Commercialisation of Context-Sensitive Mobile Attention in Mobile Media Markets

Andreas Albers

Commercialisation of

Context-Sensitive Mobile Attention in Mobile Media Markets

Market Engineering Recommendations

for Mobile Marketing Providers

Verlag Dr. Kova�

Hamburg 2010

S c h r i f t e n z u m M o b i l e C o m m e r c e

u n d z u r M o b i l k o m m u n i k a t i o n

Herausgegeben von

Prof. Dr. Kai Rannenberg

Johann Wolfgang Goethe-Universität Frankfurt a. M.

Band 3

ISSN 1863-2831

Verlag Dr. Kova�

VERLAG DR. KOVA� e. K. F A C H V E R L A G F Ü R W I S S E N S C H A F T L I C H E L I T E R A T U R

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ISSN: 1863-2831

ISBN: 978-3-8300-5347-7 Zugl.: Dissertation, Universität Frankfurt (Main), 2010 © VERLAG DR. KOVA� in Hamburg 2010 Printed in Germany Alle Rechte vorbehalten. Nachdruck, fotomechanische Wiedergabe, Aufnahme in Online-Dienste und Internet sowie Vervielfältigung auf Datenträgern wie CD-ROM etc. nur nach schriftlicher Zustimmung des Verlages. Gedruckt auf holz-, chlor- und säurefreiem, alterungsbeständigem Papier. Archivbeständig nach ANSI 3948 und ISO 9706.

Foreword V

Foreword The mobile communications industry as well as the telecommunications indus-try in general is in the process of radical transition. Voice communication and SMS messages are becoming commodities in more and more saturated markets. At the same time, all forms of telecommunications, including voice telephony, are mapped to data and the related Internet services, e.g. Voice-over-IP. In con-sequence traditional sources of revenue and profit, especially voice telephony services, are drying out, partly due to harder competition between traditional providers, partly due to competition from new Internet-based providers, such as Skype.

Data services, which for a while were seen as new sources of revenue and profit are confronted with customers being very reluctant to pay, especially as so many free services are available over the Internet. Therefore examining business mod-els with customers not paying directly (i.e. advertisers are “stepping in”) is be-coming more and more important also in mobile communications. In this regard, Internet marketing actors are increasingly interested to better understand the situation (the “context”) in which an advertising message is reaching the recipi-ent. Context information is necessary to tailor the messages and the way they are transmitted to the respective addressee – in this age of information overload a necessary prerequisite for an advertising message to be perceived at all.

This situation is actually a problem, that the media industry has faced for a long time, and at this point, the interests of advertisers in old and new media meet what mobile communications providers know and can – to some degree – offer: Very precise information (gained from the cell based mobile communication infrastructure) on where customers are, what needs they may have and a trust relation in terms of managing these data (from often longstanding customer rela-tionships). From these data advertisers can derive the much sought-after infor-mation about the situation (“context”) of a communicating or receiving cus-tomer.

Andreas Albers has well identified the increasing importance of context infor-mation, made it the objective of his research, analysed its influence on the com-mercialisation of mobile media, and consequently used this knowledge for de-sign, construction, and implementation. Doing so he was able to tailor his sub-ject in a way that promises results of long-standing importance – despite the

VI Foreword

very complex and volatile situation in both mobile communications and mobile media.

First Andreas Albers identifies and analyses the influence of contextual informa-tion, e.g. on “traditional” mobile advertising by Mobile Marketing Providers. This analysis supports the understanding of identity and profile information not only in the domain of mobile marketing, but also in general. Then Andreas Albers uses his findings as basis for his MoMeMa engineering recommendation framework for constructing mobile media markets in which context-sensitive, mobile attention can be traded. It is noteworthy that Andreas Albers has man-aged to replace the economic good of mobile advertising media performance by that of mobile attention, which for the first time made it possible to analyse the impact of context information.

A further important Design Science contribution in the area of Business Infor-matics is CoMPaS (Context-sensitive Mobile Portal Service), Andreas Albers’ prototypical proof-of-concept implementation of MoMeMa. CoMPaS also pro-vides a basis for future behavioural research on context-sensitive mobile atten-tion of mobile users in the domain of mobile marketing. An expert survey for the empirical evaluation of the recommendation framework brings the excellent design science contributions full circle.

Andreas Albers has written a first class thesis in Business Informatics, which is already influencing neighbouring disciplines, e.g. marketing.

I am more than happy to wish this to book all the best, especially many inter-ested readers.

Prof. Dr. Kai Rannenberg

Preface VII

Preface In a society of growing information overflow, it becomes increasingly difficult for enterprises to attract the attention of consumers for marketing campaigns promoting their products and services. In this regard, mobile media offers adver-tisers a highly personal communication channel to their recipients. Thereby, context information provided by the mobile network allows advertisers to target their Mobile Marketing campaigns towards the momentary usage situation of mobile users.

In this media market, the objective of Mobile Marketing Providers is to com-mercialise the provision of such a mobile communication channel to advertisers via their Mobile Media Market platform. However, the specific characteristics of context information generate impacts on a Mobile Marketing Provider’s tradi-tional business model. In order to address these impacts, this work develops and applies a conceptional analysis framework for the use of context information in the Mobile Marketing domain. Subsequently and based on the knowledge ac-quired from the analysis, an engineering recommendation framework for Mobile Media Market platforms (MoMeMa) is developed and presented. Its guidelines enable Mobile Marketing Providers to develop or align their Mobile Media Market platforms in order to unleash the benefits of context information for Mo-bile Marketing campaigns while being able to cope with its identified impacts. Thereby, I hope my work is able to contribute to a better understanding of con-text-sensitive Mobile Marketing campaigns in academia as well as to their growth in the industry.

When I began this thesis at the faculty of business administration and economics at the Goethe University Frankfurt, the mobile Internet was in the pre-iPhone era. This was characterised by high mobile data communication costs, complex device usability, and low mobile network bandwidth. Nevertheless, the theoreti-cal potential of integrating context information into Mobile Marketing cam-paigns in order to provide benefit to mobile users as well as advertisers was tan-gible. However, actually contributing to this concept in the form of a doctoral thesis required a substantial academic and industry support.

The foundation for the conduction of this work was enabled by my participation in two research projects founded by the German Federal Ministry of Education and Research. The PREMIUM and its predecessor project PREMIUM Services

VIII Preface

provided the funding of this work and allowed a continuous review and im-provement of my ideas and contributions.

Without the support received from industry partners, it would have been very difficult to substantiate the utility of this work and its contribution to the prac-tice. Among the many partners, I would especially thank Deutsche Telekom, Nokia-Siemens Networks, T-Systems, Detecon International, Deloitte, Interac-tive Media, and AllesKlar AG for their expertise and inspiring comments on my contributions.

Special thanks go to my advisor Prof. Dr. Kai Rannenberg for always being open-minded to my ideas and for his continuous encouragement and support in order to successfully complete this thesis. In this regard, the Chair of Mobile Business & Multilateral Security was offering a multi-disciplinary research en-vironment that was complemented and supported by many industry partners, partner universities, and research organisations. This significantly fostered the outcome of this work. Moreover, I would also like to thank the other members of the board of examiners Prof. Dr. Roland Holten, Prof. Dr. Matthias Blonski, and Prof. Dr. Oliver Hinz for their instructive advice and comments.

I have very much appreciated the support and fruitful discussions of my col-leagues at the Chair of Mobile Business & Multilateral Security. I would like to thank André Deuker, Stefan Figge, Christian Kahl, Jan Muntermann, Mike Radmacher and Stefan Weiss for their stimulating comments and contributions to my work. In addition, I am grateful to Elvira Koch for her support in solving all issues beyond my actual research work, but necessary in order to complete this thesis. Further thanks go to Katrina Taylor, who has done a magnificent job proof-reading and significantly enhancing the readability of the manuscript.

Special thanks go to my wife and family for their continuous support and en-couragement during the time it took me to accomplish the outcome of this thesis.

Andreas Albers

Table of Contents IX

Table of Contents

Foreword ............................................................................................................. V�

Preface .............................................................................................................. VII�

Table of Contents............................................................................................... IX�

List of Figures .................................................................................................. XV�

List of Tables ................................................................................................... XIX�

List of Equations ............................................................................................. XXI�

List of Abbreviations ................................................................................... XXIII�

1� Introduction ................................................................................................... 1�

1.1� Mobile Marketing .................................................................................................... 3�1.2� Research Objectives and Questions ....................................................................... 5�1.3� Structure of the Thesis ............................................................................................ 6�1.4� Research Scope and Methodology ........................................................................ 10�

1.4.1� Research Scope .......................................................................................... 10�1.4.2� Design Science Research Framework ....................................................... 13�

2� State-of-the-Art Advertising-financed Media .......................................... 17�

2.1� Marketing and Media Markets ............................................................................ 18�2.1.1� Defining Marketing ................................................................................... 18�2.1.2� Concept of Media Markets ........................................................................ 21�

2.2� Traditional Media .................................................................................................. 22�2.3� Online Media .......................................................................................................... 24�

2.3.1� Distinctive Features of Online Media ........................................................ 25�2.3.2� Characteristics of Online Marketing ......................................................... 26�

2.4� Mobile Media ......................................................................................................... 31�2.4.1� Distinctive Features of Mobile Media ....................................................... 31�2.4.2� Characteristics of Mobile Marketing ......................................................... 36�

2.5� Unutilised Potential of Mobile Media for Mobile Marketing ............................ 41�2.5.1� Context Information provided by Mobile Media ...................................... 42�2.5.2� Integration of Context Information into Mobile Marketing

Campaigns ................................................................................................. 45�2.5.3� Special Features of Context Information for Mobile Marketing

Campaigns ................................................................................................. 48�2.6� Related Work on Integrating Context Information into Mobile

Marketing Campaigns ........................................................................................... 50�2.6.1� Design of Context-sensitive Mobile Marketing ........................................ 50�

X Table of Contents

2.6.2� User Acceptance of Context-sensitive Mobile Marketing Campaigns ..... 52�2.6.3� Mobile Marketing Providers enabling Context-sensitive Mobile

Marketing .................................................................................................. 53�2.7� Summary and Conclusion ..................................................................................... 54�

3� Conceptual Analysis Framework for Mobile Attention .......................... 57�

3.1� Attention as an Economic Good in Mobile Media Markets .............................. 57�3.1.1� The Attention Economy ............................................................................ 59�3.1.2� Tradability of Mobile Attention ................................................................ 61�3.1.3� Nature and Characteristics of Mobile Attention ........................................ 62�

3.2� Value Chain of Mobile Attention ......................................................................... 68�3.2.1� Procurement of Mobile Attention .............................................................. 70�3.2.2� Production of Mobile Attention as a Tradable Good ................................ 71�3.2.3� Sales and Distribution of Mobile Attention ............................................... 72�

3.3� Mobile Media Markets in the Economics of Networks ...................................... 75�3.3.1� Introduction to Two-Sided Markets .......................................................... 75�3.3.2� Two-sided Mobile Media Markets ............................................................ 78�

3.4� Summary ................................................................................................................ 80�

4� Impacts of Context Information on Mobile Attention ............................ 83�

4.1� Analysis Scope ........................................................................................................ 83�4.1.1� Mobile Medium ......................................................................................... 84�4.1.2� Traditional and Context-sensitive Mobile Attention ................................. 85�4.1.3� Mobile Marketing Campaigns ................................................................... 86�4.1.4� Players in Mobile Media Markets ............................................................. 88�4.1.5� Market Transactions for Context-sensitive Mobile Attention ................... 90�

4.2� Characteristics of Context-sensitive Mobile Attention as an Economic Good ........................................................................................................................ 92�4.2.1� Advertiser-related Dimensions .................................................................. 93�4.2.2� Mobile Marketing Provider-related Dimensions ....................................... 95�4.2.3� Delivery-related Dimensions ..................................................................... 96�4.2.4� Concluding Research Propositions ............................................................ 97�

4.3� Value Chain of Context-sensitive Mobile Attention ........................................... 97�4.3.1� Procurement of Context-sensitive Mobile Attention ................................. 98�4.3.2� Production of Context-sensitive Mobile Attention .................................. 102�4.3.3� Sale and Distribution of Context-sensitive Mobile Attention ................. 103�4.3.4� Concluding Research Propositions .......................................................... 108�

4.4� Two-sided Mobile Media Markets of Context-sensitive Mobile Attention .... 108�4.4.1� Indirect Network Externalities................................................................. 109�4.4.2� Common Pricing Structure ...................................................................... 109�4.4.3� Interaction Types ..................................................................................... 110�

Table of Contents XI

4.4.4� Development of new Two-sided Mobile Media Markets ........................ 110�4.4.5� Two-sided Market Type .......................................................................... 111�4.4.6� Concluding Research Propositions .......................................................... 111�

4.5� Limitations of the Analysis ................................................................................. 111�4.6� Summary and Conclusion ................................................................................... 112�

5� Reference Model for the Development of Mobile Media Markets ....... 115�

5.1� Introduction to Electronic Markets ................................................................... 115�5.2� Related Work on the Design of Electronic Markets ......................................... 117�5.3� Introduction to the Market Engineering Framework ...................................... 119�

5.3.1� Market Environment ................................................................................ 120�5.3.2� Transaction Object ................................................................................... 120�5.3.3� Transaction Service ................................................................................. 121�

5.4� Introduction of the Market Engineering Process Model ................................. 126�5.5� Adaption of the Market Engineering Framework for Mobile Media

Markets ................................................................................................................. 128�5.5.1� Market Environment of Mobile Media Markets...................................... 128�5.5.2� Mobile Attention as the Transaction Object ............................................ 129�5.5.3� Transaction Service for Mobile Media Markets ...................................... 130�

5.6� Summary .............................................................................................................. 132�

6� Engineering Recommendation Framework for Mobile Media Markets ...................................................................................................... 133�

6.1� Mobile Media Market Stakeholders .................................................................. 135�6.2� Mobile Media Market Environment Requirements ......................................... 138�

6.2.1� Social-Economic Environment ................................................................ 139�6.2.2� Technological Environment .................................................................... 140�6.2.3� Legal and Regulatory Environment ......................................................... 142�

6.3� Definition of Context-sensitive Mobile Attention as a Transaction Object.... 146�6.3.1� Acquisition of Context-sensitive Mobile Attention ................................ 147�6.3.2� Transaction Object Definition and Production ........................................ 151�6.3.3� Trading Rules .......................................................................................... 156�

6.4� Design of the Transaction Service for Mobile Media Markets ........................ 158�6.4.1� Business Model ....................................................................................... 158�6.4.2� Resource Allocation Mechanism ............................................................. 163�6.4.3� ICT-Infrastructure .................................................................................... 183�

6.5� Limitations of the Engineering Recommendation Framework ....................... 187�6.6� Summary .............................................................................................................. 188�

7� Prototypical Implementation of a Mobile Media Market Platform..... 193�

7.1� Application Scenario ........................................................................................... 194�

XII Table of Contents

7.2� Use Cases derived from the Application Scenario ............................................ 195�

7.2.1� Management of Mobile Portal Categories ............................................... 196�7.2.2� Management of Mobile Advertising Campaigns..................................... 197�7.2.3� Management of User Profile.................................................................... 197�7.2.4� Use of Mobile Portal ............................................................................... 198�

7.3� Application Process ............................................................................................. 199�7.4� Three-Tier Prototype Architecture .................................................................... 200�

7.4.1� Presentation Tier ...................................................................................... 201�7.4.2� Logic Tier ................................................................................................ 206�7.4.3� Data Tier .................................................................................................. 207�

7.5� ICT-Infrastructure Setup ................................................................................... 209�7.5.1� ICT-Infrastructure Elements .................................................................... 209�7.5.2� ICT-Infrastructure Software Technology ................................................ 211�7.5.3� Programming Language and Development Environment ....................... 213�

7.6� Limitations of the Prototype ............................................................................... 214�7.6.1� Conceptional and Functional Limitations................................................ 214�7.6.2� Performance and Security Limitations .................................................... 215�

7.7� Summary .............................................................................................................. 216�

8� Empirical Evaluation of Engineering Recommendation Framework 219�

8.1� Evaluation Objective and Methodology ............................................................ 219�8.1.1� Expert Interviews ..................................................................................... 220�8.1.2� Qualitative Content Analysis ................................................................... 221�8.1.3� Evaluation Process ................................................................................... 223�

8.2� Evaluation Research Question and Development of Hypotheses .................... 225�8.3� Interviewees and Data Acquisition ..................................................................... 226�8.4� Data Analysis and Discussion of Results ........................................................... 229�

8.4.1� Potential of Context-sensitive Mobile Marketing Campaigns ................ 229�8.4.2� Impacts of Context Information on Mobile Marketing Providers ........... 230�8.4.3� Engineering Recommendations Addressing the Impacts of Context

Information .............................................................................................. 231�8.4.4� Feasibility of Proposed Engineering Recommendations ......................... 233�

8.5� Evaluation Implications ...................................................................................... 235�8.6� Limitations of the Evaluation ............................................................................. 237�8.7� Summary and Conclusion ................................................................................... 238�

9� Conclusion and Further Research ........................................................... 239�

9.1� Summary of the Thesis ........................................................................................ 239�9.2� Research Contributions....................................................................................... 242�9.3� Practical Implications .......................................................................................... 243�9.4� Further Research ................................................................................................. 244�

Table of Contents XIII

References ........................................................................................................ 249�

Appendix A: Expert Interview Design .......................................................... 269�

Appendix B: Interviewed Organisations ....................................................... 273�

Appendix C: Expert Interview Introduction Slides ..................................... 275�

List of Figures XV

List of Figures Figure 1.1:� Structure of the Thesis .................................................................. 8�Figure 1.2:� Research Scopes of this Work .................................................... 11�Figure 2.1:� Policies in the Marketing Mix (based on McCarthy 1960) ........ 19�Figure 2.2:� Marketing Campaigns within the Scope of this Work ............... 21�Figure 2.3:� Triangular relationship of advertising media markets (based

on Zerdick et al. 2001, p. 50) ...................................................... 22�Figure 2.4:� Market and Media Information for Media Planning (Bogs

2001, p. 114) ............................................................................... 23�Figure 2.5:� Targeting and Performance Measurement of Traditional vs.

