Online Media Daily: Mobile Advertising Q&A

by Kevin Nakao

WhitePages is one of the largest people directories on the Web. With the Seattle-based company in the midst of expanding both its online and mobile offerings, we interviewed Kevin Nakao, its vice president of mobile, about WhitePages’ mobile initiatives and the challenges of adapting its service for cell phones. Before joining WhitePages, he was vice president of music services for RealNetworks, where he launched Rhapsody Mobile and worked on music and video programs with Cingular, Verizon, and Sprint.

OMD: Can you give a brief overview of WhitePages’ mobile initiatives?

Nakao: Sure, our mobile initiatives focus on getting more users, doing new things, and making money.

On the distribution side, we have built an audience of over two million mobile users through a re-design of our mobile browse site and by launching new applications for the iPhone, BlackBerry, Android, and Text Message-based services.

We have also innovated with new services like Caller ID for Android, which quickly hit Top 25 in the Android market. So we decided to provide the ability to identify unknown calls and texts on any mobile phone, and launched a new service called LookUp. It’s the first service in the U.S. that allows consumers to identify unknown calls and text messages by texting that number to LookUp (566587).

On the monetization front, we have tested a number of approaches around advertising and paid models. For advertising, we have the benefit of a direct sales force of 15 people that has already been selling a top Web site and building relationships with key online media agencies. So we try to package mobile with online buys.

OMD: Can you give some idea of overall differences in campaign results for advertisers on Whitepages mobile v. the wired Web site — e.g., response rates?

Nakao: I have always wondered why the click-through rates on our ad campaigns for mobile have historically been higher on mobile than the Web. Our CTR on mobile averages about 1%.

One of the primary factors driving the difference is that there tend to be fewer ads on a mobile page versus a Web page. We recently implemented this approach in the re-brand of the site. For example, by reducing the number of ads on our home page from four to two, the click-through rate on the display ads has increased 25%.

OMD: Has Whitepages seen higher engagement via the mobile Web or mobile apps?

Nakao: We have been doing a lot of testing of ad campaigns to see if there are any differences in performance between advertising on our mobile Web site versus our iPhone application.

There have been slight differences, but the more important variable has been the placement of the ad (top or bottom) and testing ad copy that speaks to the mobile use case. We also learned that iPhone application users may be reluctant to leave their app via a click out unless the application can remember where the user last left off — a feature we added earlier this year.

From a consumer standpoint, we see significantly higher engagement with the iPhone application over the mobile Web site because it offers a lot more features and a downloaded app gets great device real estate and presence with the user. In the case of Caller ID for Android, it’s always on and is used daily by many users.

OMD: There’s been a lot of debate around whether publishers should offer a free or a paid app. You have both. Why?

Nakao: We offered both free ad-supported and paid applications, and now we understand the importance and metrics around leveraging both. A free, ad-supported version helps us reach the broadest possible base of consumers and provides distribution and marketing opportunities for paid services. A free version not only provides you with a base of users to up-sell to, but also provides feedback and testing to improve your service before you offer a paid version.

The combination of both advertising and paid revenues creates a stronger business case and overall ROI. The higher revenue per user enables higher customer acquisition budgets to help scale our business.

OMD: Can you discuss some of the difficulties you’ve faced in trying to offer Whitepages as a subscription service on mobile apps?

Nakao: In my opinion, all of the app marketplaces have fallen short in terms of offering robust billing and pricing solutions for both consumers and developers. As an example, none of the application markets offer a monthly recurring or subscription fee — they essentially provide vending machine models that only allow you to charge the consumer up front.

Even Apple’s in-app billing requires you to charge for the app on the outset, and in-application billing is not currently possible on a free version. This forces publishers to charge higher prices than they’d like or force the user to re-download the application. In spite of this, we’re happy with the paid conversion rates and some of the platforms are starting to build better billing options.

One of the other opportunities with mobile commerce is to make it easier for consumers to charge services to their phone bill. Our LookUp service gives consumers the choice between paying per use, subscribing to an unlimited plan, and then charging it to their phone bill. Apple, Google, and RIM do not currently provide these capabilities in their application market. The carrier pipes are a lot smarter than some folks give them credit for.

OMD: What makes a mobile campaign on WhitePages different from other kinds of mobile media buys?

Nakao: We know that people rely heavily on our mobile services to do things like find people, restaurants, call their hotel for concierge services, or get directions to an important business meeting. They are literally “on the go,” ready to make a transaction, and ready to act on relevant advertising.

We think the accuracy and immediacy of the information we serve up creates an environment for ads to have a big impact with a receptive, action-oriented consumer.