The Real Ringtone Shakeup
About a month ago, we wrote about imminent changes in the ringtone landscape, ones that had the potential to materially impact a large percentage of those driving signups to ringtone providers. Changes can come from a variety of sources, and with respect to the ringtone market, you have no shortage of people and entities with a vested interest in how this type of subscription marketing occurs. One of the largest stakeholders sits outside the actual marketing of these services to consumers – the carriers. They own the customer, unlike the Internet where ISPs provide us with connectivity, but as users we do what we want to our computers, in the cellphone world, the carrier is both the ISP and computer. If you do something to your cell phone you don’t call Motorola but the carrier. As a result, they have both a vested interest and strong say in what happens to their user. Another major player also sits outside the funnel – the government. Very few other products have the breadth of appeal, the ease of conversion, the high monetary value to the marketer, and for better or worse the potential for confusion. The government doesn’t care if an offer appeals to a large number of people or makes marketers a lot of money, but they do care if those two come at the expense – literally and figuratively – of the user. We have seen the government play a role in incentive promotion and on the state level making waves in the mobile marketing space with the Florida Attorney General getting his Elliot Spitzer on.
In addition to the carriers and the government, who else has a large stake and might seem like an obvious candidate to institute change? Users? Affiliate networks? Industry trade groups like the Mobile Marketing Association? How about the mobile marketing companies themselves? All of the above. In regards to the imminent changes referenced earlier, those behind the money drove the desire for change, i.e. the off-deck mobile marketers (off-deck because these companies do not rely or use the phone to connect content to the consumer). In September, the largest subscription service providers finalized an agreement that would help control the marketing of their services. One of the changes they wanted would have invalidated a marketing method that conservatively drives more than half their new signups, the carrier landing page. The carrier landing page caught on with the marketer but as evidenced by the new marketing guidelines didn’t endear itself similarly with the mobile subscription companies. Ultimately, the mobile marketers wanted more control over what the user sees and more brand exposure, all very understandable as at the end of the day, they must insure a happy user if they want to earn the money they have spent acquiring them. The downside to this document; the deadlines came and went with no perceptible change in the way the marketing to consumers occurred. Of anyone that seemed to initiate change quickly and broadly, you would think those writing the checks could, but it didn’t work out that way. Had they really pushed, they probably could have carried out the changes, but it very realistically could have come at the expense of their business, and given the incredible percentage of users that came from third-party marketing efforts, they simply couldn’t take that risk.
Of all the stakeholder mentioned from within the sales funnel influences like the mobile marketers to affiliate networks, we didn’t mention one other player. We didn’t mention them because at first glance, they do not have the same level of interest. They facilitate the business, but do not actively participate. These are the traffic sources – long tail mix of web, search, and email inventory. We didn’t mention them earlier because historically they do not create policy. Actually, let’s modify that statement slightly. Every traffic source has some policy; they have some guidelines that dictate what an advertiser can promote to their audience. Usually, these take the form of acceptable ads and products such as no adult on this network, no anti-adware offers on that network. If one company didn’t allow a certain type of ad, it wasn’t the end of the universe. A large number of traffic sources existed. That is until Google became Google. Just ask those in the online gambling space. Before the US Government made it legal hazard to those who promoted online gambling companies in the United States, Google decided to follow Yahoo’s lead and no longer allow them. Go to their AdWords Help Center under Text Ads Content, you see this regarding Gambling, "Don’t promote online gambling or related sites. Advertising is not permitted for the promotion of online casinos and gambling activities." They use similar language for a variety of other ads from Academic Aids to Miracle Cures, and the "is restricted" verbiage for things they allow but only certain aspect, such as adult where you can promote adult but nothing related to children or teens. Go to this list now, and you see one named Mobile Subscription Services.
Usually when Google makes a major change they do so through their AdWords Blog. When the company announced the launch of Quality Score and subsequent updates to it, they did so through posts on the blog. Mobile Subscription Services on the other hand just appeared, and unless you had an account representative with Google or had close contact to a company marketing mobile subscription services that did have one, you would have had, at best, no warning, to at worst found potentially all your traffic stopped. Google hasn’t banned Mobile Marketing Services, but they have decided to step in and fundamentally change how advertisers can market them to their users, and they can. Search around, and you will see plenty that do not comply with the rules, but with enough people impacted, especially ones with account representatives at Google, you can be sure that Google just found itself a highly motivated, outsourced compliance team. The specifics of what they require, .e.g., certain language present, a check box on phone entry, definitely matter because they seriously impact the economics of getting a new users. The bigger story though is that these changes came about by Google and not one of the other oversight bodies. It’s their user and their right, but they have now created dual standards and put everyone else in a tough spot. If other bodies do not adopt their policy, we have multiple guidelines in place. It’s not as simple as you can run it here but not here. If they do adopt then you set the precedent for Google dictating broader policy, and that becomes an even slipperier slope to follow.
So why did Google do it?
It could be anything from don’t be evil, the user experience, to the CEO’s daughter signed up for one after clicking on an ad. If you saw the recent Neilsen ratings, though, another answer comes to mind – power. Not necessarily ringtones, but Mobile Subscription Services represented the largest single category for impressions, and that is a threat. More than anything, it looks bad, and with them appearance are everything.