Online Marketing Campaigns (based on Skiera et al. 2001) ...... 27�Figure 2.6:� Reach vs. Quality of Targeted Online Marketing Campaigns

(Hegge 2008, p. 290) .................................................................. 29�Figure 2.7:� Advantages of Mobile Marketing (based on Dufft 2003, p.

12) ............................................................................................... 37�Figure 2.8:� Utilisation of the distinctive Mobile Media Features for

Mobile Marketing Campaigns .................................................... 42�Figure 2.9:� Primary and Secondary Context Dimensions applied to

describe the Usage Situation of Mobile Users ............................ 44�Figure 2.10:� Types of Mobile Marketing Campaigns based on Mobile

User Information ......................................................................... 47�Figure 2.11:� Targeting of Traditional Mobile Marketing Campaigns ............ 48�Figure 2.12:� Targeting of Context-sensitive Mobile Marketing

Campaigns ................................................................................... 49�Figure 3.1:� Model of Attention Process (Davenport and Beck 2001, p.

21) ............................................................................................... 59�Figure 3.2:� The Relation of Attention Data, Attention Profiles and

Targeting Profiles for Mobile Marketing Campaigns ................ 61�Figure 3.3:� Characteristics of Mobile Attention as an Economic Good in

Mobile Media Markets (based on Koppius 1999) ...................... 64�Figure 3.4:� Attention Value Chain of Mobile Marketing Providers ............. 69�Figure 3.5:� Data Quality Framework (Wang and Strong 1996) .................... 71�Figure 3.6:� Phases of Transactions managed and executed by

Intermediaries (based on Schmid and Lindemann 1998 and Rose 1998, p. 179 ff.) ................................................................. 73�

XVI List of Figures

Figure 3.7:� Two-sided Market Concept (based on Dewenter 2006) ............. 76�Figure 3.8:� Two-sided Mobile Media Market (based on Dewenter 2006) ... 79�Figure 4.1:� Data Communication Technologies and Terminal Devices

of the Mobile Medium ................................................................ 84�Figure 4.2:� Overview of Mobile Marketing Activities at Present

(Steimel et al. 2008, p. 79) .......................................................... 87�Figure 4.3:� Development of Mobile Advertising Revenues in Western

Europe (based on Strategy Analytics 2007) ............................... 88�Figure 4.4:� Mobile Marketing Value Chain and participating Market

Players (based on Steimel et al. 2008, p. 120) ............................ 89�Figure 4.5:� Players in Mobile Media Market ................................................ 90�Figure 4.6:� Mobile Media Market Platform enabling Mobile

Advertising Campaigns ............................................................... 91�Figure 4.7:� Context-sensitive Attention as an intangible Good in Mobile

Media Markets (based on Koppius 1999) ................................... 93�Figure 4.8:� Information Qualities of Mobile Attention ................................. 94�Figure 4.9:� Acquisition of Traditional vs. Context-sensitive Attention

Data ............................................................................................. 99�Figure 4.10:� Targeting of Traditional vs. Context-sensitive Mobile

Attention ................................................................................... 105�Figure 5.1:� Microeconomic System Framework (Smith 1982) .................. 116�Figure 5.2:� Reference Model for Electronic Markets (Lindemann and

Schmid 1998) ............................................................................ 118�Figure 5.3:� Electronic Market Engineering Framework (based on

Weinhardt et al. 2003) .............................................................. 119�Figure 5.4:� Revenue Model Framework (Skiera et al. 2005) ...................... 122�Figure 5.5:� Simplified Value Chain Model (based on Zerdick et al.

2001, p. 33) ............................................................................... 123�Figure 5.6:� Process and Rules of a Resource Allocation Mechanism

(based on Holtmann 2004, p. 133) ............................................ 124�Figure 5.7:� Three-Tier Architecture of an Electronic Market (based on

Holtmann 2004, p. 191 f.) ......................................................... 125�Figure 5.8:� Possible Interdependencies between Electronic Markets

Components .............................................................................. 126�

List of Figures XVII

Figure 5.9:� Market Engineering Process Model (based on Weinhardt et al. 2003) .................................................................................... 127�

Figure 5.10: � Mobile Media Market Environment ......................................... 129�Figure 5.11:� Mobile Attention as the Transaction Object in Mobile

Media Markets .......................................................................... 130�Figure 6.1:� Engineering Recommendation Framework as a foundation

for the Development of the MoMeMa Framework ................... 134�Figure 6.2:� Conflict of Interests in Mobile Media Markets for Context-

sensitive Attention .................................................................... 137�Figure 6.3:� Semantic Identity Concept and relevant Sub-Ontologies for

the Description of the Usage Situation of Mobile Users (Figge 2007, p. 87) .................................................................... 153�

Figure 6.4:� Model for Context-sensitive Mobile Attention Profiles ........... 154�Figure 6.5:� Compilation Process of Context-sensitive Attention Profiles .. 155�Figure 6.6:� Exemplified Development of Mobile User’s Attention Span

in relation to the Number of delivered Mobile Advertisements ......................................................................... 157�

Figure 6.7:� Revenue Model for Mobile Marketing Providers ..................... 160�Figure 6.8:� Architecture of Value Creation for Mobile Media Market

Platforms ................................................................................... 161�Figure 6.9:� Mobile Portal vs. Mobile Website ............................................ 162�Figure 6.10:� Mobile Media Market Component of the Mobile Media

Market Platform ........................................................................ 162�Figure 6.11:� Matching of an Attention Profile with a Mobile Marketing

Provider Targeting Profile ........................................................ 169�Figure 6.12:� Example illustrating the Virtual Bid Calculation by a

Mobile Marketing Provider ...................................................... 180�Figure 6.13:� Multi-attributive Auction Protocol for Context-sensitive

Mobile Attention ....................................................................... 181�Figure 6.14:� Mobile Media Market Platform in the Three-Tier-Model ........ 186�Figure 6.15:� Main Aspects of the MoMeMa Engineering

Recommendation Framework for Mobile Media Market Platforms ................................................................................... 189�

Figure 7.1:� Application Scenario supported by the Mobile Media Market Platform Prototype ....................................................... 194�

XVIII List of Figures

Figure 7.2:� Use Cases of the Mobile Media Market Platform .................... 196�Figure 7.3:� Mobile Portal Activity Diagram ............................................... 200�Figure 7.4:� Mobile Portal Component of the CoMPaS Prototype .............. 202�Figure 7.5:� Mobile User Profile and Privacy Setting Interface ................... 202�Figure 7.6:� Selected CoMPaS GUI Components for Advertisers ............... 203�Figure 7.7:� Selected CoMPaS GUI Components for the Mobile

Marketing Provider ................................................................... 205�Figure 7.8:� UML Class Diagram of the CoMPaS Prototype ...................... 207�Figure 7.9:� ER-Model of the CoMPaS Data Tier ........................................ 208�Figure 7.10:� Overview of the Elements of the Prototype System ................. 210�Figure 7.11:� ICT-Infrastructure Software Technology Overview for

Prototype ................................................................................... 212�Figure 8.1:� Evaluation Process based on Expert Interviews and

Qualitative Content Analysis .................................................... 224�Figure 8.2:� Knowledge Coverage of interviewed Organisations ................ 227�

List of Tables XIX

List of Tables Table 2.1:� Mobility dimensions and moving entities (Feldmann 2005,

p. 4) ............................................................................................. 32�Table 2.2:� Technical vs. Actual Reach of Mobile Media in Germany

(Steimel et al. 2008, p. 50) .......................................................... 40�Table 4.1:� Summary of developed Research Propositions on the

Impacts of Context Information on Mobile Attention .............. 113�Table 6.1:� Basic Design Aspects of Auctions (based on Skiera and

Spann 2004) .............................................................................. 164�Table 6.2:� Simplified Utility Scoring Scenario for Personal Attraction

(based on Krafft 2002, p. 79) .................................................... 171�Table 8.1:� Fictitious Example of a Summarising QCA ............................. 223�Table 8.2:� Organisations, which participated in the Expert Interviews ..... 226�

List of Equations XXI

List of Equations Equation 6.1:� Overall Utility Score for a Buyer .............................................. 167�Equation 6.2:� Winning Bid Determination of Buyer ...................................... 167�Equation 6.3:� Calculation of Personal Attraction ............................................ 171�Equation 6.4:� Calculation POS Distance based Pythagorean Theorem

(Wikipedia 2009) ...................................................................... 172�Equation 6.5:� Calculation of Geographic Reachability (based on Huff

1964) ......................................................................................... 173�Equation 6.6:� Calculation of Temporal Reachability ...................................... 175�Equation 6.7:� Calculation of Business Relevance for Mobile Attention ........ 176�Equation 6.8:� Calculation of Monetary Advertiser Auction Bid .................... 178�Equation 6.9:� Calculation of Virtual Bid by Mobile Marketing Provider ...... 179�

List of Abbreviations XXIII

List of Abbreviations API Application Programming Interface ASP Active Server Pages ATM Automatic Teller Machine B-MAD Bluetooth Mobile Advertising CET Central European Time CLP City Light Poster CoMPaS Context-sensitive Mobile Portal Application Service COO Cell of Origin CPM Cost-per-Mille CPU Central Processing Unit CRM Customer Relationship Management CS Computer Science DLL Dynamic Link Library DVD Digital Versatile Disc EC European Commission E-LBA European Location Based Advertising ER Entity Relationship EU European Union FIDIS Future of Identity in the Information Society GPS Global Positioning System GSM Global System of Mobile Communication GUI Graphical User Interface HTML Hypertext Markup Language HTTPS Hypertext Transfer Protocol Secure ICT Information and Communication Technology IDE Integrated Development Environment IdM Identity Management IdMS Identity Management System IIS Internet Information Service IMSI International Mobile Subscriber Identity IP Internet Protocol IR Infrared IrDA Infrared Data Association

XXIV List of Abbreviations

IS Information System(s) IT Information Technology IVR Interactive Voice Response LBS Location-based Service LTE Long Term Evolution MAC Media Access Control MAUT Multi-attributive Utility Theory MIdMS Mobile Identity Management System MMS Multimedia Messaging Service MoMeMa Mobile Media Market MSISDN Mobile Subscriber Integrated Services Digital Network

Number MVNO Mobile Virtual Network Operator PC Personal Computer PIN Personal Identification Number POS Point-of-Sales PREMIUM Preis- und Erlösmodelle für das Internet – Umsetzung und

Marktchancen PSMS Push Short Message Service QCA Qualitative Content Analysis SIC Semantic Identity Concept SIM Subscriber Identity Module SMB Server Message Block SMMART System for Mobile Marketing: Adaptive, Personalized and

Targeted SMS Short Message Service SOAP Simple Object Access Protocol SQL Structured Query Language SSO Single-Sign-On TCP Transmission Control Protocol TOA Time of Arrival TV Television UML Unified Modeling Language UMTS Universal Mobile Telecommunication System W3C World Wide Web Consortium

List of Abbreviations XXV

WAP Wireless Access Point WAP Wireless Application Protocol WiMAX Worldwide Interoperability of Microwave Access WTP Willingness-To-Pay

Introduction 1

1 Introduction “A wealth of information creates a poverty of attention”

Simon 1971, Designing Organisations for an Information-Rich World

The emergence and success of the Internet within the last decade had a tremen-dous impact on the market for advertising-financed media as a vehicle for mar-keting campaigns (European Interactive Advertising Association 2008a; Bachem 2008; Bundesverband Digitale Wirtschaft 2009). Although, traditional media (e.g. TV, radio, print, etc.) solely constitutes a uni-directional communi-cation channel for advertisers to their recipients, it still dominates the market. However, media consumers increasingly demand to choose their preferred con-tent on an individual basis – independent from time, place and especially me-dium (Kaspar 2006). Consequently, they are increasingly shifting their attention towards interactive online media (European Interactive Advertising Association 2008b).

In contrast to traditional media, the Internet as a bidirectional communication channel allows online users to personalise their consumed media content accord-ing to their individual needs. Thereby, the Internet enables advertisers to meas-ure and analyse the preferences of online users in real-time without media dis-ruptions. Combined with additional sociographic, psychographic and demo-graphic data, the resulting user profiles can be used to target Online Marketing campaigns towards the immediate needs of online users. Thus, there is a transi-tion in the advertising industry from the content-centric targeting of marketing campaigns towards user-profile-based approaches (Ehrlich 2008, p. 267 ff.). The effectiveness of the latter concept can directly be observed in the literally ex-ploding growth of the online advertising spending in Europe. As a result, today, online media markets are considered highly competitive and increasingly satu-rated. Consequently, Online Marketing Providers such Google or Yahoo as en-ablers of Online Marketing campaigns are seeking new revenue streams in their business domain (European Interactive Advertising Association 2008c).

With dropping prices for mobile data communications (Mohr 2009) and increas-ing usability of mobile devices (Steimel et al. 2008, p. 109), the mobile Internet is considered to be on the verge of the mass market and a prospective medium

2 Introduction

(Cisco Corporation 2009; TNS infratest 2009) for Online Marketing Providers to archive this goal. Although, the Mobile Marketing revenues are still quite low compared to traditional or online advertising-financed media, Mobile Advertis-ing as a subset of Mobile Marketing currently represents one of the strongest growing marketing means (Strategy Analytics 2007).

Analogue to the fixed Internet (and to traditional media as well), Mobile Mar-keting Providers act in the role of intermediaries enabling Mobile Marketing campaigns via their mobile media market platform. On the one hand, such a platform offers a mobile portal enabling a communication channel between mo-bile users and advertisers. On the other hand, it operates a mobile media market, on which mobile media performance (i.e. access to the communication channel to mobile users) is offered and traded. This mobile media market constitutes a two-sided media market (Evans 2005). On its content market side, the attention of mobile users is acquired by providing informative or entertaining content. On the advertisement market side, this attention is sold to advertisers in the form of mobile advertising space (Steimel et al. 2008, p. 120 ff.).

With regard to the provision of mobile media performance, one distinctive fea-ture of the mobile medium is the access to context information about mobile us-ers (e.g. location or identity). It is considered highly beneficial for the targeting of Mobile Marketing campaigns (Figge and Theysohn 2006). Although, context information is hardly offered by Mobile Marketing Providers in practice, there are several indicators that Mobile Marketing Providers will be compelled to do so in order to differentiate their offerings from competition (Figge and Albers 2008). However, due to specific characteristics (e.g. explicity of data about mo-bile users), context information is supposed to have several impacts on the tradi-tional commercialisation of mobile media performance via mobile media mar-kets (Albers 2007 and 2008; Figge and Albers 2008). Consequently, Mobile Marketing Providers willing to provide advertisers access to context information for Mobile Marketing campaigns have to be aware of these potential impacts. This knowledge allows Mobile Marketing Providers to consider and address these impacts in the design of their mobile media market platforms and thereby take advantage of context information for their business mission (Albers 2007 and 2008).

Introduction 3

The objective of this work is to explore and analyse the impacts of context in-formation on traditional commercialisation of mobile media performance for Mobile Marketing Providers, in their role as enablers of Mobile Marketing cam-paigns. Subsequently, this gained knowledge lays the foundation for the devel-opment of an engineering recommendation framework for mobile media market platforms. It is supposed to offer means to Mobile Marketing Providers to bene-fit from offering context information to advertisers for Mobile Marketing cam-paigns while being able to cope with its impacts or challenges respectively.

Section 1.1 briefly illustrates the past and recent developments in the Mobile Marketing domain as well as the need and difficulty of exploiting the benefits of context information, serving as research motivation. Then, Section 1.2 outlines the research objective and the derived research questions. The general structure of the work along with the major contributions of each chapter is presented in Section 1.3. Finally, section 1.4 outlines the research scope and the design sci-ence framework as methodological basis for the entire thesis.

1.1 Mobile Marketing

Online Marketing campaigns carried out using the mobile medium are mostly subsumed under the term Mobile Marketing or Mobile Advertising (Leppäniemi et al. 2006a). Although, literature does not provide a common understanding for these terms, it is agreed that their unique features notably contribute to the bene-fits of marketing campaigns (Barwise and Strong 2002; Salo and Tahtinen 2005; Wohlfahrt 2002, p. 247 ff.). The high penetration of the population with mobile devices, in combination with the available mobile network coverage, provides the foundation for technically reaching more mobile users than in any other me-dium in the Western World (Lispman 2008; Bundesnetzagentur 2008). Due to the high interactivity, possible one-to-one communications and the deep integra-tion of mobile devices in the personal sphere of its users, the mobile medium is also more personal than any other media (Sultan and Rohm 2005; Feldmann 2005, p. 60 f.).

The prevailing lack of available mobile services, high prices for mobile data communications, and usability issues of mobile devices let voice- and messag-ing-based mobile communications predominate throughout the recent years. As a result, Mobile Marketing means were mainly focused on messaging or text-based Mobile Marketing campaigns in the past (Steimel et al. 2008, p. 17 ff.).

4 Introduction

Today, fuelled by the growing success of the mobile Internet, the portfolio of Mobile Marketing campaigns is aligning with their equivalents of the fixed Internet (i.e. towards Mobile Marketing campaigns conducted via the mobile web). Thereby, Mobile Advertising is currently the fastest growing marketing means (Strategy Analytics 2007, Kishore 2008). Consequently, the competition for the attention of mobile users is increasing at the same pace. Telecommunica-tion enterprises, Internet providers (e.g. Google1, Yahoo2), software manufactur-ers (e.g. Microsoft3) and mobile device manufacturers (e.g. Nokia4) are position-ing their organisations as Mobile Marketing Providers in the centre of the adver-tising-financed mobile media market. In order to succeed in this two-sided mo-bile media market, Mobile Marketing Providers have to satisfy the needs of both customers on each market side. Whereas advertisers demand high effectiveness of their Mobile Marketing campaigns (Steimel et al. 2008, p. 60), mobile users expect Mobile Marketing campaigns relevant to their personal interests or needs (Steimel et al. 2008, p. 47; Ehrlich 2008, p. 267).

