The Role of Mobile Advertising in Customer Retention

Once again we are taking a deeper dive in the recently published Nokia 2016 Acquisition and Retention Study .  The previous posting on the more granular report series associated with the study was on how mobile service providers could leverage service bundling and connected device offers to attract and keep subscribers.  Next up in the series is the report on the impact of mobile advertising on customer decision making about who will get their business.  As with the rest of this series, Mobile Advertising, is now available for download and review.

I will not leave readers in suspense.  The most interesting finding was that despite the explosive growth of mobile advertising in general, its use for promotional purposes by mobile service providers in the words of the report are, “still a relatively untapped area and ripe for operators to explore.”

Just how “ripe” an opportunity is reflected in the side-by-side graphics below.

Turns out that most current subscribers do not receive mobile ads from their service providers, but do not appear to be averse to getting them.

Another interesting finding was the types of mobile ads being received. 

Again, the findings highlight opportunities galore.  Interestingly, despite all of the supposed concentration on reducing churn by enhancing the customer experience, discounts (i.e., customer loyalty efforts) are a relative blip on the radar.

In fact, on a personal note, I have long believed that communications and cable companies in general should provide loyal customers the same discounts being offered new customers, and we should not have to ask.  Indeed, if I have to ask and I don’t get satisfaction my next click or call is to a competitor.

There is a lot more in this report that is worth spending some time on.  For example, there are insights into what customers are willing to receive in terms of mobile ads in the categories above along with the differences in attitudes if you are in a “Transition” versus “Mature” market.   

There is also some advice on why mobile service providers need to be careful in doing mobile advertising since knowing the proclivities of your target and being able to reach and not overreach is critical.  Plus, the mobile experience, unlike the fixed one, has its own challenges driven by historic expectations of a less intrusive experience in general.  Where we do expect and will put up with ads is in conjunction with gaming apps and online games in general. 

What the report is recommending is precision targeting and rewards as incentives to get user to agree to look at ads based on local attitudes. It also notes that:

Programmatic advertising and ad-blocking represent the main route that operators are exploring. Programmatic advertising will allow operators to provide consumers with timely and relevant ads, reducing the risk of being perceived as intrusive. Adblocking proves to the industry that operators are attempting to protect their customers, and their mobile experience, from disruptive practices.

The report concludes by saying that consumers know what they want to receive, how and when, and that it is now up to operator to, in essence, not just listen to their customers but actually hear them and respond in a manner that is in the consumers’ zone of reasonableness. This means on a variety of metrics including offer customization/personalization, price and such things as frequency of contact and time taken to digest information.  There are certainly risks associated with mobile advertising by operators of their own services and products, but done properly the rewards could be substantial.