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Mobile advertising not seen as experimental anymore: Millennial Media CEO

What does the boss of the one of the leading mobile ad networks have to say about mobile advertising and its prospects this year?

Paul Palmieri, president/CEO of Millennial Media, is chipper about the future of mobile advertising, its place in the multichannel marketing mix and the fact that many advertisers don't consider mobile as experimental any more. His Baltimore, MD-based firm expects more business from existing clients -- Subway, Paramount Pictures and Electronics Arts, to name a few -- as well as prospects.

"Our clients are using mobile advertising to increase awareness, in-store traffic, lead-to-sales conversions and brand engagement," Mr. Palmieri said in this Q&A. Excerpts:

How optimistic are you about 2009?
Very. We at Millennial Media have experienced incredible growth over the last six months, with a busy pipeline and mobile ad campaigns on the rise.

In order to succeed in any advertising market, regardless of financial conditions, a business needs to be able to deliver the best, most relevant value against the media spend.

We look forward to continuing steady, strategic growth in 2009, and we will take advantage of the fact that brands are looking to cut costs and focus their dollars on engaging the most relevant audiences with the broadest reach possible.

Mobile is a more efficient spend than the wired Internet.

In order to have this more efficient spend, advertisers invest in mobile for much higher click-through rates, better cost per action and lower absolute cost per reach. It is a better business model than Internet spending, at a smaller scale, for now.

We saw that scale increased in a big way in 2008. We will continue to see advertisers concentrate their spend with mobile ad players which have scale, and which can deliver this larger opportunity with accountability and efficiency, as they trim and reallocate resources from traditional media.

Look, mobile is not seen as an experiment anymore. Operators, publishers and brands have invested a lot in this market and are seeing results. These companies are changing the game in advertising, and it only gets better when brands need to stretch their dollars.

So mobile is not going away. Instead, it will be positioned as even more of a critical value proposition to advertisers given their need to streamline costs in 2009.

You're talking to your peers in the industry. How are they reacting to the slowdown?
It depends on whom you speak with.

Companies â?¦ which have been focused and which provide brands the scale they want and need with the technology and media necessary to engage their users continue to win business -- and in some cases, are demonstrating even more value in an economic downturn -- will succeed.

Others who have jumped on the bandwagon by focusing only on iPhone applications, for example, or those caught up in a spending spree, are hurting a bit right now.

2008 delivered agencies and brands a bit of a consolidation of scale in that we are now one of only a few scale players in the mobile ad network space.

Brands still need to engage audiences, and they need to do it more economically. More and more, they are looking to mobile to get them there.

What are your clients saying about their plans to incorporate mobile advertising and marketing into the overall media mix?
Millennial Media's clients continue to be excited about incorporating mobile into the marketing mix because they enjoy much higher click-through rates, better cost per action, and lower absolute cost per engaged consumer.

These clients, such as Stella McCartney, Electronic Arts, Subway, Paramount Pictures and other large brands, are moving the mobile medium beyond experimentation and into the mainstream.

Our clients are using mobile advertising to increase awareness, in-store traffic, lead-to-sales conversions and brand engagement.

Where do you want to take Millennial Media this year?
We will continue to work hard to grow our business, both domestically and internationally, by focusing on helping brands and their agencies leverage mobile to reach and engage critical audiences.

We will continue to add premium publishers to our fast-growing mobile ad networks, and provide the scale brands need to select mobile as a core advertising medium based on its performance and unique ability to engage the audiences they care about most.

Our audience scale will continue to position us for a healthy 2009, to meet industry challenges, and deliver value to the growth of the overall mobile ad market.

Do you expect your clients will spend more on mobile?
Our clients already know their mobile campaigns deliver click-through-rate levels five times higher than those of their wired Internet campaigns.

They have experienced the value of mobile's unique ability to engage and inspire audiences to buy products, and participate with and connect to brands in unique ways.

We expect to tell more success stories in 2009 and recruit more brands to engage in mobile ad campaigns, and we expect that their spend on mobile as a percentage of the mix will increase.

What do your clients expect out of mobile?
Easy: They expect something positively different than what they are currently getting from more traditional marketing channels.

In this economy, what advertisers need most is media that meets objectives and performs well against expectations, and mobile has proven to be exactly that for many advertisers.

If advertisers cut back on spending in other mediums, they look to mobile for its inherent accountability for measurement and its efficiency.

Forecasts are reporting cuts in traditional media and increases in interactive spending, so mobile spending will increase even more.

The bottom line is that clients expect results, and mobile delivers on that promise.

How will you prospect for new business in 2009?
The same way we always have -- by engaging the agency and brand community with our sales force, which is absolutely committed to delivering the best service; delivering media innovation to buyers with new tools, creative formats and audience product; telling our client success stories and highlighting results; and continuing to partner closely with agencies to educate advertisers about the power of mobile.