These demands can be fulfiled by the application of context information ac-quired from the mobile network in order to target Mobile Marketing campaigns. It allows to distinctly identify mobile users, determine their current geographical location and log their access time. This information can be compiled into a pro-file, which reflects the momentary usage situation of a mobile user. It allows advertisers to individually evaluate and select only those mobile users, which exhibit certain relevance in relation to their momentary usage situation (e.g. only mobile users in close vicinity to a Point-of-Sale (POS)). From a mobile user’s point-of-view, this allows the provision of relevant offerings that can satisfy their immediate needs (Figge and Theysohn 2006). At the same time, this can alleviate the very limited user experience of mobile devices, with regard to

1 Online advertising market leader Google initiated the development of the open source mo-

bile operating system Android (Google Corporation 2009a) and recently acquired the lead-ing mobile off-deck advertiser AdMob (AdMob 2009).

2 Yahoo significantly enhanced and extended its mobile advertising services (Wiley et al. 2007).

3 Microsoft bought Mobile Advertisement Provider ScreenTonic to position itself in the mo-bile advertising market (Microsoft Press 2007).

4 Market leader for mobile handsets Nokia bought the Mobile Advertiser enPocket (Nokia 2007) and launched a mobile multimedia service Ovi, which enhances the mobile phone by making the personal data for users accessable via the mobile Internet (Nokia 2009).

Introduction 5

screen size and input capabilities, by the reducing the search expenditures of mobile users for the desired information (Feldmann 2005, p. 59).

The following section is going to outline the research object of this thesis with regard to the Mobile Marketing Providers enabling this kind of context-sensitive Mobile Marketing campaigns for advertisers.

1.2 Research Objectives and Questions

The potential and benefits of context-sensitive Mobile Marketing campaigns have been widely acknowledged in academia. Consequently, concepts leverag-ing available context information provided by the mobile network are not new and have already been discussed throughout various publications (cp. Section 2.6). However, this body of literature considers context information merely as additional means to improve the targeting effectiveness of Mobile Marketing campaigns. Whereas focusing mainly on technical implementation issues, legal compliance and user acceptance, the impacts of context information on the tradi-tional commercialisation of mobile media performance, which enables Mobile Marketing campaigns for advertisers, have hardly been covered yet.

Motivated by the relevance of context information for Mobile Marketing cam-paigns and with respect to the existing contributions in the Mobile Marketing domain, the research objective of this thesis is defined as follows:

Research Objective: Exploration, analysis, and addressing potential impacts of context information on the traditional commercialisation mobile media per-formance offered on mobile media markets by Mobile Marketing Providers.

Once the impacts of context information are explored and analysed, this knowl-edge is translated into a market engineering recommendation framework (MoMeMa framework) for Mobile Marketing Providers. Along its complemen-tary engineering process model, it documents for each market development stage/activity, which design aspects for mobile media market platforms are rec-ommended in order to take advantage of context information to enable Mobile Marketing campaigns.

Based on the outlined research objective, this thesis is going to follow the design science paradigm – which is introduced later (cp. Section 1.4.2). Thereby, the proposed MoMeMa framework for the Mobile Marketing Providers represents

6 Introduction

the IT artifact. Subsequently, it is used to implement a prototypical mobile me-dia market platform as a software system, which demonstrates the technical fea-sibility of the engineering recommendations proposed in the MoMeMa frame-work. Finally, the utility of the MoMeMa framework is empirically evaluated by conducting expert interviews.

In line with the previously covered procedure of this work, the following more specific research questions have been derived from the specified research objec-tive:

• How can the suspected impacts of context information be systematically ex-plored and analysed (Chapter 3)?

• What are relevant impacts of context information on the traditional commer-cialisation of mobile media performance by Mobile Marketing Providers in mobile media markets (Chapter 4)?

• What is a suitable reference model that serves as a conceptional foundation capturing the developed engineering recommendations for mobile media mar-ket platforms to address the impacts of context information (Chapter 5)?

• How can a corresponding IT artifact, which documents the engineering rec-ommendations of mobile media market platforms for context-sensitive mobile media performance, be developed (Chapter 6)?

• Is the developed IT artifact technically feasibile (Chapter 7)?

• What is the utility developed IT artifact for addressing the impacts of context information on the commercialisation of traditional mobile media perform-ance (Chapter 8)?

The course of action of this work to answer the outlined research questions is addressed in the following section.

1.3 Structure of the Thesis

The introducing sections of this chapter have illustrated the potential of the mo-bile medium as the latest communication channel for advertisers. By acknowl-edging the increasing competition for the attention of mobile users by various market players (cp. Section 1.1), the exploration, analysis and addressing of im-pacts, which context information are supposed have on the traditional commer-cialisation of mobile media performance, can provide economically relevant

Introduction 7

contributions for Mobile Marketing Providers. Based on the introduction, which served as the research motivation, the thesis consists of nine chapters as depicted in Figure 1.1.

Chapter 2 continues with a summary of the state-of-the-art advertising-financed media as a vehicle for marketing campaigns. First, the structure and function of media markets are illustrated along the classic triangle relationship model – which applies to all types of media markets. Subsequently, the characteristics of traditional media are briefly addressed as a starting point. Then, the distinctive features and benefits of online media are discussed in the next section. Based on this knowledge, the work continues with the introduction of the mobile media as subset of the online media, but with additional distinctive features, which can become especially beneficial for Mobile Marketing campaigns. In this regard, context information as mainly unexploited potential of mobile media for Mobile Marketing campaigns is discussed. Following this, the special characteristics of context information, which concern Mobile Marketing campaigns and their po-tential main impacts on the traditional commercialisation of mobile media per-formance, are highlighted. Finally, the obligatory literature review on this issue will reveal that existing research has mainly focused on concepts and architec-tures enabling the integration of context information into Mobile Marketing campaigns. Consequently, these issues are subject to further analysis in the fol-lowing chapters.

Chapter 3 develops a conceptional analysis framework to explore systematically the potential impacts of context information on the traditional commercialisation of mobile media performance. For this, this work takes a paradigm shift and starts to consider mobile attention rather than mobile media performance as the economic good traded in mobile media markets. Based on this new perspective, all relevant aspects for the commercialisation of mobile attention are considered and reflected in the conceptional analysis framework. This includes the charac-teristics of mobile attention as an economic good, a Mobile Marketing Pro-vider’s mobile attention value chain, as well as the features of mobile attention as economic good from the perspective of network economics (i.e. two-sided markets).

8 Introduction

Figure 1.1: Structure of the Thesis

Motivation and RelevanceA

Introduction (Chapter 1)

State-of-the-Art Advertising-financed Media (Chapter 2)

Impacts of Context-sensitive Mobile AttentionB

Conceptual Analysis Framework for Mobile Attention (Chapter 3)

Impacts of Context Information on Mobile Attention (Chapter 4)

�� C

Reference Model for the Development of Mobile Media Markets (Chapter 5)

Engineering Recommendation Framework for Mobile Media Markets (Chapter 6)

Conclusion and Further ResearchE

Conclusion, Contributions and Further Research (Chapter 9)

�� D

Prototypical Implementation of a Mobile Media Market Platform (Chapter 7)

Empirical Evaluation of the Market Engineering Recommendation Framework (Chapter 8)

Introduction 9

Due to the unwieldy number of possible Mobile Marketing campaigns and the number of available types of context information, Chapter 4 begins with narrow-ing down the analysis scope in order to reduce the complexity of the analysis. Thus, Mobile Advertising campaigns as a subset of Mobile Marketing cam-paigns delivered via the mobile web are analysed. Then, following the previ-ously introduced conceptional framework, the impacts of context information on the traditional commercialisation of mobile attention are analysed. Given the novelty of Mobile Advertising campaigns integrating context information, an explorative literature review as a research method is used.

In order to translate the findings of Chapter 4 into engineering recommendations for mobile media market platforms, a proven reference model is required to en-sure all necessary engineering aspects are going to be covered. By acknowledg-ing mobile media markets as a subset of electronic markets, Chapter 5 chooses Market Engineering concept of Weinhardt et al. (2003), which provides a holis-tic approach by covering Information and Commnunication (ICT) infrastructure and business model aspects beyond the traditional focus on resource allocation mechanisms. Nevertheless, since mobile media markets exhibit several distinct characteristics, the Market Engineering concept has to be aligned appropriately in some of its aspects.

Based on the adapted Market Engineering approach, Chapter 6 presents the IT artifact in the form of the engineering recommendation framework (MoMeMa) for mobile media market platforms of context-sensitive mobile attention. It is developed along the complementary engineering process model provided by the Market Engineering concept. For Mobile Marketing Providers, its main contri-butions comprise four aspects. First, it documents the main mobile media market stakeholders and their interests. Second, it provides a characterisation of the economic market environment, which a mobile media market platform will be embedded. Third, the relevant specfications for context-sensitive mobile atten-tion as transaction object are given. Fourth and finally, the design recommenda-tion for the market transaction service consisting of business model, resource allocation mechanism, and ICT-infrastructure component are provided.

The technical feasibility to implement mobile media market platforms by explic-itly applying the proposed MoMeMa framework is demonstrated in Chapter 7. For this, a prototypical software system in the form of a mobile media market

10 Introduction

platform is implemented. It comprises a mobile web-portal, which constitutes the communication channel between mobile users and advertisers. Furthermore, the underlying mobile media market component provides the transaction service for allocating the respective context-sensitive mobile attention.

The evaluation of the proposed IT artifact is presented in Chapter 8. Due to the novelty of the context-sensitive Mobile Marketing campaigns, expert interviews were conducted in order to substantiate the most relevant impacts of context in-formation on the traditional commercialisation of mobile attention, as well as the utility and feasibility of MoMeMa framework for the practice.

Finally, Chapter 9 summarises the research approach of this work and highlights the research contributions along with practical implications. Thereby, major findings constitute explored impacts of context information on the commerciali-sation of mobile attention, together with the acquired knowledge on how to ad-dress them with appropriate engineering recommendations for mobile media market platforms. In closing the chapter, several ideas for further research are discussed.

1.4 Research Scope and Methodology

The following Section 1.4.1 is going to outline the defined research scope for this thesis within the Mobile Marketing domain. Subsequently, Section 1.4.2 presents the design science framework as methodology applied to address the specified research objective.

1.4.1 Research Scope

The research scope of this thesis comprises a hierarchy of five scopes within the information systems (IS) field (cp. Figure 1.2).

Introduction 11

Figure 1.2: Research Scopes of this Work

The outline of this work comprises the IS field in which the Mobile Marketing domain as the main research scope is further embedded. Subsequently, its com-plex ecosystem is narrowed down as follows:

• Geographical Region: The IT artifact presented in Chapter 6 is supposed to enable the solution to currently unsolved problems in a specific domain (Hev-ner et al. 2004). Consequently, it has to be developed and evaluated with re-spect to a specific market environment, which is divided into technology, socio-demographic and legal components (Weinhardt et al. 2003). Since these components naturally differ across the countries of the world, an engineering recommendation framework for mobile media markets attempting to cover all these specific aspects would be either highly complex or trivially abstract.

For this, the IT artifact aims at the development of the most relevant engineer-ing recommendations for mobile media markets platforms in the European Union (EU). As a conglomerate of countries covering the largest part of Europe, the EU has common legal directives for its members (Moussis 2001). This becomes favourable because context information is considered personal information (Art. 29 Data Protection Working Party 2007; Klüver et al. 2006)

Mobile Marketing Domain

Geographical Region

Competitive

Environment

Market

Participants

Mobile

Marketing

Campaigns

Information Systems Field

12 Introduction

and is protected by the European Directive on privacy and electronic commu-nications (European Parliament 2002).

• Competitive Environment of Mobile Media Market Platforms: The con-tribution of this work focuses on the development of engineering recommen-dations for mobile media market platforms. Thereby, it ignores competition between multiple Mobile Marketing Providers and assumes a monopoly mar-ket. Nevertheless, the defined market structure is likely to reflect reality for a limited period. Today, context-sensitive Mobile Marketing campaigns are hardly found in practice (cp. Section 2.4), but their introduction may generate at least a temporary monopoly for the first mover and may lead to a competi-tive market structure later on. Thus, this work acknowledges the need to cover mobile media market platform engineering recommendations for Mobile Marketing Providers acting in a competitive environment, but postpones this objective to further research (cp. Section 9.4).

• Market Participants: Mobile media markets constitute an ecosystem, which contains various types of market participants contributing in the value crea-tion process (Steimel et al. 2008, p. 120). However, not all of these market participants are affected by the integration of context information into Mobile Marketing campaigns. Consequently, those market participants are either dis-regarded or aggregated under the roof of a Mobile Marketing Provider (cp. Section 4.1.4).

• Mobile Marketing Campaigns: Due to the plethora of available types of Mobile Marketing campaigns, which impose different requirements for Mo-bile Marketing Providers, this work focusses on developing engineering rec-ommendations for mobile media market platforms solely enabling Mobile Advertising campaigns. According to recent market studies, this subset of Mobile Marketing campaigns is currently the most representative and promis-ing ones for the near future (Strategy Analytics 2007). In addition, this work is not going to address implementation aspects of Mobile Advertising cam-paigns (e.g. design guidelines for context-sensitive website banners). Never-theless, it seems reasonable to also consider the development of new Mobile Marketing concepts explicitly incorporating the availability of context infor-mation rather than using them merely to improve the targeting effectiveness (cp. Section 9.4).

Introduction 13

The previous paragraphs have illustrated the research scope of this work. The following section outlines the application of design science research guidelines, as according to Hevner et al. (2004) defined in the research scope.

1.4.2 Design Science Research Framework

Information Systems Research can be divided into design and behavioural sci-ence branches. Although, there is still an ongoing discussion in the IS commu-nity about the distinct differentiation of these two research approaches (Hevner et al. 2004; March and Smith 1995), they can be roughly outlined as follows. Whereas behavioural science aims at understanding and explaining observations to render them into testable theories (March and Smith 1995), the objective of design science is to “address an important organisational problem“ (Hevner et al. 2004) by designing, developing and evaluating an IT artifact (Olivier 2004).

This work applies the design science paradigm by creating a novel IT artifact to demonstrate a possible solution for a problem in the Mobile Marketing domain. For this, it utilises the frequently cited and applied design science framework of Hevner et al. (2004) as methodological approach. In the following, the seven proposed guidelines of this framework are briefly summarised while illustrating how this work addressed them:

• Problem Relevance: IS research starts with the identification of a relevant problem in an organisational domain, which can be addressed by the devel-opment of an IT artifact. The IT artifact is supposed to constitute a technol-ogy-based solution, which addresses important business aspects relevant to the IS community (Hevner et al. 2004).

The introducing sections of this chapter have already highlighted the potential of mobile media for carrying out Mobile Marketing campaigns, as well as the hardly exploited opportunities for Mobile Marketing Providers of enabling context-sensitive Mobile Marketing campaigns.

• Design of an Artifact: The objective of design science is creating a novel IT artifact for addressing an important organisational problem. In this regard, IT artifacts can represent constructs, models, methods, or instantiations and have to be described effectively in order to enable their implementation and appli-cation in an organisational context (Hevner et al. 2004). They do not have to be complete information systems capable of being used in practice. They

14 Introduction

rather represent concepts for e.g. practices, technical capabilities, and prod-ucts for developing innovative information systems (Denning 1997).

This work presents the MoMeMa framework for mobile media markets as IT artifact (cp. Chapter 6). It provides engineering recommendations for mobile media market platforms owned and operated Mobile Marketing Providers and it constitutes a model.

• Design Evaluation: It is not sufficient to develop an IT artifact which ad-dresses an identified research problem without disclosing its utility to the IS community (Hevner et al. 2004). Consequently, evaluation methods have to be applied to assess the utility, quality, and efficiency of an IT artifact in terms of functionality, completeness, consistency, accuracy, performance, re-liability or usability (Hevner et al. 2004).

The evaluation of the IT artifact is conducted in two steps. First, Chapter 7 presents a developed software prototype of a mobile media market platform. It is designed based on the MoMeMa framework in order to demonstrate the technical feasibility to implement the proposed mobile media market engi-neering recommendations. Second, the utility of the IT artifact to address the identified impacts of context information on the traditional commercialisation of mobile attention in practice, is evaluated by conducting expert interviews with individuals from selected organisations in the mobile media ecosystem (cp. Chapter 8).

• Research Contributions: According to Hevner et al. (2004), there are two dimensions of contributions for design science research. The first dimension constitutes the environment of the addressed problem space (e.g. people, or-ganisations and technologies) and the second one represents the IS knowledgebase, which holds foundations (novel constructs or models) and methodolo-gies (measure and evaluation metrics).

This work provides contributions to the IS knowledge base of the addressed problem space. In the sense of Gregor (2006), the first contribution constitutes the exploration and analysis of context information impacts on the traditional commercialisation of mobile media performance and represents an analysis theory (Theory Type I).

The gained knowledge from this analysis then lays the foundation for the sec-ond contribution: The developed, prototyped, and evaluated IT artifact (Hev-

Introduction 15

ner et al. 2004), which contributes to a currently unsolved organisational problem by translating the identified impacts of context information into a structured engineering recommendation framework for mobile media market platforms. For this, it produces significant value for Mobile Marketing Pro-viders aiming to exploit the benefits of enriching Mobile Marketing cam-paigns with context information.

• Research Rigor: Rigor in design science denotes applying rigorous methods for the construction and evaluation of IT artifacts.

In order to conduct a sound research approach, this work follows design sci-ence research paradigm based on the framework of Hevner et al. (2004). In addition, chapters 3, 5, and 8 provide rigor methods either for the develop-ment or evaluation of the IT artifact.

At first, Chapter 3 presents the development of a conceptional framework for the analysis of context-sensitive mobile attention. It comprises network eco-nomics models, the attention economy paradigm, as well as the aspects of transaction cost theory.

Next, Chapter 5 introduces the proven Market Engineering concept of Wein-hardt et al. (2003), which serves as the foundation for the development of the MoMeMa engineering recommendation framework for mobile media markets.

