Is mobile advertising the next big thing

Despite the hype, a local idea - Eyeballs - could end up cracking it and becoming a world leader in cellphone advertising…

It's not often that an inventor of a product cries at its public launch. Nathan Levin, founder and inventor of Eyeballs cried at the product's flashy launch at Sandton Isle's Aston Martin dealership last week. He says he cried the night before in Cape Town too. Levin had a reason to cry. For as long as he can remember, he's been trying to crack "it". He's an inventor in the old-mould. His work started around a decade ago with an idea based on displaying ads while people dialled-up to the internet. After years of research, reworking, brainstorms and tireless effort, Levin seemed to have actually cracked it. It took a few more months of all-nighters, seven-day weeks and some chance encounters with people like Larry Katz (now MD of the company) to actually bring Eyeballs to market.

Cape Town-based Eyeballs has the potential to become the next big thing; the standard in mobile advertising. With the cards it's dealt itself, the product is well on its way. But, it's going to need one or two aces to blow away the market and capture the amount of users it wants.

The Eyeballs premise is strikingly simple. There are no banner ads. No pre-recorded adverts to listen to before you call. These (and more tactics) have been tried. Some work (kind of). Some don't. But, up till now, there hasn't been a blow out hit: a new standard for mobile advertising.

Eyeballs calls itself the first unobtrusive form of mobile advertising, its biggest selling point. You register via the internet (www.eyeballs.mobi) or by SMSing a shortcode to get the link for the application. You'll need to fill in some demographic details, and there won't be any privacy concerns, seeing as it's completely opt-in (permission-based). Once you've installed the app, it runs in the background on your phone, intelligently displaying ads while you're using your handset to make calls and send messages. Eyeballs currently works on about 40 different Nokia models, and there are plans to offer the platform on the iPhone and Blackberry in the near future.

Legendary marketing man Andre Beyers, who is chairman of Eyeballs, explains that there are four "opportunities" for a consumer to see an advert while you're using your phone. These ads appear in the deadspace surrounding actions/notifications. In other words, when your phone rings and you're notified of an incoming call, you'll see an ad above the alert; similarly when making an outgoing call, receiving or sending an SMS.

After demo-ing the service with Beyers a few weeks ago, one realises just how unobtrusive it is. It's almost subliminal, and this is Eyeballs's biggest selling point.

The big question, though, Beyers asks almost rhetorically is: "why would people do this?" There has to be an incentive. Eyeballs has devised a system called "payback advertising" where users are paid every time they see an ad. This is nothing new, but it's the first time this has been applied to the mobile market. 

To be sure, the money earned is not a huge amount per advert, but if one thinks how often you interact with your phone daily (making calls, receiving SMSes, etc), the small amount you "earn" each time has the potential to add up quickly.

Eyeballs has made some smart moves so far, linking up their rewards programme to both MXit Moola and all four network's prepaid airtime systems, hiring only the best ad agencies to launch this product to the mass market, and they've convinced a good number of blue-chip advertisers to get on board at launch (the likes of FNB (JSE:FSR), Woolworths (JSE:WHL), Nokia, MNET, Toyota, Levis, United International Pictures and Santam (JSE:SNT)).

With advertisers like these, it's no secret who the target market is... Beyers describes the 17-25 year old segment as the "most important". These are the people with big social groups, and Beyers expects them to influence younger South Africans, and then for these two groups in turn to persuade the older generation. As the network of users grows, so too will the tools and profiling available to advertisers. Campaigns could be programmed, for example, to target female users in Gauteng between the ages of 22 and 24 who don't own a car. It's no wonder the ad industry is sold on this idea. You don't have to "start" or log in to an application to see an ad.

Will it work? Beyers has seen and done it all, and is far too smart to join a dead duck. AltX listed Huge Group (JSE:HUG) has also bought into the product, netting a 25% stake in the company earlier this year.

CEO of Huge Group, Anton Potgieter has been very excited about Eyeballs since he heard about the concept. Potgieter believes this is a "one in a million" idea, with immense potential. Huge has been instrumental in bringing the launch forward and has helped to refine the product. "Pure is as close to the word I can get," says Potgieter. Beyers says, the most important thing Huge brought to Eyeballs was technical expertise. It's a no-brainer: it knows how the telecoms industry works: it knows mobile, it knows networks.

In separate interviews, Potgieter and Beyers both point to how Eyeballs is "primed" for international expansion. One can see Beyers has far bigger ambitions than just being a platform with a few million users in SA. Getting an operation going in another country will take "days".

A few years ago, a friend who's an early-adopter showed me MXit. The concept was also shockingly simple: use a data connection to enable instant messaging on a cellphone. It's one of those services you either "get" or not. Most analysts and like-minded people in the industry didn't back then. But the mass market did. Years later the media and business world caught on, and MXit was "the next big thing".

Will Eyeballs be able to gain mass appeal, millions of users and be an effective medium for advertisers?

It seems to have the deep pockets needed to promote this product until people use it.

And if it gets dealt just one or two more lucky aces, this will be a blow away hit.

Or else you can be pretty sure it'll just keep on placing its bets until it strikes the jackpot.

By: Hilton Tarrant

* Hilton Tarrant contributes fortnightly to "Broadband" a weekly column on Moneyweb covering the ICT sector in South Africa. If Eyeballs took the plunge and developed on a notoriously complicated Java platform, he'd actually be able to install it on the Sony Ericsson he uses all day. But, he may just go buy a Nokia handset to see if he's sold on this idea.