaviors is important for service providers to employ new advanced business models and grow new non-user generated revenues through agreements with media and advertisers. It is also important for advertisers who want to reach customers across multiple devices; improve campaign continuity with a broader reach as well as enable multiple touch points with a single customer through multiple channels.

Profiling and privacy

Striking the right balance with profiling and privacy helps advertisers target ads. Incented subscribers can provide the interface needed to target devices and profiles; however, it is imperative that subscriber data be protected. Consumers who opt-in to privacy/controlled/permission-based services also benefit from experiences, items and information they desire at little or no cost.

From a functional perspective most of us are aware of how this works on the Internet. User behavior via cookies, pop-up ads, clicks, transactions, and even free analytics from companies like Google, track the effectiveness of web advertising. Figure 1 shows what this looks like from a service provider perspective as multi-screen services opportunities expand.

Figure 1: Ad delivery and management for TV and mobile

The power of multi-screen

Today young people around the globe are technologically savvy. Their continued desire to be connected will drive innovation and present game changing opportunities for:

  • Service providers to monetize their unique ability to deliver personalized content and advertising over multiple screens.
  • Advertisers to leverage service provider content delivery, subscriber profiling, and market coverage capabilities to expand the reach of ad campaigns and increase efficiency and effectiveness
  • End users to personalize and control online experiences

The power of multi-screen is becoming both obvious and compelling for service providers, advertisers and users. Logical extensions to current triple play activities include the ongoing rollout of IPTV, the convergence of the PC and TV content and interactivity, and adoption of the mobile device as a constant communicator and electronic wallet.

Alcatel-Lucent Market Advantage research can help you understand market acceptance, target addressable markets and build business cases. Coupled with Alcatel-Lucent multi-screen solutions available today, we can help you develop this growth opportunity.

To contact the author or request additional information, please email techzine.editor@alcatel-lucent.com.