Finally, Chapter 8 documents the findings of conducted expert interviews to substantiate the feasibility and utility of the IT artifact, to address the identi-fied impacts of context information in practice.

• Design as a Search Process: The design of an IT artifact is the result of an iterative process in search for the most appropriate solution for an addressed problem (Hevner et al. 2004). Since the best or optimal design cannot be de-rived, heuristic search strategies applied in a generate/test cycle (Simon 1996) can produce feasible design results.

The IT artifact of this work has been subject to an iterative research process conducted over more than three years. The quality of the design has been con-tinuously improved by incorporating the reviewer comments to five published

16 Introduction

conference research papers5. In addition, the proposed IT artifact design was subject to review in the research project PREMIUM6 as well as its successor PREMIUM Services7. Thereby, it was also exposed to practitioner audiences.

• Communication of Research: The results of design science research have to be presented to the respective technology-oriented and management oriented audiences. While practitioners can take advantage of the IT artifacts utility, the knowledge base has to be broadened for researchers willing to extend the provided research results.

For this work, five relevant papers8 have been published to international con-ferences, which targeted information systems as well as computer science (CS) communities. The received feedback from researchers and practitioners has been incorporated in this work to improve the quality of used theoretical foundations, the applied methodologies, and the design of the IT artifact.

The previous paragraphs have outlined how the design sciences research process is applied in this work. Thereby, the introducing sections have already revealed the relevance of the mobile medium and the application of context information for Mobile Marketing campaigns. The subsequent chapter pro-vides a state-of-the-art advertising-financed media whilst in particular high-lighting the unexploited potential of mobile media.

5 For an overview of the published research papers, access the website of the Chair for Mo-

bile Business and Multilateral Security (http://www.m-chair.net). 6 PREMIUM: Preis- und Erlösmodelle im Internet – Umsetzung und Marktchancen (PRE-

MIUM 2003) 7 PREMIUM Services: This project attempts to take the developed pricing models of PRE-

MIUM and prototypically implement and offer them via a SOA-based pricing services platform (PREMIUM Services 2009).

8 For an overview of the published research papers, access the website of the Chair for Mo-bile Business and Multilateral Security (http://www.m-chair.net).

State-of-the-Art Advertising-financed Media 17

2 State-of-the-Art Advertising-financed Media The business mission of traditional media corporations is to generate audiences by providing informative and entertaining content while selling the acquired at-tention of media consumers to advertisers for conducting marketing campaigns (Zerdick et al. 2001, p. 50). Thereby, in providing this media performance, me-dia corporations operate a two-sided market with media consumers on the con-tent market (side) and advertisers on the opposite advertisement market (side).

Whereas the basic structure of media markets as two-sided market remains con-stant across the different types of media, the evolution of fixed online and mo-bile media has tremendously changed communication processes between market participants. Consequently, the features of new media with respect to the oppor-tunities for marketing campaigns are subject to the following sections.

Section 2.1 begins by defining the term marketing and related concepts with re-gard to the scope of this work. It discusses the concept and role of advertising-financed media markets for conducting marketing campaigns. Thereby, the ide-alised structure of media markets, which applies to all of its types, is illustrated.

Subsequently, Section 2.2 introduces traditional media markets and highlights the allocation of media performance to advertisers in order for them to conduct marketing campaigns.

Online media is introduced in Section 2.3. Its interactivity as its distinctive fea-ture significantly differentiates it from traditional media and enables new target-ing models for Online Marketing campaigns, as well as pricing models for online media performance.

Section 2.4 introduces the mobile media as a subset of online media. Its distinc-tive features unleash several additional advantages for marketing campaigns, but corresponding Mobile Marketing campaigns can hardly be found in practice.

Then, Section 2.5 continues by highlighting the predominantly unexploited po-tential of mobile media of utilising context information for marketing cam-paigns. Thereby, available types of context information are introduced, the bene-fits of context-sensitive Mobile Marketing campaigns are outlined and finally indicators for possible impacts of context information on the traditional com-mercialisation of mobile media performance revealed (Section 2.5).

18 State-of-the-Art Advertising-financed Media

Section 2.6 presents a literature review on the current research contributions concerning context-sensitive Mobile Marketing. As a result, the need to explore the potential impacts of context information on the traditional commercialisation of mobile media performance is substantiated. Finally, Section 2.7 summarises and concludes the chapter.

2.1 Marketing and Media Markets

In order to establish an understanding of the terms marketing and media marketsas well as other related concepts in the context of this work, their definition is subject to the following sections.

2.1.1 Defining Marketing

While it is agreed that marketing as an activity of enterprises is inevitable in the global economy of today (Nieschlag et al. 2002, p. 3 f.; Kotler et al. 2001, p. 1 f.), still a plethora of different characterisations for this term can be found (Mef-fert 2000, p. 10). For a consistent definition and limitation of the marketing do-main throughout this thesis, the concept of the American Marketing Association (2007) is adapted, which defines marketing as

“ ... the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.

In this context, marketing policies are representing a marketing strategy of an organisation. They are typically categorised based on the widely and frequently cited proposal of McCarthy (1960). Therein, he characterises marketing as a portfolio of (P)roduct, (P)rice, (P)lace and (P)romotion policies – also known as the 4Ps. Later on, Bordon (1964) coined the term Marketing Mix for this portfo-lio (cp. Figure 2.1).


Figure 2.1: Policies in the Marketing Mix (based on McCarthy 1960)

Whereas the product policy is concerned with product-related decisions accord-ing to the needs of customers, the price policy is supposed to define the price for a product with respect to factors such as market competition or customer’s will-ingness-to-pay. The distribution strategy (i.e. how a specific product is trans-ferred to the respective customer) is constituted as place policy. Finally, the promotion policy comprises all means of an organisation to communicate with its customers and partners. This includes methods such as advertising, branding or personal selling to promote a product or brand (McCarthy 1960). Therefore, the promotion policy owns an exceptional position as it exhibits various interde-pendencies with the other policies. On the one hand, the product, price, and place policies utilise the promotion policy to communicate their outcome to the customer (e.g. promotion of price discounts). On the other hand, the promotion policy provides communication means on their own (e.g. promoting the brand of an organisation) (Kotler et al. 2001, p. 986).

Within this outlined marketing concept, the research objective of this work is to provide media corporations9 with means to establish an effective communication channel between media consumers and advertisers while reducing information asymmetries. Consequently, only those marketing instruments, which explicitly require a communication medium, are addressed within the scope of this work.

9 In the context of mobile media markets, media corporations are referred as Mobile Market-

ing Providers.

Marketing Mix

PlaceInventory Management

Transportation

Distribution Channels

ProductProduct Differentiation

Product Innovation

Product Elimination

PricePrice Discrimination

Price Bundling

Seasonal Pricing

PromotionAdvertising

Sales Promotion

Personal Selling


According to Kaspar (2006, p. 11 ff.), such a communication medium can be characterised through an instrumental, organisational, and social dimension:

• Instrumental or technological Dimension: A medium represents an instru-ment for processing information” or “transport systems for characters”.

• Organisational Dimension: Media represents an “organised social system to fulfil an information and communication objective”.

• Social Dimension: Media represents “social institutions providing services for social structures and process”.

With respect to the research objective, this work follows the definition of Kaspar (2006, p. 11 f.) for the term media as “complex institutionalised systems provid-ing an organised communication channel with a specific performance”.

While these media serve all kinds of communication purposes, advertising-financed media in the context of this work denotes media, which is utilised to convey marketing campaigns from advertisers to their respective recipients. Thereby, the service of providing advertisers with the opportunity to contact an audience via advertising-financed media for marketing campaigns is referred to as media performance (Zerdick et al. 2001, p. 167). It can be acquired on media markets.

Finally, following Kotler (2001, p. 931), marketing campaigns “... constitute any kind of non-personal presentation and promotion of ideas, goods and services of a distinctly identified advertiser through the application of paid advertising me-dia”.

The summary of all defined terms and concepts is depicted by Figure 2.2, which defines the scope of this work within the marketing domain.


Figure 2.2: Marketing Campaigns within the Scope of this Work

2.1.2 Concept of Media Markets

According to Kotler et al. (2001, p. 19), a market can be considered to be “... composed of potential customers with a specific need, who are willing and able to satisfy this need or desire through an exchange process”.

Media markets consist of a triangular relationship, which is constituted by its participants. In the centre acts a media corporation as intermediary between me-dia consumers and advertisers. It primarily focuses on satisfying the interests of advertisers in the form generating reach10. Therefore, the attention of media consumers is acquired by providing informative/entertaining content, which is subsequently exposed to marketing campaigns of advertisers (Zerdick et al. 2001, p. 50). Depending on the medium, those measures may involve TV-spots, radio or online / mobile advertisements. They are supposed to inform media consumers about the products or services and ultimately aim at convincing the media consumer to purchase (Zerdick et al. 2001, p. 49 f.). Figure 2.3 depicts the idealised media market structure.

10 Reach denotes the number of media consumers who can be reached by a specific medium

for marketing campaigns (e.g. TV channel).

Marketing Domain

Marketing

Working Definition

Marketing Mix

Medium

Marketing

Campaign


Figure 2.3: Triangular relationship of advertising media markets (based on Zerdick et al. 2001, p. 50)

In the context of advertising-financed media and thereby in the scope of this work, different understandings exist for the term media market. On the one hand, a media market can represent the entire market for a certain advertising media vehicle (e.g. the media market comprised of all TV-stations in Germany). On the other hand, it can represent a single market, which is provided and oper-ated by one organisation (e.g. the online advertising media market spanned by the Online Advertising service AdWords offered by Google (Google Corpora-tion 2009c)). Whereas in the former case, media corporations compete for ad-vertisers requesting media performance, advertisers compete for the media per-formance of a single media corporation in the latter case. In accordance with the defined research objective, advertising-financed media markets throughout this work will constitute a single market operated by a single media corporation.

Along with the specified concepts marketing and media markets, the different types of media as well as their distinctive features are presented in the following sections.

2.2 Traditional Media

Traditional media markets offer media vehicles (e.g. TV, radio, print, etc.) as means for unidirectionally broadcasting editorial content to media consumers. This content is typically bundled with marketing campaigns. Thereby, a com-

Media

Corporation

Consumers Advertisers

offers products and services

generates

reach for the

medium

purchases offered products

and generates revenues

pays for

opportunity

to advertise


munication channel between advertisers and media consumers is established (Zerdick et al. 2001, p. 50). It enables advertisers to influence media consumers in ways beneficial to their organisation (Kotler et al. 2001, p. 931). Conse-quently, media corporations act as intermediaries between these two parties while providing media performance for advertisers (Zerdick et al. 2001, p. 50).

Advertisers allocate this media performance based on a media plan, which is developed with the support of media agencies. Figure 2.4 depicts this idealised process. At first, advertisers communicate their marketing objectives (impact) and budget (costs) to the media agency. Subsequently, the latter requests pricing and quality information from respective media corporations. Based on this in-formation, a media plan is developed. It consists of the planned media invest-ments as well as the planned reach and targeted audience (contacts) for a mar-keting campaign. Finally, the media performance is allocated based on the me-dia plan from the respective media corporations in order to conduct the planed marketing campaigns (Bogs 2001, p. 111 ff.).

Figure 2.4: Market and Media Information for Media Planning (Bogs 2001, p. 114)

Media

Budget

Quality

Costs

Media

Plan

Pricing

Impact

Media

Prices

Discounts

Media

Investment

Target Group

Media Quality

Contact Quality

Optimization

of Reach & Contacts

Profitability


The efficiency of the allocated media performance is determined by its qualityand pricing (Bogs 2001, p. 37 f.):

• Quality: The quality of traditional media is based on the general distribution of the medium within the population (medium quality), the number of poten-tial recipients (contact quality) as well as available statistical information about their average characteristics (target group). The latter may comprise socio-demographic (e.g. age, gender or education), psychographic (e.g. per-sonality), geographic (e.g. consumer home location) and special characteris-tics (e.g. retiree) of target groups (Bogs 2001, p. 37 f.; Kotler et al. 2001, p. 431).

• Price: The price of media performance is typically based on static price lists, if applicable, supplemented by discounts. In practice, predominantly the cost-per-mille11 (CPM) pricing model is used. It denotes the price for reaching 1000 recipients by a certain marketing campaign on a specific medium (Bogs 2001, p. 35).

Today, traditional media is still considered the dominating vehicle, which offers advertisers the highest reach in the population (European Interactive Advertising Association 2006 and 2008d). Although, it allows broadcasting inexpensive me-dia contents to a large audience via this unidirectional communication channel, it prevents an interactive dialogue between advertisers and media consumers.

2.3 Online Media

With the emergence and success of the Internet, online media has become sig-nificantly relevant for marketing campaigns within the last decade (Ehrlich 2008, p. 265 ff.; Jupiter Research 2007; Interactive Advertising Bureau Europe 2008). It constitutes an inexpensive and interactive communication channel. Consequently, media consumers are increasingly shifting their attention towards online media – and away from traditional media. Although, the outlined struc-ture of media markets remains unchanged12, it offers several distinctive features beneficial for the marketing campaigns.

11 Mille is latin and means 1000 (Online Directionary 2009). 12 In the context of online media, “media corporations” are now considered “Online Market-

ing Providers” whereas “online users” denote the “media consumers” of traditional media.


2.3.1 Distinctive Features of Online Media

Online media constitutes several distinctive features, which differentiates them from traditional media (Urchs 2008, p. 9). In this regard, the interactivity of this communication channel, as well as its unrestricted use is considered to have a significant impact on the characteristics of media markets.

Traditional media offers only a unidirectional communication channel for adver-tisers to media consumers. In order to respond, media consumers have to use other channels (e.g. mobile SMS-based text messages) (Steimel et al. 2008, p. 70). This leads to media disruptions, which interrupts the communication proc-ess in logistic and temporal manner (Skiera et al. 2001). By contrast, the interac-tivity of the Internet enables a bidirectional communication channel (Skiera et al. 2001) with global reach. This changes the paradigm of advertisers dominating the communication with media consumers and leads towards an interactive dia-logue with equal rights (Stewart and Pavlou 2002, p. 380).

The Internet as an online medium grants unrestricted access for every organisa-tion willing to generate and offer media performance via media markets. Whereas traditional media is exclusively owned by media corporations (e.g. TV or radio stations), the Internet allows any organisation to become an Online Marketing Provider without the need for traditional media corporations as com-munication enablers13. Thereby, the interactivity of the Internet allows a direct communication between advertisers and online users without Online Marketing Providers as intermediaries. Nevertheless, both parties are not directly compati-ble. Online users are not typically seeking Online Marketing campaigns to sat-isfy their information needs. Therefore, Online Marketing Providers as interme-diaries, who attract online users with editorial content and allow advertisers to bundle their Online Marketing campaigns to this content, are still required (Ev-ans 2003).

The low entry barrier to online media markets attracts new market participants willing to act in the role of an intermediary. These Online Marketing Providers are driving the growth of online media markets (Jupiter Research 2007), while at

13 Nevertheless, Internet Service Providers are required to provide the communication infra-

structure of the Internet. However, in contrast to traditional media, these organisations do not regulate the access.


the same time allowing advertisers to bypass the services of traditional media agencies. Although the media agencies are still involved in the development of sophisticated marketing campaigns, search engine providers like Google or Ya-hoo, offer a simple interface for advertisers to create text-based online adver-tisements and expose them to the targeted audience (Google Corporation 2009c; Google Corporation 2009d; Yahoo Corporation 2009a).

2.3.2 Characteristics of Online Marketing

The interactivity of the Internet has significantly affected the effectiveness of Online Marketing campaigns (Stewart and Pavlou 2002; Skiera et al. 2001). Thereby, the ability of advertisers to establish a bidirectional communication channel with media consumers (online users) exhibits the following advantages (Hegge 2008, p. 287):

• Interactivity: The interactivity allows online users to respond immediately to Online Marketing campaigns while advertisers are able to track and evaluate this feedback in real-time (e.g. click on online banner).

• Immediate Feedback: Advertisers can immediately apply the gathered feed-back in order to align their current Online Marketing campaigns. For instance, this can involve the adjustment of an Online Marketing campaign’s targeting concept due to newly identified online user preferences (i.e. behavioural tar-geting).

• Pseudonymity of Online Users: The Internet theoretically allows acquiring knowledge of online users without deeply violating their privacy. Therefore, the usage pattern of an individual online user can be pseudonymously recog-nised and be used to individually target an Online Marketing campaign.

Figure 2.5 further illustrates the difference between marketing campaigns con-ducted via traditional media compared to those of online media. It highlights the value of an interactive medium in order to eliminate media disruptions in the communication process between media consumers and advertisers.


Figure 2.5: Targeting and Performance Measurement of Traditional vs. Online Marketing Campaigns (based on Skiera et al. 2001)

In conclusion, the Internet as a vehicle for marketing campaigns has neither changed fundamental marketing concepts (cp. newspaper advertisement vs. web-banner on online newspaper) nor affected the introduced idealised triangle media market structure. Instead, it allows an interactive communication process between online users and advertisers, which enables new targeting models for Online Marketing campaigns and pricing models for media performance.

2.3.2.1 Targeting and Reach of Online Marketing Campaigns

The efficient use of marketing budgets is significantly determined by an adver-tiser’s ability to target marketing campaigns to the audience groups relevant for the offered products and services. Consequently, targeting implies advertisers to acquire only online media performance for those recipients, which are relevant for a certain Online Marketing campaign (Hegge 2008, p. 286; Iyer et al. 2005).

In the case of traditional media, research organisations acquire the correspond-ing preferences ex-post to the media broadcast on a statistical basis (Bogs 2001, p. 36 ff.), whereas the interactivity of the Internet allows gathering the prefer-ences of online users in real-time based on their observed online behaviour. In this regard, a large portfolio of online targeting methods is available in practice (Hegge 2008, p. 288 ff.):

Media Break

Marketing

ActivityTargeting

Recipient

(Consumer)

ControllingRecipient

Reaction

Response

Medium

Ina

ccu

rate

De

layed

,

Inco

mp

lete

Online Portal

Marketing

ActivityTargeting

Recipient

(Online User)

Traditional Marketing Online Marketing


• Technical Targeting: Online users accessing a website leave several types of technical information that can be used for basic targeting purposes. Among others, this involves the IP address14, browser model, or operating system.