Are events and trade shows part of your outreach efforts next year?
Millennial Media supports the big shows, such as ad:tech, IAB Mixx, iMedia Summits, CES, Informa events, Mobile World Congress and CTIA.

We are big believers in helping shape industry standards with leading organizations such as the Mobile Marketing Association, Interactive Advertising Bureau, the dotMobi Advisory Group and CTIA: The Wireless Association.

What cost-cutting measures have you taken to keep your company competitive?
We have been spending conservatively since our inception, and will continue to do so.

We have invested in an amazing management team by bringing a â?¦ combination of mobile expertise and interactive ad network experience to make Millennial Media a unique premium partner for brands, publishers and operators.

Our people are our greatest asset, and our publishers provide the broadest reach to our brand clients.

That said, in 2009, we will look to deliver advertiser demand to publishers who are not only cream of the crop in name, performance and audience, but also give us the best picture for profitability as well.

We will continue to remain extremely competitive because of this expertise, scale and profitability -- the three most important differentiations for 2009 and beyond.

Are you adding any new technology to give you an edge over the competition?
Absolutely. We already enjoy a tremendous advantage in our ability to uniquely identify most users we see in our networks -- i.e., anonymous identification -- which enables us to provide frequency capping, reach and frequency analysis, serial message delivery and retargeting.

We'll continue to build on these and other fundamental technical advantages to provide advanced consumer segmentation and targeting solutions throughout the year.

Also planned are additions to our mobile media planning tool and additional rich-media ad units for iPhone and all major smartphones.

Being an ad network is one of your offerings, but Millennial Media also offers custom mobile services, such as creating a mobile presence for brands. Is that going to be an area of focus, offering these bundled services?
You're right. Millennial Media is not just about mobile ad networks.

We're about helping brands and publishers monetize mobile, reaching their audiences and engaging them in ways never before experienced, and creating immediate, highly persuasive calls to action.

We guide and counsel agencies, and the brands they represent, about where and what kind of ads to place, optimize messages and creative for specific geographies, demographics, categories of publishers, operators and handsets.

We consult with them, provide strategy and creative direction, and offer campaign analysis. But most of all, we provide the scale they need to reach their audiences on mobile.

Most recently, for world-renowned fashion designer Stella McCartney, we launched a mobile ad campaign targeting holiday shoppers (see story).

In the preparation of the campaign, we worked hand-in-hand with Stella McCartney and Gucci Group executives on the strategy, direction of the creative, design of the mobile Web banners and Web site, and many other aspects beyond the campaign's running on our mobile ad network.

The result was a great campaign which is still running, and has already garnered extensive attention and interest.

Mobile ad networks depend on quality inventory from content owners and publishers. But media is going through its toughest phase. Will that affect mobile advertising?
This is a great time for publishers to enter mobile.

With the right strategy and guidance, publishers should be using the mobile channel for immediate new revenue opportunities, like they did with the wired Internet.

In 2008, the industry added over $100 million in new mobile ad display inventory. Millennial Media estimates a double-digit increase in inventory in 2009.

One important consideration to keep in mind is that not all ad inventory carries the same value. Some is of little value, and some is of high value.

In the case of Millennial Media, the company's core expertise lies in its ability to segment and optimize its inventory based on technology across our broad and diverse networks.

This methodology determines the best choices possible for an advertiser given specific pieces of available inventory. This is the area where the experience of operating an ad network pays off.

Ad agencies have gone through major rounds of layoffs in the past few weeks. Are you worried that they may be getting rid of people with knowledge of mobile marketing?
Downsizing has affected businesses in all sectors and people at all levels.

If a mobile marketing expert leaves an agency or brand, Millennial Media serves as that mobile expert and partner.

To some extent, we have to just take things as they come, and provide excellent service during these transition phases.

What case can you make for mobile advertising to advertisers skittish about spending money on marketing in a weak economy?
The first thing is that mobile is the unlikely combination of the hot new thing and a really efficient way to engage users.

In fact, our clients know that mobile advertising is one of the most efficient marketing tactics in a company's arsenal, and it is certainly more effective than online.

Millennial Media, as well as other mobile ad networks, can point to countless metrics and research which unequivocally prove this.

In addition, advertisers need to engage users where they are spending more and more of their time, and that is on mobile.

It is readily apparent to any marketing professional that times are changing and, therefore, marketing programs need to be more strategic and creative to reach desired audiences. Mobile can certainly help many companies achieve those objectives.

What not to do this year if you're an advertiser doing mobile advertising and marketing?
I'd say stop testing and start integrating mobile into the core branding campaign. It's a more efficient spend and an even better performer when integrated into the overall advertising campaigns.

What do you do when you're not working?
I generally like to spend as much time as possible with my family. So, whatever we are doing, we have a great deal of fun.

I guess if I had to say something more concrete, I am really into music, and try to attend live music events as often as I can.

I am partial to '80s heavy metal bands, and I have been known to hop on a plane to go see certain bands perform.