Alcatel-Lucent platform targets operator ad opportunities

In a week when “over-the-top” mobile ad wars are heating up between Apple and Google, Alcatel-Lucent – best known for its network equipment but increasingly pushing into apps and solutions – has weighed in with a platform to help operators wrest back control of mobile advertising.

Alcatel-Lucent’s new Optism platform is designed to let mobile operators control more of their mobile advertising destiny, rather than depend on ad networks run by others. In particular, Google (with its AdMob acquisition) and Apple (with its Quattro acquisition and new iAd ad platform) would like nothing better than to control not only mobile banner sales but more advanced location- or geo-based mobile advertising, as well.

Early operator efforts in mobile advertising have largely focused on controlling the user experience via on-device portals and pushing advertising messages there. But that approach won’t work in a world now ruled by smartphones and mobile apps.

That said, operators still own large parts of the customer’s mobile experience and should be open to aggressively turning those relationships into ad revenues, said Lisa Ciangiulli, Alcatel-Lucent director of marketing-global advertising solutions.

“The advertising industry is very different than the telecom industry,” Ciangiulli said, a point that both the vendor has had to address itself and on behalf of its carrier customers as well. “The key thing is that an advertising solution must be ecosystem-based; this is a business problem, not a technology problem.”

To that end, Alcatel-Lucent has chosen to play a “market-maker” role with its solution, sitting in the center with a hosted solution that will ultimately be used by not only mobile operators but ad agencies, brand advertisers and other ad industry participants, as well. The ultimate goal is to aggregate ad inventory from multiple mobile operators – including initial launch customer Orange Austria – and make that inventory available to many ad agencies in aggregate form. The platform is designed to function on a revenue-share basis, allowing operators to get involved with new advertising opportunities without a large upfront investment.

That strategy – focused around a hosted platform and revenue-share monetization model – is becoming a go-to approach for Alcatel-Lucent. The vendor’s recently announced application enablement and API bundling strategies are also built on a rev-share, marketplace-centric model.

Also unique in Alcatel-Lucent’s advertising play is that the focus will not be on banner ads, which marketers can already buy from many ad networks and exchanges, but rather on units and capabilities that mobile operators can offer uniquely, notably permission-based marketing campaigns (thanks to the operators’ customer relationships) with marketing messages delivered via SMS, MMS or as a screen overlay (all add units that mobile operators are uniquely positioned to offer), Ciangiulli said.

In addition to initially working with Orange, Alcatel-Lucent has also partnered with ad agency Mediacom, part of the global WPP group of ad companies, as well as with the Mobile Marketing Association to build an ad platform that suits the industry's needs, Ciangiulli said. In addition to delivering a hosted ad platform, Optism includes a media arm that brokers relationships between mobile operators and advertisers.

Up to now – and with a focus on low-value banner ads – mobile operators “have not been getting a large return on investment for their mobile advertising efforts,” Ciangiulli said, noting that the explosion in device-specific apps and publisher content will likely mean that mobile advertising will go the same way as Web advertising – “end users know to go to other places [beyond the operator portal] to get the content they want.” Advertising messages will follow.

That said, by focusing on building permission-based relationships with their customers, and learning a lot about their likes, desires and in some cases their [anonymous] mobile behaviors, operators can play an important role in the mobile advertising ecosystem. What mobile operators need to do is take this “conversational marketing style to the next level,” Ciangiulli said. Alcatel-Lucent’s platform can help by providing the technology to make this happen, as well as aggregating ad inventory and access to customers across multiple operators, which should appeal to advertisers that would otherwise have to piece together that inventory from multiple sources.