• Contextual Targeting: Mainly text-based contents of an accessed website are analysed and Online Marketing campaigns are targeted accordingly. Therefore, the objective is to identify the topic of a webpage and derive po-tential user needs or preferences as a targeting foundation. In practice, one of the most prominent examples for this approach is Google AdSense Advertis-ing (Google Corporation 2009d).

• Keyword Targeting: According to the keyword or query provided by an online user, the respective Online Marketing campaigns are displayed. Its main application area constitutes search engine marketing offered by corpora-tions such as Yahoo (Yahoo Corporation 2009a), Microsoft (Microsoft Cor-poration 2009b) or Google (Google Corporation 2009c).

• Behavioural Targeting: This approach observes the behaviour of online us-ers in the web. Thereby it attempts to derive their potential needs statistically as a targeting foundation from the acquired click stream. It is considered as one of the most promising upcoming methods in the online marketing domain (Ehrlich 2008, p. 268; Deschene 2008).

• Profile-based Targeting: Profile-based targeting significantly differs from the previously presented approaches with regard to the way information about online users is acquired. The latter methods were founded on passive data, which is collected without the interaction of online users. By contrast, profile-based targeting requires that online users voluntarily disclose personal infor-mation (e.g. age, gender, personal interests). Although, this active data is con-sidered more valuable than the corresponding passive one (Sharma et al. 2008, p. 76), this kind of information is only available and used for a small percentage of Online Marketing campaigns. Additionally, issues such as wrong or obsolete information as well as privacy concerns of online users have to be taken care of.

14 For instance, IP addresses of fixed terminal devices reveal the roughly originating geo-

graphic region of an online user, which can be used for geo-targeting purposes. For in-stance, see the service of NetIP (Müller 2009).


The ability to target Online Marketing campaigns in real-time to the preferences of online users, reduces circulation waste, and increases response and conver-sion rates of Online Marketing campaigns (Hegge 2008, p. 294). However, there is a conflict of objectives between the (accuracy) of targeting and the desired reach of Online Marketing campaigns which depends on the type of applied online user data (cp. Figure 2.6).

Figure 2.6: Reach vs. Quality of Targeted Online Marketing Campaigns (Hegge 2008, p. 290)

The highest data quality is available for Customer Relationship Management (CRM) driven marketing campaigns (active data). It is acquired within a con-tinuous business relationship between advertiser and online user (Dun can and Moriarty 1998, p. 8; Albers 1998, p.17). Nevertheless, those marketing cam-paigns exhibit the lowest reach. On the contrary, online user typologies calcu-lated based on observed online behaviour (passive data) exhibits the lowest data quality, but the highest reach. Consequently, advertisers need to find the right balance between these two aspects in accordance with their marketing objec-tives.

2.3.2.2 Pricing of Online Media Performance

The online media performance offered by Online Marketing Providers is pre-dominantly priced and compensated based on interactive pricing models. The most prominent pricing model for online media performance is Cost-per-Mille (CPM), which originates in traditional media. It denotes the price an advertiser is required to pay in order to reach 1000 recipients for a marketing campaign via a specific media vehicle (Bogs 2001, p. 35). In contrast to traditional media, the

CRM / Login

“true”

Behavioral data

“likely”

Quality

ReachTypologies /

Socio-demographic

“calculated”


interactivity of the Internet allows measuring directly in real-time how many online users were exposed to a specific marketing campaign (e.g. via ad-views15) and to charge advertisers accordingly (Hegge 2008, p. 287).

Based on the CPM model, a plethora of advanced pricing or compensation mod-els have been developed as of today (Dickinger and Zorn 2008). These models can be characterised based on two aspects:

• Price Fixing: This aspect denotes the process of setting the actual price for the provided online media performance (e.g. the display of a web-banner on a webpage). The types of price fixings can be of static, dynamic-posted or dy-namic, interactive nature16 (Skiera et al. 2005; Lange 2003, p. 6). Predomi-nantly, either static (i.e. CPM model) or dynamic, interactive price fixings such as keyword auctions in search engine marketing (Google Corporation 2009c; Yahoo Corporation 2009a) can be found.

• Compensation Condition: The interactivity of the Internet allows observingthe behaviour of online users in real-time. Thereby, the compensation for online media performance (e.g. charging for the display of a web-banner on a webpage) can be tied to pre-specified online user behaviour. Once this behav-iour is observed by an Online Marketing Provider (e.g. click on a web-banner or product purchase), the respective advertiser is charged for the provided media performance (Dickinger and Zorn 2008)17.

In conclusion, the following advantages of interactive pricing models or more specifically compensation models can be highlighted as follows:

• Advertisers may only be charged for effectively delivered marketing cam-paigns. This means advertisers only have to pay for acquired online media performance, which actually lead to the defined marketing objectives such as exposing an online user to an online advertisement (Dickinger and Zorn 2008).

15 Ad-Views denote an online marketing metric, which shows how many times an online ad-

vertisement was viewed by online users (Freytag 2008). 16 Dynamic, interactive pricing means that a price is the result of an interaction between

buyer and seller (e.g. an auction) (Skiera et al. 2005). 17 For more information, a range of available online user behaviours applied in online com-

pensation methods can be found in Dickinger et al. (2008).


• Dynamic, interactive pricing models such as keyword auctions allow adver-tisers to acquire media performance from Online Marketing Providers accord-ing to their individual willingness-to-pay (WTP) (Aggarwal et al. 2006).

Online Marketing Providers such as Google (Google Corporation 2009f) have successfully demonstrated how to utilise online media for marketing campaigns while taking explicit advantage of these new targeting and pricing opportunities. However, the success of Online Marketing is accompanied by an increasing competition in online media markets, which constitutes one of the reasons why Online Marketing Providers are seeking to extend their business towards mobile media markets.

2.4 Mobile Media

After a long journey, which started out in the early 1990s with SMS-based text messages over WAP-based online access, the mobile Internet is now finally con-sidered to be on the verge of the mass market. Driven by tremendous usability improvements of mobile devices (e.g. Apple’s iPhone18 or Palms’ Pre19), quasi flat-rates for mobile data communication as well as expansion of mobile data connections, the adoption of the mobile Internet in Europe is consistently fuelled (TNS infratest 2009; Opera Corporation 2009).

From a technical perspective, the mobile Internet is still mainly considered a subset of the fixed Internet by solely offering media content via different (mo-bile) terminal devices. However, its distinctive features have significantly con-tributed to the benefit of advertisers conducting Mobile Marketing campaigns (Dufft 2003, p. 12).

2.4.1 Distinctive Features of Mobile Media

The mobile medium comprises a wide range of available mobile networks, transport technologies (Holland and Bammel 2006, p. 22 ff.) and device termi-nals (Holland and Bammel 2006, p. 5 ff.). The combination of these elements results in a large set of possible mobile communication scenarios. In its simplest form, this merely constitutes a peer-to-peer communication between two mobile users based on their cellular phones (e.g. via Bluetooth). In a highly advanced

18 For more details on the Palm Pre, refer to Palm (Palm Corporation 2009). 19 For more details on the Apple iPhone, refer to Apple (Apple Corporation 2009a).


form, it may comprise notebooks accessing the Internet via the mobile Internet, which ultimately corresponds to fixed Internet access. Feldmann (2005, p. 4) classifies possible instantiations of mobile media with regard to mobility dimen-sions and moving entities (cp. Table 2.1).

Table 2.1: Mobility dimensions and moving entities (Feldmann 2005, p. 4)

Stationary wireless

Nomadic

wireless Mobile

transportable Mobile

portable

Moving Information

++ ++ ++ ++

Moving device

-- + + ++

Moving person

-- - + ++

Legend: ++ applies; -- does not apply

The stationary wireless dimension comprises usage contexts in which a mobile user and device are stationary, but information is transmitted via mobile net-works (e.g. personal computer attached to Wi-Fi network). The nomadic wire-less dimension represents a stationary, but frequently changing usage context (e.g. mobile sales force person equipped with a notebook). The mobile trans-portable dimension encompasses devices, which are connected to transportable objects, but are not moved by the user itself (e.g. car radio, subway TV, etc.). Finally, the mobile portable dimension refers to devices, which are actually car-ried by users (e.g. mobile phone).

Based on this classification schema, mobile media in the context of this work refers to wireless (mobile) transferred information for devices in the mobile portable dimension. The distinctive features resulting from this dimension are discussed in the following sections. Whereas there is consensus about the exis-tence of distinct features, there is no available consistent understanding about its definition in literature (Figge 2007, p. 28). Therefore, this work follows the


proposition of Holland et al. (2006, p. 61), who document features, which have already been identified as beneficial to Mobile Marketing campaigns.

2.4.1.1 Location and Time Independence

One of most prominent features of the mobile medium constitutes the opportu-nity of mobile users to access data communication services independent from their current geographical location (Camponovo and Pigneur 2005; Nysveen et al. 2005). This ubiquitous access is substantiated by the continuous upgrade of mobile networks. Whereas in the early days, only the Global System of Mobile Communication (GSM) constituted the foundation of mobile data communica-tions, new technology standards such as Universal Mobile Telecommunication System (UMTS), Long Term Evolution (LTE) or Worldwide Interoperability of Microwave Access (WiMax) have already or will become available (BSI 2008). In addition, the ability of contemporary mobile networks to seamlessly roam between the heterogeneous network technologies (including dedicated Wi-Fi hotspots), will further increase and tighten the nation-wide mobile network cov-erage (Sasikala and Srivatsa 2006).

The geographical location independence of mobile media also implicitly in-cludes time independence. Similar to the fixed Internet, mobile access is avail-able for 24 hours per day, seven days per week. Since mobile users are not bound to geographical locations (e.g. home or Internet cafés), they are able to satisfy immediate needs in their momentary situation (i.e. defined by geographi-cal location and time of day) (Feldmann 2005, p. 78).

2.4.1.2 Interaction with Mobile Devices

Mobile devices exhibit several intrinsic characteristics and conceptual features, which affect their interaction with mobile users and distinctively differentiate the mobile media from its fixed online equivalent:

• Location Independence and Instant Interaction: Due to the compactness and battery-power, unlike the personal computers, mobile devices do not re-quire any specific physical location (e.g. office workspace) to be used (Feldmann 2005, p. 5). This flexibility is supplemented by the absence of boot time for their operating system. Thus, mobile devices can be instantly avail-able in order to satisfy immediate needs of mobile users (Stanoevska-Slabeva 2004).


• Limited Input and Output Capabilities: The compactness of mobile de-vices is bought through a limited or missing keyboard and small display sizes (Love 2005, p. 7 ff.; Mobile Marketing Association 2008). Although, new technologies such as virtual keyboards or augmented reality concepts aim to improve the situation, the user acceptance of mobile services still depends on their ability to satisfy the immediate needs of mobile users (Yom 2002).

• Limited Hardware Performance: The mobility of cellular and smart phones limits their available hardware performance. The main restrictions can be found in the area of battery duration, computing power, data storage capabili-ties, and Internet connection bandwidth (Mahmoud and Yu 2004).

• Personalisation: Unlike the fixed Internet, the core functionality of mobile data communication allows to identify distinctly its mobile users (cp. Section 2.4.1.3). In addition, mobile devices are not exchanged or shared between mobile users, since at least callers expect to reach a specific recipient for a given phone number (Feldmann 2005, p. 61). Furthermore, the access to mo-bile devices and its communication capabilities is generally secured by the Personal Identification Number (PIN). Thus, mobile service providers inter-acting with mobile users can generally expect to communicate with the owner of a mobile device (Feldmann 2005, p. 57).

2.4.1.3 Availability of Context Information

The fixed Internet predominantly allows acquiring user preferences by the ob-servation of their online behaviour (i.e. visited websites, entered search queries, ordered products, etc.) as well as technical information such as IP-addresses and used operation systems (Hegge 2008, p. 288). Whereas the mobile Internet of-fers similar information, the mobile network in collaboration with mobile de-vices, provides additional types of information about mobile users:

• User Identity: Every mobile device requires a Subscriber Identity Module(SIM), which is located on a removable SIM card. It is used to identify the owner of a mobile device using the mobile network. Each SIM stores an In-ternational Mobile Subscriber Identity (IMSI), which represents a unique number assigned to all GSM or UMTS mobile networks. Therefore, mobile network operators are able to identify distinctly every mobile user once booked into the mobile network. Since this method utilises the core mobile


network functionality, it works for every mobile network and device (Schiller 2003, p. 102).

• Geographical User Location: Mobile networks are compounded of network cells, which are spanned by physical cell towers. Each mobile device booked into the mobile network has to be associated with at least one network cell in order to enable the communication service (Schiller 2003, p. 100 ff.). Mobile network operators are able to acquire the unique ID of the cell in which a mo-bile user is currently booked in with their device. From this ID, the geo-graphical location of the cell tower can be queried. Depending on its specifi-cation, a cell tower can provide network coverage ranging from ca. 100m up to 30 km radius (Schiller 2003, p. 117). Consequently, the actual geographical location of mobile user can only be approximated (Cell-of-Orgin (COO) method). In addition, several more accurate methods such as Time of Arrival (TOA), which measures the signal time difference between cell tower and mobile devices, are available (Bill et al. 2004).

Complementary to these network-based localisation methods, a mobile device can provide location information by itself. Therefore, it has to either be equipped with a Global Positioning System (GPS) or Wi-Fi network device. In the case of a GPS device, a highly accurate localisation based on geo-stationary satellites positioned in space is available. By contrast, a Wi-Fi de-vice scans for Wi-Fi Access Points (WAP) in close vicinity, acquires its unique ID (MAC address20) and attempts to query the corresponding geo-graphical location from a WAP database. Since WAPs have only limited net-work coverage (ca. 30m), they provide medium location accuracy (Albers et al. 2005).

Both network and mobile device-based localisation approaches exhibit their individual advantages and disadvantages. Network-based localisation, such as COO, works for every mobile network and device, but produces often highly inaccurate results. By contrast, GPS or Wi-Fi-based localisation methods re-quire mobile devices to be equipped with the respective technology, but offer more accurate results. In addition, the GPS service is globally available, but

20 Media Access Control (MAC) address represents a worldwide unique number, which iden-

tifies network interface cards or network adapters (IEEE Standards Association 2009).


performs poorly if used indoors. Wi-Fi works well indoors, but requires highly populated areas as in large cities (Bill et al. 2004).

• Time of Day: The determination of the time of day when a mobile user ac-cesses mobile network is trivial and represents a build-in feature of all mobile networks (Robra-Bussantz 2005).

This outlined context information can theoretically be automatically acquired without user interaction (cp. passive online data, Section 2.3.2.1). However, it constitutes explicit data about individual mobile users (actively disclosed profile data, cp. Section 2.3.2.1).

2.4.2 Characteristics of Mobile Marketing

Literature does not provide a consistent definition for the term Mobile Market-ing and it is often synonymously used for Mobile Advertising (Leppäniemi et al. 2006b). Nevertheless, marketing campaigns conducted via the mobile medium allow the implementation of the same marketing policies (4Ps) like fixed online media. In this regard, advertisers are currently focusing on the following Mobile Marketing objectives (Steimel et al. 2008, p. 67; Holland and Bammel 2006, p. 107):

• Improving Sales: Advertisers aim at increasing the sales of their products and services by establishing an additional communication channel to the cus-tomer.

• Improving Brand Awareness: Advertisers aim at increasing the brand awareness in the population as well as extending their services to mobile us-ers.

• Address Generation: Acquisition of postal user home addresses and con-ducting market research via the mobile medium.

In order to provide a consistent definition for the term Mobile Marketing, this thesis adapts the proposal of Leppäniemi et al. (2006b), which is in line with general marketing understanding of this work (cp. Section 2.1.1):

Mobile Marketing is the use of the mobile medium as a means of marketing communications.


Along with this definition, the previously outlined distinctive features of mobile media offer several theoretical advantages for Mobile Marketing campaigns, whose features are depicted in Figure 2.7 and are comprised of two categories: Maximising Reach and Minimising Circulation Waste.

Figure 2.7: Advantages of Mobile Marketing (based on Dufft 2003, p. 12)

• Maximised Reach: By the end of the year 2007, most European regions had exceeded a 100% mobile penetration rate (RNCOS 2008)21. Thereby, theo-retically every citizen in Germany or Europe owned one or more mobile de-vices and thus could be contacted independent from time of day or their geo-graphical location (cp. Section 2.4.1.3). This opportunity is substantiated by the fact that mobile users typically carry their mobile device like keys with them all time whilst having it turned on an average of 14 hours per day (Roesch 2005).

• Minimised Circulation Waste: The availability of context information (cp. Section 2.4.1.3) allows targeting Mobile Marketing campaigns by location, time of day and user identity. Therefore, Mobile Marketing campaigns can be highly personalised to the suit individual needs of mobile users in their mo-mentary usage situation. For instance, advertisers may target certain Mobile Marketing campaigns only those mobile users, which currently reside in close vicinity of their POS (Figge and Albers 2008; Albers 2007).

21 This is based on the ratio of European mobile subscribers to the total of European citizens.

High Interactivity

Location-based

Recipient Addressability

Time Independent

Customer Addressability

Mass Media

Capabilities

Location Independent


Extensive Personalization

Capabilities

Time-based


Maximised Reach

MinimisedCirculation

Waste


2.4.2.1 Targeting and Reach of Mobile Marketing Campaigns

The targeting models for Mobile Marketing campaigns mainly correspond to those of the fixed Internet (Sharma et al. 2008, p. 163 ff.). Nevertheless, for each category of Mobile Marketing campaigns, the opportunity to improve their tar-geting using context information does already exist in practice, but predomi-nantly focuses only on location information about mobile users (Steimel et al. 2008, p. 118):

• Location-based Targeted Mobile Advertisements: Short range of mobile transmission technologies based on standards such as Bluetooth or IrDA, al-low advertisers to target Mobile Marketing campaigns according to a specific geographic location (Birkel 2008, p. 481 f.). For instance, Blue Cell Networksoffers Bluetooth based Mobile Marketing campaigns to be installed in restau-rants or at exhibition booths (Blue Cell Networks 2009).

