Back in 2012, the launch of Weve was heralded as a new dawn in the digital age with the UK’s three major mobile operators joining forces to deliver targeted advertising to their customers. As network operators tried to fight back against the tide of ‘over the top’ services impacting their margins, a Joint Venture approach was key to defending their home turf but also to driving incremental revenue streams.
Between O2, EE and Vodafone held 80% of the UK market and opened up an audience of c. 20m mobile subscribers and the original ambition was to launch both wallet services and targeted advertising. However, some three years after launch both Vodafone and EE stepped away from the JV and just last week, O2 announced Weve was to step away from the mobile advertising space.
So what went wrong?
Firstly, Weve was launched at the height of the SMS boom. Unlimited text bundles had been at the heart of O2’s success in pay as you go and also at the forefront of the animal tariffs which heralded the revival of Orange’s pay monthly business. We simply couldn’t get enough of the humble text message and UK SMS and MMS volumes peaked at over 171 billion messages in 2012. The rise of iMessage, Whatsapp, Facebook messenger and the dominance of social networking in general meant last year that volume had fallen to just over 77 billion – a 55% decline. Whilst the mobile operators had long talked about ways to deliver Rich Communication Services, the landscape was changing rapidly around them and in an environment where interactions increasingly moved from text, to photo and then to video, SMS began to feel the pinch.
Secondly this rise in alternative ways to communicate transformed the mobile advertising landscape. In 2012, mobile accounted for just 14% of Facebook advertising revenues and they were struggling to make the transition to a mobile first business model. Fast forward to 2018 and mobile now accounts for over 90% of the Silicon Valley giant’s revenue streams. In addition, a series of acquisitions further strengthened their position in mobile, paying $1bn for Instagram in 2012 and then a further $19bn for WhatsApp in 2014.
If Facebook flexing their muscles wasn’t enough, Google had latched on to the power of location in driving their search business. Hitwise revealed in 2017 that over 60% searches took place on mobile devices with some use cases nudging on 90% (eg places to eat). In parallel both Android and iOS continued to evolve their proposition. The world of mobile payments is almost unrecognisable now from when Weve launched, for example, with Worldpay revealing a 328% year on year increase in NFC transactions from smartphones in March this year. In this environment, Weve became a small fish in a sea full of sharks.
Finally, the concept of serving ‘push’ advertising on mobile was always fraught with complexities from a consumer perspective. Even before the Cambridge Analytica scandal this year, the mobile has always felt like a more personal domain in which to serve advertising and many consumers began to look for ways to keep their most personal of devices sacrosanct.
IAB’s research in 2017 showed that 22% of UK adults had begun to use mobile ad blockers, for example, and , whilst this trend has stabilised, it shows that for many ads on mobile were simply becoming an unnecessary intrusion. Even if an ad blocker was a step too far for many, there remained question marks over consumers’ engagement with marketing served on mobile. Kantar’s Ad Reaction survey in 2017 showed that c. 1 in 4 of us are receptive to advertising on their mobile, approximately half of the amount for cinema and outdoor.
Mark Ritson has spoken passionately about his views that social is for many marketers a waste of time and that brands need to think about why they need to be on social. This consumer context is key – a well targeted and relevant piece of communication can be well received in any channel. Unfortunately, programmatic display seems to have become dominated by re-targeted campaigns – I’m sure I’m not the only one being followed round the web by a discount code for a product that I have already bought at full price (thanks, Honestbrew). However, there’s no question it’s here to stay (WARC stated that mobile expenditure exceeded TV in 2017 for the first time and has reached the heady heights of £5.22bn.
In some ways it’s sad to see Weve step away from mobile advertising. Along with O2 Priority and Orange Wednesdays it represented a genuine attempt by UK mobile operators to deliver innovative services. It looks as though the focus moving forward will be on offering data and insight services. There is undoubtedly an incredibly rich stream of data available here on consumers’ habits whilst on the move. However, the focus must be on presenting a joined-up view of how the consumer behaves in both the online and offline worlds rather than looking at mobile in isolation. Too often we focus on digital or mobile as if they are separate worlds whereas the reality is it’s now just the way we bank, shop, and interact.
Great campaigns will continue to recognise that mobile is not a unique silo but simply another way to reach consumers – integration not separation is the key.