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Velti CEO: Mobile technology expansion, geographic diversification to drive focus

As CEO of the leading mobile advertising and marketing technology provider, Alex Moukas has insight into the growth prospects of mobile. From where he sits, Mr. Moukas sees nothing but upside for mobile adoption by brands and ad agencies.

In this wide-ranging Q&A starting with a dinner conversation, the San Francisco-based executive expounds on mobile advertising and marketing trends, issues over standards, metrics and Velti?s play in the fast-growing mobile ecosystem.

?The key area for us right now is making sure that our customers have a mobile strategy and they?re not just running a campaign on mobile because mobile?s hot,? Mr. Moukas said.  

?It?s about making sure that you have a mobile site that meets your business objectives and that you have a strategy that reflects your consumer demands on mobile, such as showrooming or commerce,? he said.

Founded 11 years ago, Velti is the leading mobile marketing technology platform provider listed on the NASDAQ stock exchange, with 2011 revenues of $189.2 million. Please read the edited excerpts for Mr. Moukas? take on mobile for the year ahead.
What defined mobile advertising in 2012?
2012 was a very exciting year for mobile advertising. 

If I had to choose one defining factor or moment, it would be Apple?s two bold launches: iPhone 5 and iPad mini, specifically the screen sizes for both.

We?re seeing a lot of variety in mobile smartphones and tablets, which is creating new opportunities for how advertisers can engage with the consumer on these devices.

Gone are the days where there was one standard ad or standard screen size in mobile advertising.

With Apple?s recent launches, the market is now more fragmented than ever.

Not only do developers need to design for a number of different screen sizes and devices, but more importantly, engagement rates by device and ad units are also changing, leading to a possible shift in leaders for the current market and a change in advertiser goals.

Did you notice any unusual activity in mobile advertising over the holiday season?
The holidays are always an interesting time of year, and their effect on the mobile market is increasing greatly. 

Mobile showrooming was a hot trend again this year.

As shoppers become more prone to researching, price checking and buying via mobile, advertisers and retailers are realizing the value of a well-planned and placed mobile campaign.

We expect retailers to employ tactics like geo-fencing, which allows brands to target their most opportune customers instantly.

What?s the No. 1 question that brands ask about mobile?
We get a lot of questions about outcomes.

A number of the campaigns that we?re currently working on are not straight CPM buys, but paid for result. This is likely residual from a lack of an effective way to buy or measure online campaigns.

With mobile, they?re being more diligent in defining KPIs and understanding what outcomes they can expect and are looking, in cases where it?s appropriate, for outcome-based campaigns.

Have ad agencies bought into the mobile message, or does work still need to be done?
I think it?s a little bit of both. 

When we?re talking about getting paid on outcomes for certain campaigns, that?s something that is new to the agency that gets paid a percentage of the media buy.

I do think agencies realize how effective mobile can be for targeting, especially marrying online with mobile and how the two can be complementary and achieve specific and, perhaps, independent objectives as part of the same campaign.

Lack of comparable metrics is a bugbear of many keen to include mobile in advertising and marketing plans. Is that a valid frustration?
I think there was a lot of movement in 2012 around outcomes and measurements and that these vary depending on the type of campaign ? is it a straight banner campaign or loyalty program and what is the consumer outcome that needs to happen such as download an app, come to a car dealership, et cetera? 

Mobile KPIs are much more diverse than online, but there?s still a lot of opportunity for marketers to use mobile to define goals upfront and measure the success at a campaign?s end, rather than the spray and pray that sometimes happens with other media. 

The advantage you have in mobile is that you can react to what you?re seeing works best with your consumers quickly.

For example, you can track the interaction you see from coupon redemption to know what each demographic prefers, is it 50 percent your next visit or is it a free item, like dessert. 

Utilizing data you acquire to make smarter decisions will get brands the desired outcomes they are looking for.

The mobile ecosystem is fraught with so many issues ? differing platforms, multiple devices, walled gardens, few common standards, low margins and lack of cookies. Will any of these issues disappear anytime soon?
I think this is a direct result of the industry moving and changing so quickly.

It?s hard to keep pace with the innovation in terms of standards and platforms, but the IAB and the MMA have been making a lot of progress, and we?re seeing this pay off in certain areas such as standardization of ad unit sizes.

The key area for us right now is making sure that our customers have a mobile strategy and they?re not just running a campaign on mobile because mobile?s hot. 

It?s about making sure that you have a mobile site that meets your business objectives and that you have a strategy that reflects your consumer demands on mobile, such as showrooming or commerce.

What is Velti?s focus for 2013?
I would categorize our focus in two areas: product and technology expansion and geographic diversification.

In terms of technology, we continue to devote significant resources to enhancing the capability, reach and effectiveness of our technology platform that spans across mobile advertising and marketing. 

In fact, no other single competitive offering can address the breadth of our offerings or reach and scalability of our platform to mobile users, combining mobile advertising with post-click mobile marketing and mobile customer lifecycle management.

Our customers see great value in having one provider that can address the full gamut of mobile services, rather than having to piece together multiple solutions to address their requirements.

We will continue to build-out our platform in 2013 with additional offerings that continue to differentiate our offerings in the marketplace.

In terms of geographic diversification, we are excited by our progress to expand and diversify into strategically important areas. 

We are seeing strong growth in the U.S. market believe that it is likely to be our largest regional market in 2013. 

Further, we are also seeing healthy growth in the U.K., particularly in areas such as real-time mobile and social interactions as well as mobile-to-TV interaction. 

Outside of the U.K, we also continue to perform extraordinarily well in Europe, demonstrating strong growth, even in a challenging micro-economic environment.

Asia is also an exciting market and we are putting in place an efficient operational structure and expect to expand our mobile marketing presence there in 2013. 

Has Velti?s job gotten easier over the years as more companies embrace mobile?
I would say that it?s easier now that people are embracing mobile, but the term ?mobile? is so broad that progress still needs to be made in helping people understand why they should develop a mobile strategy.

These are two very different things. In terms of solution providers, the industry has become more fragmented and there are a number of vendors doing different things, for example, DSPs, mobile site development, targeting, et cetera.

I think it can be hard for a CMO to understand how and where to start. 

For us, we?re offering the total mobile strategy so we compete with a number of point solutions.

Helping them understand that we?re not purely a sell-side platform or a mobile Web site developer, is where the education comes in and helps prospect companies better understand and embrace mobile.

What do you think will happen once smartphones in U.S. subscriber hands crosses the 50 percent threshold, as is expected by year?s end?
There?s something to be said for being the early adopter in this case.

If you haven?t developed your mobile strategy by this point, you?re already missing out on huge opportunity to reach people who are on mobile.

By end of year, you run the risk of losing a key opportunity to find out how you can successfully integrate mobile into your strategy, before it crosses that threshold.

Though, I think once we cross that threshold, there will be a rush of companies wanting to incorporate mobile in their marketing budgets, and we could see a huge spike in mobile initiatives and innovation across the U.S. that will shape the industry.

What disruptive power does mobile have that marketers need to get a handle on real soon?
The true power behind mobile is that marketers can literally be in the palm of their customer?s hand, constantly.

It?s truly becoming the best way to engage with consumers. And as devices continue to evolve, the opportunities for rich media content are endless.

If you?re not reaching your audience via mobile, your competitors likely are, and those customers may not be yours much longer.