• Local Search: The geographic location of mobile users can be used to target Mobile Marketing campaigns based on the distance of mobile users to a pro-moted POS. Prominent examples are the mobile local search services Google Maps (Google Corporation 2009e) and Yahoo One Search (Yahoo Corpora-tion 2009b).

• Location-based Mobile Communities: Mobile communities such as Qiro(Qiro GmbH 2009), Loopt (Loopt Corporation 2009) or Gypsii (GyPSii Cor-poration 2009) display only those POS in close vicinity of mobile users on a map.

• Location-based Mobile CRM: This type of Mobile Marketing campaign mostly benefits from the knowledge of the mobile user’s identity and targets their offerings accordingly. The geographic location of mobile users pre-dominantly has to be provided manually (e.g. through postal code entry). An example for such a service illustrates the WAP portal of the automotive fuel provider ARAL (ARAL Corporation 2009), which offers location-based mo-bile services suited to the needs of motorists.

• Identity-based Targeted Mobile Advertisements: Mobile users submit their personal preferences and their consent to receive Mobile Marketing cam-paigns in advance to a Mobile Marketing Provider. Consequently, such a Mo-bile Marketing Provider is at any point in time able to query their database for


the relevant target audience and expose mobile users to corresponding Mobile Marketing campaigns. A prominent example is the Mobile Virtual Network Operator (MVNO) Blyk (Blyk 2009), which offers its subscribers subsidised mobile voice calls, text messages and data communication in exchange for their permission to send SMS-based text advertisements to their phones.

Despite of the outlined potential of using context information for the targeting of Mobile Marketing campaigns, it is currently hardly exploited in practice. Whereas in the past monetary costs were held responsible for this circumstance, today still unsolved legal data protection issues are hindering the increasing ap-plication of this kind of information22 (Steimel et al. 2008, p. 26 f.). Mobile Marketing Providers currently offering access to context information for Mobile Marketing campaigns predominantly utilise only the geographic location of mo-bile users.

In addition to the outlined targeting effectiveness benefits, the mobile medium provides advertisers a theoretically higher reach for Mobile Marketing cam-paigns than fixed traditional and online media (cp. Section 2.4.2.1). However, not every mobile subscriber owns a mobile device, which is technically capable to process every possible Mobile Marketing campaign. Even if the latter is the case, mobile subscribers might refuse actual use of a certain mobile medium (e.g. Mobile TV) or are not aware about the capabilities of their mobile device. Table 2.2 illustrates this circumstance at the example of Germany.

22 This applies besides the fact that not every Mobile Marketing campaign is able to benefit

from context information.


Table 2.2: Technical vs. Actual Reach of Mobile Media in Germany (Steimel et al. 2008, p. 50)

Mobile Advertising

Medium Marketing Instrument

Technical Reach

Reached Consumers

Voice Automated Outbound Call, Voice Card,

Voice Computer, IVRs 100% 100%

SMS / Text PSMS, Short Codes, TV to SMS, WAP

Push Trigger 100% 80%

MMS PMMS, Mobile Content, Mobile Blogging,

Live Caching, Mobile Couponing / Mobile

Ticketing, Object Recognition

80% 30%

Mobile Internet On-Deck / Off-Deck, Banner, Microsites,

Interstituals, Search AdWords 80% 15%

Games / Java In-Game Advertising (static, dynamic),

Ad-Wraps / Applications, Offline Clients 60% / 60% 20% / 10%

Location Based Marketing

LBS, Bluetooth, IR, CLP to Bluetooth,

Virtual Sales Folder 50% 10%

Video, Stream-ing & TV

Mobile Ads, Mobisodes, Sponsoring,

Branded Content 30% 6%

As Table 2.2 shows, mobile media is currently very heterogeneous. Thereby, voice and SMS-text based communications provide the highest reach for Mobile Marketing campaigns. At the same time, the interactivity mobile Internet offers advertisers greatest potential for the effectiveness of Mobile Marketing cam-paigns.

2.4.2.2 Pricing Models for Mobile Media Performance

Pricing or compensation models for mobile media performance offered by Mo-bile Marketing providers are similar to their fixed online equivalents and mainly based on the CPM model (Kishore 2008, p. 14; Michael 2006, p. 177 ff.).

However, context information would allow the pricing of mobile media per-formance based on the relevance of a mobile user to an advertiser. For instance, the price of contacting a mobile user may decrease with their growing distance to a POS (Albers 2007 and 2008). However, Mobile Marketing Providers cur-


rently do not offer this type of pricing models (Albers 2007; Steimel et al. 2008, p. 130).

2.5 Unutilised Potential of Mobile Media for Mobile Marketing

As of today, Mobile Marketing campaigns predominantly benefit from the mo-bile medium as being more personal than any other existing medium (Birkel 2008, p. 482; Mobile Marketing Association 2008, p. 75). This is for the follow-ing reasons:

• Personal Device: The mobile medium allows reaching mobile users via ei-ther voice call or messaging service (i.e. SMS/MMS) on their own dedicated telephone number. The corresponding mobile device is typically not shared with other persons like fixed line connections in households (Feldmann 2005, p. 61; Kishore 2008, p. 20 f.).

• Personal Information Store: Mobile devices increasingly store personal in-formation such as contacts, calendar items, photos or music and have user in-terfaces which can be customised to satisfy the personal needs of its owner (Birkel 2008, p. 482; Feldmann 2005, p. 61).

• High Attention and Involvement: Mobile users are paying high attention to mobile communications. Incoming messages are immediately checked and the information displayed on small screens of mobile devices receives full at-tention (Steimel et al. 2008, p. 60; Mobile Marketing Association 2008).

Besides these intrinsic features of mobile media, predominantly unutilised by Mobile Marketing Providers remains the ability to increase targeting effective-ness of Mobile Marketing campaigns by using available context information about mobile users (cp. Figure 2.8).


Figure 2.8: Utilisation of the distinctive Mobile Media Features for Mobile Marketing Campaigns

Whereas Mobile Marketing campaigns benefit per se from personal characteris-tics (1-3) of the mobile medium, Mobile Marketing Providers have to provide advertisers actively with context information (4) in order to exploit its benefits.

2.5.1 Context Information provided by Mobile Media

The capability of the mobile network allows acquiring real-time information about mobile devices. This context information reflects to some extent the cur-rent usage situation of mobile users and allows Mobile Marketing campaigns to be targeted to the needs of mobile users in their momentary usage situation. Due to unwieldy but limited amount of existing context information, the term contextis defined in the scope of this work and the application of context informationfor Mobile Marketing campaigns is discussed.

The frequently cited work of Dey and Abowd (1999) defines context as “… any information that can be used to characterise the situation of an entity. An entity is a person, place, or object that is considered relevant to the interaction between a user and an application, including the user and applications themselves”.

Along with this definition, Dey and Abowd (1999) introduce a categorisation of context types whilst differentiating between location, time, person and activity. This conglomerate of context types is named as primary context. It provides an-

High Attention and

Interaction

Personal

Device

Personal Characteristics

of Mobile Media

Context Information

Intrinsically

available

To be

activelyutilised

1

2

3

Personal Information

Store

4

Targeting of Mobile

Marketing Campaigns


swers to where, when, who and what questions and acts as indices for deriving the secondary context. If context is integrated into applications, it creates a con-text-sensitive or context-aware system: “A system is context-aware if it uses context to provide relevant information and/or services to the user, where rele-vancy depends on the user’s task” (Dey and Abowd 1999).

In the scope of this work, context information provided by mobile media can be categorised in the four primary context dimensions of Dey and Abowd (1999) as follows:

• Location: The location represents the current geographical location of a mo-bile user. Depending on the used technology, it is represented by either exact GPS coordinates or a roughly estimated location area (Albers et al. 2005).

• Time: The time is respresented by the time of day for a mobile user. In the scope of this work, the Central European Time (CET) is assumed. It provides a common time zone for a majority of the European countries (Time and Date 2009).

• Person: The identity of a person is uniquely represented by the MSISDN of a SIM card, which each mobile device needs in order to connect to the mobile network.

• Activity: The online behaviour of mobile users observed by tracking entered search queries in search engines, filled out web forms, clicked links, etc.) (cp. Section 2.3.2.1).

In order for context information to be applied to the targeting of Mobile Market-ing campaigns, secondary context information has to be derived from the loca-tion, person, time, and activity dimension indices. In this regard, feasible secon-dary context information applicable for Mobile Marketing campaigns is as fol-lows:

• POS Distance (from Location): The geographical location of a mobile user allows determining the distance between them and a potentially promoted POS (Huff 1964).

• Remaining Visiting Time (from Time of Day): This represents the result of the time of day matched with available opening hours of a POS or the office hours / leisure time of a mobile user. This allows delivering Mobile Market-


ing campaigns only if a mobile user actually has to the time to respond to an offering.

• Personal Preferences (from Person): By uniquely identifying a mobile user (person dimension), personal preferences relevant for Mobile Marketing cam-paigns can be queried from a database and associated with that mobile user. For instance, this can comprise information such as socio-demographic data, geographic data (i.e. home residence), and transaction history (Nieschlag et al. 2002, p. 1125 ff.).

• Immediate Need (from Activity): With the knowledge of a mobile user’s ac-tivity or request, the delivery of Mobile Marketing campaigns can be directly attached to these requests. For instance, a mobile user selects a certain cate-gory (e.g. restaurants) or another specific webpage (e.g. home page) in a mo-bile portal, which indicates their wish to visit a restaurant.

In this regard, Figure 2.9 depicts an overview of the context information types considered relevant in the scope of this work for Mobile Marketing campaigns.

Figure 2.9: Primary and Secondary Context Dimensions applied to de-scribe the Usage Situation of Mobile Users

In addition, there are also several other types of primary context information, which are applicable to Mobile Marketing campaigns, but are not addressed

PrimaryContext

Location Identity Time Activity

Sec. Context� Requested

Content

� Demanded

product or

POS

� …

Sec. Context� Opening Hours

� Reachability of

user

� Calendar

Collisions

� …

Sec. Context� Socio-

demographic

data

�Geographic

data

�Transaction

History

� …

Sec. Context�Location of

other mobile

users

�Location of

Point-of-

Interests

� …


within the scope of this work. Representative examples are the mobile device and network context. The former denotes attributes describing device capabili-ties such as battery state and CPU / memory usage. The latter comprises attrib-utes describing network status parameters such as quality of service, link status, bandwidth, and topology (Sharma et al. 2008, p. 272).

Finally, besides outlined dimensions of secondary context information, it is also important to distinguish between the different accessibilities to context informa-tion (Sharma et al. 2008, p. 272 f.; Bulander et al. 2004). In this regard, the pri-vate context is solely under the control of a mobile user (e.g. location informa-tion determined by their mobile device via GPS). By contrast, the public context can theoretically be accessed without explicit consent of mobile users. For in-stance, the access time for a visited or an entered search engine keyword be-comes implicitly available with the service usage.

2.5.2 Integration of Context Information into Mobile Marketing

Campaigns

Although, context information is not suitable or required for every Mobile Mar-keting campaign, it is able to provide the following theoretical benefits for the participants of the idealised mobile media market:

• Mobile Users: Context information allows targeting Mobile Marketing cam-paigns to satisfy an immediate need of mobile users in their current situation. Consequently, the provided offerings or promotions exhibit a higher utility for mobile users (Figge 2007, p. 168) and reduce a potential disturbance of mo-bile users with irrelevant contents (Heinonen and Strandvik 2007).

• Advertisers: Context information about mobile users decreases the uncer-tainty of advertisers about the quality of purchased mobile media performance because it reduces the information asymmetry between both parties (Weiber and Adler 1995). Advertisers are able to evaluate individually the relevance of mobile users (cp. Section 2.4.2) and subsequently satisfy the needs of mobile users in their momentary mobile usage situation. This becomes especially beneficial for advertisers because, according to Zängler (2000, p. 83), the in-tent to consume is the predominant reason for the mobility of individuals. Thereby, context-senstive Mobile Marketing campaigns allow advertisers to promote products, which are typically not purchased online because mobile


users have to be physically present in order to evaluate the product or service first (Michael and Rose 2008, p. 86ff; Figge 2007, p. 158).

• Mobile Marketing Providers: Context information allows Mobile Marketing Providers to differentiate from competition by offering mobile users more relevance and advertisers higher marketing budget efficiency. In this regard, unlike offering traditional mobile media performance, the knowledge about mobile users has to be acquired with great difficulty by competitors to pro-vide context-sensitive mobile media performance. This is the equivalent of switching costs for mobile users (Shapiro and Varian 2006, p. 126 f.; Rose 1998, p. 207). Furthermore, due to targeting capabilities of context-sensitive mobile media performance, it has a higher value for advertisers (Figge et al. 2006). Consequently, Mobile Marketing Providers can attempt to extract a higher willingness-to-pay from advertisers to increase their profits from this offering.

In conclusion, context information provides additional real-time knowledge about mobile users, which can increase the targeting effectiveness of Mobile Marketing campaigns. This helps to bridge the gap between the two extreme in-carnations of Mobile Marketing campaigns. On the one hand, there are tradi-tional Mobile Marketing campaigns, which represent a mere adaption from fixed Online Marketing campaigns. On the other hand, there are Mobile CRM cam-paigns, which are based on an existing business relationship between mobile users and advertisers. Thereby, these campaigns are predominantly founded on comprehensive knowledge about mobile users’ transaction history (Schögel et al. 2008, p. 501).

Figure 2.10 illustrates all three Mobile Marketing campaign incarnations with respect to reach and quantity/quality of mobile user knowledge for targeting purposes.


Figure 2.10: Types of Mobile Marketing Campaigns based on Mobile User Information

Residing on the left are traditional Mobile Marketing campaigns. These offer the highest reach for advertisers to mobile users. Their targeting is based on ob-served online behaviour, which typically applies to large audience groups. Due to their statistical nature, these targeting profiles exhibit only a low information quality (Hegge 2008, p. 290 f.).

Sitting in the middle are context-sensitive Mobile Marketing campaigns. They offer only medium reach because context information allows the targeting of significant smaller audience groups. However, context information can be auto-matically acquired and constitutes explicit information about mobile users at medium quality.

On the right, Mobile CRM campaigns are depicted. These exhibit the lowest reach since they require an existing business relationship to individual mobile users. However, they are founded on highly detailed transaction details about mobile users. Consequently, they exhibit the highest quantity and quality of mo-bile user information (Duncan and Moriarty 1998, p. 8).

TraditionalMobile Marketing

Context-sensitiveMobile Marketing

Mobile CRMServices

Quantity and Quality of Information about Mobile Users

• Typologies

“calculated”• Behavioural data

“likely”

• Transaction

History• Login

“true”

Mobile Marketing Campaigns

• Identity, Location,

Time, Activity: “true”• Personal Preference,

POS Distance,

Opening Hours: “true”, • Current Need “likely”

Potential Reach of Mobile Marketing Campaigns


2.5.3 Special Features of Context Information for Mobile Marketing

Campaigns

Although context information from a technical perspective constitutes solely additional real-time data about mobile users, it has a significant impact on the characteristics of mobile media performance offered by Mobile Marketing Pro-viders.

The interactivity of the Internet fosters the trend of targeting Online Marketing campaigns based on individual user preferences rather than on the media content environment that is accessed by users (Ehrlich 2008, p. 267). Thereby, the inte-gration of context information into Mobile Marketing campaigns intensifies the trend as follows:

For the targeting of traditional Mobile Marketing campaigns, advertisers have the knowledge, which content (e.g. soccer match) is statistically consumed by which audience group (e.g. male, between 25-50 years). Consequently, advertis-ers bundle their Mobile Marketing campaigns with those media contents, which are supposedly consumed by their preferred target group (e.g. males, 25-50 years interested in sports) (cp. Figure 2.11).

Figure 2.11: Targeting of Traditional Mobile Marketing Campaigns

By contrast, for context-sensitive Mobile Marketing campaigns, advertisers are able to target the explicitly described usage situation of mobile users (male, stu-dent, in Frankfurt at lunchtime). Consequently, advertisers may bundle their Mobile Marketing campaign with any mobile media content as long as it is con-

Soccer

Match

Media Content

EnvironmentMobile Users

Males, 25-50 years

(on average)

consumes

Bundling

Mobile Marketing

campaigns with

soccer content

Targeting of Males,

25-50 years interested

in sports

Advertiser


sumed by mobile users, whose current usage situation is relevant to them (cp. Figure 2.12).

Figure 2.12: Targeting of Context-sensitive Mobile Marketing Campaigns

The outlined difference between the targeting of traditional and context-sensitive Mobile Marketing campaigns constitutes the key impact, which context information have on the features of the mobile media performance for advertis-ers. As a result, advertisers acquiring context-sensitive mobile media perform-ance have to respect the following intrinsic characteristics of context informa-tion:

• Availability: The availability of context information for the targeting of Mo-bile Marketing campaigns depends on the capability and willingness of the mobile user to disclose them.

• Explicitity: Contrasting to traditional Mobile Marketing campaigns, context information about mobile users constitutes explicit (i.e. none-statistical) knowledge about the individual usage situation of mobile users.

In this regard, Albers (2007 and 2008) shows that integrating context informa-tion into Mobile Marketing campaigns has impacts on characteristics and com-mercialisation of mobile media performance, which Mobile Marketing Providers need to understand and if applicable also need to address.

In order to explore these impacts, the following section provides a review on related work about the integration context information into Mobile Marketing campaigns as a research foundation.

