ADOTAS EXCLUSIVE — The industry is still wary about mobile advertising — does it work, how significant is the ROI really, etc? Apptera’s CMO Randy Haldeman sat down with Adotas to explain how his firm, which bills itself as the voice in mobile advertising, got its start and where it sees mobile going (hint: up up and away!) in the current, decidedly grounded, fiscal climate.
ADOTAS: Can you give us some background on Apptera and the evolution of the company?
RANDY HALDEMAN: Apptera was founded in 2001 to provide voice-automated technologies for search and commerce. So, for example, if a caller wanted the location of the nearest Bank of America ATM they could call Bank of America’s 1-800 number and our speech-enabled application would deliver voice directions to the callers’ phone. We then partnered with AT&T to let the telecommunications giant use our technology to power its free 411 services, by delivering contextually relevant ads to callers. In the past year, we have further expanded our mobile advertising network to deals targeting the movie-going public seeking showtimes and locations. For example, callers for a certain movie showtime might hear an ad for a future movie and be asked whether they want a text reminder before that latter movie is released.
ADOTAS: What was lacking in the industry that motivated the formation of Apptera?
RANDY HALDEMAN: Three things: Technology, targeting and text. The company was founded as a technology provider, enabling the power of voice to bring added utility to telephone calls. As the power of voice became more apparent, Apptera began to focus its technological story on targeting—the ability to serve a relevant ad to a certain mobile-user behavior. Realizing that the mobile platform was a confluence of voice and visual interaction, the company began enabling advertisers to target ads that used both senses: An ad would be delivered via voice and invite the mobile user, for example, to choose to receive a visual, or text-messaged, reminder of an even or a special service.
ADOTAS: Apptera provides in-call advertising, and in your FAQs state that having an in-call ad is better received and matched contextually to the nature of the phone call. Do you have statistics to back up this statement? Have you ever had any trouble with advertisements not matching contextually with the business being called?
RANDY HALDEMAN: Statistics: As the Kelsey Group reported in October ’06, voice ads get five to ten times higher click-through rates than banner or keyword ads.
When we ran our Hulk ad, we found that those that heard the audio ad only were 40% more likely to call back and ask for the Hulk movie, and those that got both the audio and text ad were 133% more likely to call back and ask to see The Hulk.
ADOTAS: Any trouble with “not matching?”
RANDY HALDEMAN: There are usually two types of ads. One is a generic sponsor ad, which isn’t targeted off user-input, but is targeted based on the number being dialed, while the other ad is specifically triggered off a user response. For instance, a caller to a movie show-time application might hear “This call sponsored by Coke. Nothing goes better with movie popcorn like a nice tall Coca-Cola. Pick some up at the theater today.” That ad might not be as targeted as a geo-targeted ad or a demographic-targeted ad, but it shouldn’t offend anyone.
ADOTAS: Have you had any problems with customers receiving ads they did not opt-into?
RANDY HALDEMAN: Users have come to expect ads in free services. For instance, someone could complain about the Coke ad above, since they didn’t explicitly opt-in to hearing it, but they did implicitly opt-in by calling a free movie-ticketing service. Just like on TV and radio, a customer didn’t explicitly opt-in to ads, but they are getting the show or music for free and expect them.
ADOTAS: Demographically, what is the breakdown of your audience?
RANDY HALDEMAN: We call it the trend-spreader demographic. Primarily 18 to 34 year-olds. 99% have mobile phones and social network pages. Household income around $64K. 55% male, 45% female.
ADOTAS: Who are your clients?
RANDY HALDEMAN: Publishers include BankAmerica, AT&T, Movietickets.com, AOL Moviefone, Jajah and BlogTalk Radio. Advertisers include over 4,000 medium and small businesses, mobile entertainment companies, and several Hollywood Studios.
ADOTAS: What kind of business model does Apptera use?
RANDY HALDEMAN: We charge advertisers a fee to play their audio ads to callers and then split this revenue with our publishers. We charge on a cost-per-play model. Cost per play is more valuable than an impression because it’s guaranteed to be heard and noticed by the listener, and has proven to have a higher click-through rate. Advertisers today generally spend between 3 and 6 cents per play, based on the interactive features of the ad. Click-through rates usually range from 2 to 8%.
ADOTAS: How has the decline in the economy affected mobile advertising? Has Apptera felt the effects?
RANDY HALDEMAN: We have yet to feel any effect of the economic troubles that may be affecting marketing budgets. In fact, more advertisers are turning to us because we can guarantee the ad was heard and provide excellent ROI. An audio ad during a phone call is the most intimate of messages because the callers are highly engaged and listening. Second, the ability deliver ad to a mobile caller is the type of actionable, targeted ad that can’t be delivered on any other digital platform.
ADOTAS: What innovations to mobile advertising can be expected? What is Apptera looking to improve in the contextual mobile advertising space?
RANDY HALDEMAN: Right now, we’re delivering ads that trigger off a request or geography. In the case of a request, a caller for a specific movie show-time may get served an ad for a forthcoming movie in the same genre. She can choose to receive a text reminder just before that forthcoming movie is released. In the case of geography, someone who calls for tickets to a G-rated movie could be served an ad from a nearby restaurant offering free dessert for the kids after the show. There are 120 million people represented by the movie showtime services we manage, and half of them buy a meal before or after attending the theater. That’s 60 million hungry people looking for a place to eat tonight – a prime target for restaurant chains. In addition, this service could also be used to distribute promotion codes to the mobile phones of the movie-going audience, so that the companies placing products in movies can extend their brands beyond the theaters and into the hands of this desirable ‘trend-spreader’ demographic.
Longer term, you can imagine a world in which in-call advertising will trigger off behaviors across a network of publishers, not just movie show-time services. But that’s down the road a bit. For now, we’re hyper-focused on delivering relevant ads based on a single behavior and geography.