Mobile UserMobile Usage

Situation

Male, Student,

in Frankfurt at

lunch timeAvailable

Context

Information

Targeting of young males

in Frankfurt at lunchtime

Bundling

Mobile Marketing campaigns

with any content

consumed by males in

Frankfurt at lunchtime

Advertiser


2.6 Related Work on Integrating Context Information into Mobile Marketing Campaigns

The concept of integrating context information about mobile users into Mobile Marketing campaigns or mobile services respectively is not new and has already been addressed in several research publications. Compared to the rest of Mobile Marketing contributions in the field, it only takes an inferior position (Lep-päniemi et al. 2006b). Although, Ranganathan (2002) and Varshney (2002) pro-vide a general overview of the opportunities and challenges of context-sensitive Mobile Marketing, the other workings can be roughly categorised into research regarding design, user acceptance, and economic aspects of context-sensitive Mobile Marketing campaigns.

2.6.1 Design of Context-sensitive Mobile Marketing

A large portion of the contributions on context-sensitive Mobile Marketing cov-ers the development of respective technical architecture frameworks, as well as the prototypical implementations in order to demonstrate their feasibility.

One of the earliest research projects regarding context-sensitive Mobile Market-ing campaigns constitutes the E-LBA (2002) project (European Location Based Advertising). Funded by the European Union (EU), its objectives were to dem-onstrate the feasibility of location-based advertising in three selected major sce-narios (public transport, LBA on mobile devices and advertising in warehouses). Its results contributed to the awareness of technological challenges in the mobile business area, revealed business opportunities for the European industry, and offered insight into the user acceptance of innovative mobile services.

Another project conducted was SmartRotuaari (Ojala et al. 2003), which took the development of mobile services a big step forward. This system features a collection of several functional context-sensitive mobile multimedia services such as service directory, map-based guidance, personal communications and presence, personalised news as well as mobile advertisements. The contribution of the project comprises insight on the technical design, implementation, and integration of multiple mobile services into a single mobile portal. It also pro-vides an extensive quantitative and qualitative empirical evaluation of the pro-ject, which is further addressed in Section 2.6.2.


A different approach to provide context-sensitive Mobile Marketing campaigns took the eNcentive project (Ratsimor et al. 2003). For this, POS (e.g. Cafés) were equipped with transponders, which broadcasted promotions in close vicin-ity to relevant mobile users. Context information, consisting of the mobile user location, naturally resulted from the short-range transponders of the POS. The contribution of this research project was the development of a peer-to-peer Mo-bile Marketing architecture framework eNcentive, which “employs an intelligent marketing scheme by collecting information like sales promotions and dis-counts, and marketing it to other users in the network, thereby deriving benefits when those other users utilize this information” (Ratsimor et al. 2003).

From the developers of SmartRotuaari, also came the B-MAD (Bluetooth Mo-bile Advertising) project (Aalto et al. 2004). Similar to the eNcentive concept, the location of the mobile user could be derived from a short-range transponder in a POS (in this case Bluetooth). However, it does not feature a peer-to-peer application, but sends the mobile user location specifics together with their iden-tity over the mobile network to an information system. Subsequently, the latter delivers advertisements according to the mobile user’s personal interests. The contribution of this project was the development of a device-based localisation mechanism in combination with the mobile Internet based delivery of relevant Mobile Marketing campaigns. This project also comes with an extensive quanti-tative and qualitative empirical evaluation, which is further addressed in Section 2.6.2.

Bulander et al. (2005a) developed the MoMa (Mobile Marketing) application, which allows mobile users to express their immediate needs in their current us-age situation using a mobile web-based category system (e.g. restaurants, phar-macies, etc.). Subsequently, relevant results are personalised based on geo-graphical user location or current time of day. However, the main objective of the project was devoted to develop an information system design, which allows to explicitly maintain the privacy of mobile users.

The Ad-me (Advertising for the Mobile E-commerce user) system developed by Hristrova et al. (2004) functions in a similar fashion as the MoMa system, but shifts its focus on the use of “as much as possible” context information for the personalisation of Mobile Marketing campaigns. In addition, it incorporates the willingness of advertisers to pay for the promotion of the advertisements into the


personalisation process. This allows an advertiser to increase the likelihood of their mobile advertisements to be displayed to a mobile user by choosing to pay a higher tariff than their competitors do.

Kurkovsky et al. (2006) developed the SMMART (System for Mobile Market-ing: Adaptive, PeRsonalized and Targeted) system. This context-sensitive Mobile Marketing application aims at delivering promotions to mobile users targeted to a specific POS while respecting their privacy and preventing unsolicited mes-sages. Based on the geographical location and identity of mobile users, their shopping interests are intelligently matched to the promotion available at a retail site. Therefore, the main scope of the project was on the development of an ef-fective matching algorithm, an appropriate mobile user interface, and a proto-typical implementation of the system in order to demonstrate its feasibility.

Tang et al. (2007) developed a SMS-based platform for location-based text ad-vertisements. The aim of the researchers was to create generic IT-architecture, which supports a whole range of possible Mobile Marketing campaign applica-tions. This was archived by the implementation of a rule repository and respec-tive rule-matching engine, which allows the platform to be customised accord-ing to the individual business requirements of advertisers. Consequently, yet un-known context information can be seamlessly integrated without the need to change the platform.

Finally, Thawani et al. (2007) presented the context-aware timely information delivery service for mobile environments on the example of mobile advertise-ments. For this, the authors developed a modelling concept using event-based scenarios in order to define context-aware domains, which trigger the content delivery. Furthermore, they developed a novel approach for predicting future events to provide a real-time content delivery.

2.6.2 User Acceptance of Context-sensitive Mobile Marketing

Campaigns

User acceptance issues about context-sensitive Mobile Marketing campaigns arise predominantly from potential privacy issues of mobile users, design of user interfaces, and the actual value delivered to the mobile user. Those have been addressed and evaluated in the following publications.


The already previously presented SmartRotuaari project (Ojala et al. 2003) of-fers, besides its application, a complementing evaluation of user acceptance and perceived added value. In this regard, an interesting finding was the fact that it is not sufficient to target mobile advertisements solely based on the geographical location of a POS (Ojala et al. 2003). Instead, advertisers also have to incorpo-rate the personal preferences of mobile users into the targeting models.

The B-MAD as the successor of the SmartRotuaari project (Aalto et al. 2004) also provides an empirical analysis of location-based mobile advertising system. It focused on the technical reliability of the system and the user acceptance for Mobile Marketing campaigns. Although the Bluetooth-based location technol-ogy was found to be not reliable, the mobile user’s attitude towards the service was overall positive. Nevertheless, similar to the SmartRotuaari system, the concept needs to be extended for the targeting of Mobile Marketing campaigns based on personal user preferences as well.

Klafft et al. (2006) conducted an empirical study regarding the acceptance of context-sensitive Mobile Couponing. In an experimental field test, they evalu-ated the redemption of mobile coupons, which have been given to mobile users, in accordance with their distance of a POS. Their findings indicate that mainly young mobile users, whose immediate needs can be addressed by close-by POS, are highly attracted by these kinds of Mobile Marketing campaigns.

Finally, Bruner (2007) has to be mentioned. He conducted an empirical study to measure mobile users’ attitude towards location-based advertising. As a result, he developed an analysis model dedicated to aid academics and practitioners in evaluating different design concepts of Mobile Marketing campaigns.

2.6.3 Mobile Marketing Providers enabling Context-sensitive Mobile

Marketing

Regarding the business model and operated mobile media market platforms of Mobile Marketing Providers enabling Mobile Marketing campaigns, only a few publications so far have been published.

Tripathi (2003) presents decision models for wireless advertising companies op-timising the delivery time of SMS-based promotional text messages. For this, an algorithm for Mobile Marketing Providers was developed. It incorporates time


of day, user location, price of promotional messages and network load into its distribution algorithm.

Gopal and Tripathi (2006) continued and extended the work of Tripathi (2003). They have further analysed the aspects, which have impact on the delivery of SMS-based promotional text messages. Thereby, the user’s mobility, estimated time window for the advertisement delivery, learning about mobile user prefer-ences over time, measurement of advertising effectiveness, network capacity modelling, capacity purchase decisions, availability of location data and real-time processing capacities were identified and discussed. In order to determine the relevance of the distance between a retail store (i.e. POS) and advertising delivery location (i.e. mobile user location), an initial experimental study on the effectiveness of mobile advertising was conducted. Their findings show a sig-nificant correlation of the distance between retail location and point of adver-tisement delivery: A small distance shows a higher likelihood of a mobile user to redeem a provided coupon. It also shows that the characteristics of the coupon itself have to match the personal preferences of a mobile user in order to be of value.

Finally, Figge (2007) extended the traditional business model of mobile network operators offering mobile voice and data communications by developing a mo-bile portal, which features context-sensitive Mobile Marketing campaigns. For this, Figge has developed a corresponding business model framework whilst an-swering the following research questions for mobile network operators:

• How can context information about mobile users be represented in order to be applied to Mobile Marketing campaigns?

• How can a business model be developed to enable context-sensitive Mobile Marketing campaigns based on its traditional equivalent?

• How can a prototypical mobile portal be designed to enable context-sensitive Mobile Marketing campaigns, in order to demonstrate ICT-related feasibility of the business model?

2.7 Summary and Conclusion

This chapter presented state-of-the-art advertising-financed media. Although, traditional media is still dominating the market, media consumers are increas-


ingly shifting their attention towards online media with interactivity as its most distinctive feature.

Online media enables an interactively personalised media consumption for online users as well as the establishment of a bidirectional communication chan-nel for advertisers with those online recipients. Thereby, it enables new targeting models for Online Marketing campaigns and new pricing models for the respec-tive online media performance offered by Online Marketing Providers.

Evolved from online media, mobile media constitutes the latest vehicle for mar-keting campaigns. It offers several distinctive features beneficial to marketing campaigns, but currently advertisers predominantly take advantage of its charac-teristic in being more personal than any other media. However, this intrinsic fea-ture of mobile media does not comprise its full potential. Enriching mobile me-dia performance with context information about mobile users, allows advertisers to target their Mobile Marketing campaigns to the momentary usage situation of individual mobile users. As a result, advertisers are able to increase the effec-tiveness of their Mobile Marketing campaigns and mobile users receive offer-ings more relevant to their immediate needs.

From a technical perspective, this context information can be considered solely as additional data about mobile users. However, with regard to the targeting of Mobile Marketing campaigns, it is able to describe explicitly the individual us-age situation of mobile users. Thereby, its availability to do so depends on the capability and willingness of mobile users to disclose this kind of information. Consequently, Mobile Marketing Providers willing to enrich their mobile media performance with context information have to be aware to potential impacts on its commercialisation and the mean to cope with them.

As the previous section on related work has revealed, the body of literature con-cerned with context-sensitive Mobile Marketing is relatively small compared to the total number of publications on traditional Mobile Marketing (Leppäniemi 2006b). Existing contributions in this field can be roughly categorised as techni-cal design / architectural, user acceptance and economic publications. Thus, lit-erature has mainly focused on concepts and architectures enabling the integra-tion of context information into Mobile Marketing campaigns. Consequently, context-sensitive Mobile Marketing still is a young field (cp. Section 2.4.2) and


the impacts of context information on the traditional commercialisation of mo-bile media performance have hardly been researched.

In order to provide means for Mobile Marketing Providers to address these im-pacts for their mobile media market platform, Chapter 3 develops a conceptional analysis framework to systematically explore relevant impacts of context infor-mation on the traditional commercialisation of mobile media performance in mobile media markets.

Conceptual Analysis Framework for Mobile Attention 57

3 Conceptual Analysis Framework for Mobile Attention

In order to explore the impacts of context information on the traditional com-mercialisation of mobile media performance, a conceptional analysis framework is presented in this chapter. It is supposed to allow a systematic and comprehen-sible analysis approach for this objective.

As foundation for this framework, this work takes a paradigm shift and starts to consider mobile attention rather than mobile media performance as the eco-nomic good traded in mobile media markets. Based on this new perspective, all relevant aspects for the commercialisation of mobile attention are integrated into the conceptional analysis framework.

For this, the first aspect to be addressed, are the characteristics of mobile atten-tion as an economic good (cp. Section 3.1). Furthermore, the mobile attention value chain of a Mobile Marketing Provider is modeled and integrated into the framework (cp. Section 3.2). Finally, Section 3.3 introduces the network eco-nomics discipline, which allows the description of the basic structure of mobile media markets in the form of two-sided network markets. Thereby, as last framework component, it allows analysing the impacts of context information on the structure and the functioning of a mobile media market market as a whole.

3.1 Attention as an Economic Good in Mobile Media Markets

Driven by increasing information overflow, mobile users are confronted with a growing number of brands, products, and ultimately marketing campaigns. From an economic point-of-view, information is no longer a scarce resource in media markets. Instead, the potential attention23 of individuals, which is paid by online consumers to marketing campaigns, becomes the valuable and critical good for advertisers (Goldhaber 1997a).

The ability of advertisers to capture this attention for their marketing campaigns significantly depends on the relevance of a promoted product or service for the targeted audience group. The foundation of this targeting activity constitutes the

23 Potential attention is referred to as attention throughout the remainder of this work.


knowledge of the personal preferences of individuals, who are supposed to pay attention to marketing campaigns (Nieschlag et al. 2002, p. 1064 ff.). In tradi-tional Mobile Marketing campaigns, this knowledge is predominately consti-tuted by statistically aggregated data, which applies to large audience groups (cp. Section 2.5.2). By contrast, the availability of context information allows the targeting of Mobile Marketing campaigns to significantly smaller, explicitly described audience segments (cp. Section 2.5.2).

By considering mobile attention as a scarce resource in mobile media markets and context information as the basis for individual targeted Mobile Marketing campaigns, this work takes a paradigm shift at this point. From now on, it con-siders mobile attention as the economic good traded in mobile media markets. This leads to the following benefits for the exploration and analysis of the im-pacts of context information on the commercialisation of mobile media perform-ance:

• Complexity: The characteristics of mobile media performance (i.e. provision of mobile advertising space), which enables Mobile Marketing campaigns are very complex. There is an unwieldy number of mobile advertising space char-acteristics (e.g. with position and size on a mobile webpage). Thus, analysing mobile attention rather than mobile advertising space or mobile media per-formance respectively, allows separation from all the implementation details of Mobile Marketing campaigns as well as its underlying mobile advertising space.

• Value Creation Process: Considering mobile attention as economic good allows describing its value creation process as a linear value chain. Thus, in a two-side mobile media market, mobile attention is acquired on the content market (procurement), transformed into a tradable economic good (produc-tion) and sold on the advertisement market (sale & distribution).

• Separation: The analysis of context information in order to acquire new knowledge in the sense of Hevner et al. (2004) requires the separation from the technological, legal and market snapshots of the present, since they are subject to rapid change. Consequently, considering mobile attention as eco-nomic good satisfies this requirement.


3.1.1 The Attention Economy

What constitutes attention in an economy? From a psychological perspective Davenport and Beck (Davenport and Beck 2001, p. 25) define attention as the “selective, cognitive process through which we absorb selected information” whereas the actual process of getting attention is described in three steps. At first, there is awareness as the current general mental dedication towards items. This leads to a narrowing phase, in which a person begins to pay attention to a particular item. In the final decision phase, a person chooses to act on their at-tention (cp. Figure 3.1).

Figure 3.1: Model of Attention Process (Davenport and Beck 2001, p. 21)

Nevertheless, in the marketing domain as well as within the attention economy in general, there is no consistent definition for the term attention (Goldhaber 1997a; Ghosh 1997). Consequently, this thesis uses the following working defi-nition for attention as an economic good in mobile media markets:

Attention constitutes an economic good offered by Mobile Mar-keting Providers, which, if purchased, provides advertisers the opportunity to expose mobile users to Mobile Marketing cam-paigns in order to influence their behaviour according to their needs.

The attention economy’s approach of considering attention as a scarce and valu-able economic resource is not a recent one. Already in the pre-Internet era prior to the existence of our information centric society, Herbert Simon (1971) stated: “... in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What in-formation consumes is rather obvious: it consumes the attention of its recipients.

Awareness

Items come into

awareness

Attention

Between the narrowing

phase and the decision phase, attention is paid

to a particular item

Action

Decide

whether or

not to act

Decision

Phase

Narrowing

Phase


Hence a wealth of information creates a poverty of attention and a need to allo-cate that attention efficiently among the overabundance of information sources that might consume it.”

As in recent years, the increasing information overload became an economically relevant problem (Rose 1998, p. 1 f.), analysts from a certain school of business started to address Simon’s early postulated statement under the term attention economy. Although, the attention economy does not represent a proven theory framework (Zerdick et al. 2001, p. 37), it allows analysing the characteristics of mobile attention as an economic good with the scope of this work.

Following the attention economy approach, mobile media markets as a whole can be considered attention markets (Goldhaber 1997a; Sacharin 2001, p. 3).Mobile users are paying attention to offered mobile content provided by Mobile Marketing Providers, which subsequently convert this attention into an eco-nomic good of financial value. It is monetised by selling it to advertisers for conducting Mobile Marketing campaigns (cp. Zerdick et al. 2001, p. 45). Thereby, the key challenge for Mobile Marketing Providers is that mobile users are free to choose on which content they are spending their attention. Therefore, mobile users have to be provided with contents, which are relevant for them (e.g. based on their personal preferences). If it succeeds, mobile users are likely to spend more attention time on content bundled with Mobile Marketing cam-paigns, which increases an advertiser’s opportunity to sell (Iskold 2007).

The ability of Mobile Marketing Providers to offer relevant contents to mobile users strongly relies on the quantity and quality the existing attention data about mobile users. This data reflects what mobile users are interested in and on which things they are typically spending time.

Thereby, this data can exist in either implicit form (passively provided; e.g. by tracking visited mobile websites of mobile users) or explicit form (actively pro-vided; e.g. tracking submitted search queries of mobile users). Ultimately, it needs to be translated into an attention profile, which reflects the personal pref-erences of a mobile user (Iskold 2007).

In order to target Mobile Marketing campaigns to the attention of mobile users, advertisers define targeting profiles, which specify the characteristics of their preferred mobile users. Then, the matching of attention and targeting profiles


allows advertisers to determine which mobile users are relevant and thereby ex-posed to Mobile Marketing campaigns (cp. Figure 3.2).

Figure 3.2: The Relation of Attention Data, Attention Profiles and Target-ing Profiles for Mobile Marketing Campaigns

The significance of targeting Mobile Marketing campaigns based on attention data of mobile users is underlined by the fact that attention data is more valuable than any other information in today’s information economy (e.g. product infor-mation). However, the challenge remains to collect as much relevant attention data as possible whilst respecting the privacy of mobile users (Lai et al. 2005; Kobsa 2001; Ehrlich 2008).

3.1.2 Tradability of Mobile Attention

For mobile attention to be considered as tradable good in mobile media markets, three basic economic conditions have to apply. Mobile attention has to be scarce, measurable and transferable (Davenport and Beck 2001, p. 9). The ful-filment of these requirements is outlined as follows:

• Scarcity: In today’s information society, information is no longer a scarce good. At least with the emergence and commercialisation of the Internet, digi-tal information has become easily accessible and replicable at a very low price or even free of charge (Goldhaber 1997a). At the same time, it becomes

Targeted

Mobile Users

For Mobile

Marketing

Campaign

Attention Profile Preferences

of Mobile

UsersImplicit

Attention Data

Explicit

Attention Data

describes

Targeting Profile

Preferred

Attention Data

for Mobile

Marketing

Campaign

describes

Attention of

relevant Mobile

Users to be

exposed to

Mobile Marketing

Campaigns

matching


harder for advertisers to capture the attention of mobile users for the market-ing campaigns in a world of information overflow. In contrast to mobile atten-tion, mobile advertising space is almost indispensably available. Conse-quently, mobile websites attracting much attention become very valuable and are more difficult to find (Sacharin 2001, p. 3).

• Measurability: Depending on the applied types of Mobile Marketing cam-paigns, several metrics are in place to measure the (potential) attention of mo-bile users paid to advertisements. For instance, the mobile Internet as an in-teractive medium offers the direct measurement of attention by tracking the click-streams of mobile users on websites (Thomas 2008). Nevertheless, the actual attention of mobile users can only indirectly and inaccurately be meas-ured since there is no metric for attention in existence (Goldhaber 1997a; Ghosh 1997). Consequently, mobile attention can only be measured if a Mo-bile Marketing campaign was able to induce some user action such as a prod-uct purchase or visiting an advertised mobile website. Metrics such as the brand awareness generated by a Mobile Marketing campaign cannot be di-rectly acquired via the mobile media (Thomas 2008).

• Transferability: Ownership rights of an economic good needs to be ex-changeable between different parties (Hill 1999, p. 427). Mobile attention in mobile media markets is acquired by Mobile Marketing Providers and sold to advertisers as media mobile performance. By bundling provided content with Mobile Marketing campaigns, Mobile Marketing Providers are conditionally able to transfer this attention to advertisers.

3.1.3 Nature and Characteristics of Mobile Attention

Research in the field of the digital economy shows how the characteristics of economic goods can significantly determine the requirements for the design of market transactions. A prominent example represents the pricing of physical vs. digital goods. Whereas physical goods have constant production and reproduc-tion costs, digital goods such as information are expensive to produce, but cheap to reproduce (first copy costs paradigm). These different cost structures have to be reflected in varying respective pricing models for these goods (Shapiro and Varian 2006, p. 20 ff.), which ultimately leads to different designs for market transactions (Hill 1999, p. 427). Consequently, the understanding of the charac-


teristics of mobile attention as an economic good in mobile media markets lays the foundation for the analysis of the impacts of context information on its tradi-tional commercialisation24.

At first, the nature of mobile attention as an economic good in mobile media markets can be characterised by its very difference compared to other goods. According to Goldhaber (1997b) independent from its nature, attention cannot be manufactured like traditional goods (e.g. software) or bartered for something else. Thus, attention is no commodity – otherwise it could be bought on the market.

Further, if attention were considered a resource, it would rise from an audience as its source. By enriching mobile attention with acquired attention data, it be-comes an economic good, which can be commercialised by selling it to advertis-ers. However, this resource cannot be acquired on traditional procurement mar-kets. It has to be attracted by providing relevant entertaining and informative content (Zerdick et al. 2001, p. 51) in order to attract mobile users paying atten-tion. Nevertheless, it also does not represent a currency because two of the con-stituting features of currencies are to be interchangeable and purpose neutral (Goldhaber 1997b). Since this mobile attention is attached to a mobile user with individual preferences who is paying attention, it is not interchangeable and not purpose neutral for advertisers (Goldhaber 1997b).

Furthermore, mobile attention obviously represents no physical good since these are tangible, material objects. This leaves attention to the category of intangible goods, which have no physical dimension and can be further divided into digital goods (e.g. software or information) and those that can be digitally represented (e.g. property rights or patents) (Hill 1999, p. 440). Thus, mobile attention is re-lated to the class of digital represented goods because it cannot be stored or re-produced like pure digital goods (Goldhaber 1997b). However, it can be indi-rectly digitally represented in the form of mobile attention profiles and trans-ferred from Mobile Marketing Providers to advertisers through the provision of mobile advertising space or mobile media performance respectively.

24 The characteristics of attention also apply to other types of media markets (e.g. online me-

dia) but are in the following solely discussed in the context of mobile media.


Finally, by considering mobile attention as an intangible, non-digital good, the characteristics of market transactions of this good can be further analysed. As already mentioned, the attention economy provides no proven, underlying the-ory framework in order to capture transactions for attention in media markets. Therefore, a concept generally addressing intangible goods has been used for this discussion.

In this regard, a literature review revealed the framework of Choi et al. (1997), which is concerned with intangible goods, but investigates solely digital goods. Koppius (1999) broadened this framework to be applicable to intangible goods in general. In his model, he applies a simplified market transaction described by a buyer, a seller, as well as a delivery process as the most relevant components to outline the characteristics of intangible goods. Figure 3.3 depicts the corre-sponding framework adapted for mobile attention as an intangible, non-digital good.

Figure 3.3: Characteristics of Mobile Attention as an Economic Good in Mobile Media Markets (based on Koppius 1999)

Under the assumption that Mobile Marketing Providers have already acquired the attention from mobile users and are ready to sell it, the characteristics of mobile attention can be described based on of Koppius (1999) as follows:

Buyer-related Dimensions (Advertiser):

• Value Determination: Intangible goods exhibit two characteristics, which complicate their value determination. First, the value of intangibles can often

Mobile Marketing Provider

DeliverySpecificity

Customisability

Substitutability

Intensity of Use

Existence of a Tangible Equivalent

Options for Tangible Support

Transfer Mode

Advertiser

Value Determination

Perishability

Recipient

Externalities

Complexity of Product Use


only be derived from an underlying product (e.g. patent). Secondly, the tradi-tional economics of production (e.g. marginal costs concept) no longer ap-plies if the good can be digitised. Therefore, Koppius (1999) proposes the dif-ferentiation between search and experience goods. The quality of search goods can be inspected prior to the purchase (e.g. price) whereas the quality of goods with experience qualities can only be determined after the purchase or consumption (e.g. information goods such as books or papers). Further-more, this classic categorisation of goods was extended by Darby and Karmi (1973) with credence goods. The value of such goods cannot be determined at all – even after consumption or purchase (e.g. consultancy).

The value of mobile attention for advertisers is determined by its relevance for a Mobile Marketing campaign. Advertisers determine this relevance by matching attention profiles of mobile users with the respective targeting pro-file of a Mobile Marketing campaign (cp. Nieschlag et al. 2002, p. 1061). Fur-thermore, the value of mobile attention depends on the number of advertisers it was sold to at the same time. Theoretically, mobile attention could be split up into infinite units and used by multiple advertisers. However, the value of this attention decreases with each additional sold unit because mobile users have only a limited capability of apprehending the provided Mobile Market-ing campaigns25.

• Perishability: Value of a good decreasing over time is considered as perish-able.

Mobile attention as well as attention in general cannot be stored. Conse-quently, the value of mobile attention perishes immediately if not applied di-rectly to Mobile Marketing campaigns.

• Who or what is the direct Recipient?: This dimension is concerned with the question what type of recipient an intangible good has. This can be either per-sons (e.g. editorial content) or business services (e.g. insurance).

Advertisers are recipients of mobile attention. They expose it to Mobile Mar-keting campaigns. However, if following Simon (1971), who states that in-formation consumes attention, one could also consider the contents of Mobile

25 For example, a webpage overloaded with online banners would be of no value to both mo-

bile users and advertisers.


Marketing campaigns as information and thereby as the actual recipient of at-tention.

• Complexity of Product Use: This aspect concerns requirements, which are necessary for utilising intangible goods. Whereas consuming music is a trivial task, handling certain software applications often requires training.

The complexity of using attention for marketing purposes is not trivial task. Existing literature shows that merely exposing mobile users to Mobile Mar-keting campaigns is neither efficient nor successful (Steimel et al. 2008, p. 82 ff.). It requires careful media planning as well as the appropriate design of the Mobile Marketing campaigns. Thus, advertisers often outsource these tasks to specialised media or advertisement agencies (Bogs 2001, p. 45 ff.), which ul-timately indicates the complexity of using of mobile attention for Mobile Marketing campaigns.

• Externalities: This aspect describes the positive or negative externalities, which occur for intangible goods and potentially increase or decrease the con-sumer value.

As it is going to be outlined in Section 3.3.2, mobile attention in two-sided mobile media markets exhibits indirect cross network externalities. Conse-quently, the higher the number of mobile users paying attention to offered content, the more beneficial it becomes for potential advertisers because the reach of Mobile Marketing campaigns increases, creating more opportunity to generate conversions.

Seller-related dimensions (Mobile Marketing Provider):

• Specificity: Specificity determines how accurately a buyer of a good is able to assess “whether or not a good will satisfy the purpose it is purchased for” (Malone et al. 1987).

Mobile attention in general is not uniformly measurable for a psychological point-of-view (Goldhaber 1997b; Davenport and Beck 2001, p. 34 ff.). How-ever, it can be described using attention profiles of mobile users. Then, adver-tisers are able to select the attention of mobile users, which is relevant for their Mobile Marketing campaign.


• Customisability: Customisability addresses the question how intangible goods can be customised according to the preferences of a buyer.

Mobile attention in itself is not customisable (Goldhaber 1997b). It has to be selected by advertisers based on available attention profiles about mobile us-ers.

• Substitutability: Substitutability describes the extent to which a good can be replaced by another good of the same functionality. Thereby, the highest de-gree of substitutability is offered by commodity goods.

As previously outlined, mobile attention is not uniformly measurable for a psychological point-of-view. However, mobile attention can be described by attention profiles about mobile users. The more accurately an attention profile is able to reflect the personal preferences of a mobile user, the more individ-ual a mobile user becomes, and the less likely their attention can be substi-tuted by a different mobile user.

• Intensity in Use: Intangible goods can be distinguished between single-use (non-durable) and multi-use (durable) ones. A single-use good is say a stock option, which can only be initiated once. Multiple-use goods can be patents, which apply whenever someone other than the owner wants to use an inven-tion protected by this patent (Hill 1999, p. 439).

Mobile attention constitutes a single-use good because it cannot be stored. The attention of individuals perishes immediately when the object of interest is no longer available.

• Existence of a Tangible Equivalent: Intangible goods often have a tangible equivalent (e.g. intangible online newspaper vs. tangible printed newspaper). This aspect is important to consider because the tangible version of a good might increase its value as it provides a reliable physical backup, which may increase the trust individuals have in this good.

As mobile attention cannot be stored respectively, it does not have a tangible equivalent. Only the attention data of mobile users can be stored in an intan-


gible (e.g. database) as well as tangible form (e.g. media data report26), but this does not represent a tangible equivalent.

Delivery-related dimension:

• Transfer Mode: The transfer mode primarily aims at intangible digital goods. The delivery of digital goods can either be accomplished at once (e.g. download) or may require several interactions (e.g. Internet search engine re-sult).

Mobile attention cannot be stored and has to be used at the same time it is ac-quired. Thus, mobile attention is delivered at once by Mobile Marketing Pro-viders to the advertiser.

• Options for Tangible Support: The utilisation of intangible goods always requires tangible support in order for them to have value. For instance, a software application may be delivered electronically or via a physical medium (e.g. DVD).

Tangible support for mobile attention is always required and not optional. Advertisers receive mobile attention through displaying their Mobile Market-ing campaigns on the respective advertising space on mobile websites.

After outlining the characteristics of mobile attention as an economic good, the following section illustrates the main aspects of its value creation process along the classic value chain model.

3.2 Value Chain of Mobile Attention

By considering mobile attention as an economic good in mobile media markets, the respective mobile attention value chain of a Mobile Marketing Provider is analysed. In this value chain, mobile users are considered suppliers of mobile attention, Mobile Marketing Provider are producers converting it into a valuable economic good and advertisers are consumers of mobile attention.

26 Media data reports are issued by media corporations (e.g. Mobile Marketing Providers).

They are supposed to inform advertisers about the reach and types of recipients of their media channels (Bogs 2001, p. 39 ff.).


Based on the simplified model of Porter (1985), the mobile attention value chain comprises procurement, production, and sales & distribution chain links (cp. Figure 3.4). It is connected to the content and advertisement market, which are both operated by the Mobile Marketing Provider (two-sided mobile media mar-ket).

Figure 3.4: Attention Value Chain of Mobile Marketing Providers

Mobile Marketing Providers offering mobile attention to enable Mobile Market-ing campaigns act in two intermediary roles between mobile users and advertis-ers:

• Information Intermediary Role (Rose 1998, p. 188 ff.): Attention data is acquired from mobile users, subsequently compiled to attention profiles, and finally disseminated to advertisers to enable the targeting of Mobile Market-ing campaigns. These three activities are directly related to the respective links of the mobile attention value chain.

• Match Maker Intermediary Role (Rose 1998, p. 69): The attention of mo-bile users is matched to relevant advertisers on the mobile media market. This role assumes that mobile attention as an economic good already exists. It becomes relevant in the sales & distribution link of the mobile attention value chain.

Customer(Advertiser)

Supplier(Mobile User)

Mobile Attention Value Chain

Advertisement

MarketContent

Market

Mobile Marketing

Provider

Procurement ProductionSales &

Distribution

• Acquisition of

Mobile Attention • Acquisition of

Attention Data

• Generation of

Attention Profiles• Enriching

Attention with

Profiles

• Sale of Attention

• Delivery of MobileMarketing

Campaigns


Along with these intermediary roles of a Mobile Marketing Provider, the charac-teristics of each value chain link are further elaborated in the following sections.

3.2.1 Procurement of Mobile Attention

The first activity in the mobile attention value chain constitutes the procurement of mobile attention from mobile users. In general, mobile attention in media markets cannot be acquired directly like physical goods on procurement markets (e.g. oil, steel, etc.). Mobile users freely choose which media content provides the highest value in satisfying their informative or entertaining needs (Kaspar 2006, p. 158). In exchange, they are paying their attention to Mobile Marketing campaigns bundled to this media content.

In order to enable effective Mobile Marketing campaigns, Mobile Marketing Providers have to acquire attention data about mobile users (cp. Section 3.1). Aggregated to attention profiles, this data allows deriving the personal prefer-ences of mobile users and enables the targeting of Mobile Marketing campaigns for advertisers. In this regard, Rose (1998, p. 22 ff.) presents relevant data acqui-sition aspects, which also apply for Mobile Marketing Providers, as information intermediaries:

• Type of Attention Data Acquisition: Mobile attention data either can ac-tively or passively be acquired. Passive acquisition means that Mobile Mar-keting Providers observe the online behaviour of mobile users on their mobile websites (e.g. followed website links). By contrast, active acquisition means that mobile users actively provide attention data when using a mobile website (e.g. entered search query).

• Attention Data Acquisition Costs: Attention data acquisition costs signifi-cantly depend on the type of attention data acquisition. Mobile users typically demand monetary or incentives in exchange for actively providing attention data (Awad and Krishnan 2006), which may cause significant costs. By con-trast, passively observing the online behaviour of mobile users generates fewer costs since no user interaction is required.

Furthermore, Rose (1998, p. 26 ff.) discusses the credibility of information as well as the trust in the information source. Those aspects can be directly related to the quality of attention data. In this regard, Wang and Strong (1996) provide


one of the most comprehensive, but generic frameworks on the meaning of data quality for its consumers (cp. Figure 3.5)

Figure 3.5: Data Quality Framework (Wang and Strong 1996)

However, this framework mainly applies to traditional attention data, which is statistically evaluated to generate the respective attention profiles. Nevertheless, Buchholz et al. (2003, p. 5 ff.) provide a quality of context framework, which exclusively covers the data quality aspects mainly relevant for context informa-tion: Precision, Probability of Correctness, Trust-worthiness, Resolution, and Up-to-dateness. It is applied in Section 4.3.1.

3.2.2 Production of Mobile Attention as a Tradable Good

In order for acquired mobile attention to become an economic good tradable in mobile media markets, Mobile Marketing Providers have to provide a descrip-tion based on acquired mobile attention data. Since attention data does not di-rectly represent the personal preferences of mobile users (e.g. observed online behaviour), the different types of attention data about mobile users have to be translated into a mobile attention profile. This enables advertisers to target their Mobile Marketing campaigns by matching it with their respective targeting pro-file.

DataQuality

Intrinsic Contextual Representional Accessability

� Accessability

� Access

Security

� Interpretability

� Ease of

Understanding

� Representational

Consistency

� Concise

representation

�Value-added

� Relevancy

� Timelineness

� Completeness

� Appropriate

amount of data

� Believability

� Accuracy

� Objectivity

� Reputation


Regarding the generation of a mobile attention profile generation, Rose (1998, p. 171 f.) differentiates between the following forms of information processing for information intermediaries:

• Synthetic Processing: Bundling of information from different heterogeneous information sources, which includes the elimination of duplicate information.

• Synoptic Processing: Categorisation, selection or rearrangement of informa-tion in accordance with specified criteria.

• Analytic Processing: Condensation, valuation, and critical judgement of available information. This results in a new information product, which does not only reproduce existing information, but also estimates the quality of in-formation.

Depending on the Mobile Marketing campaigns supported by Mobile Marketing Providers, any of these three forms of information processing is feasible for the generation of mobile attention profiles (cp. Section 2.4.2.1).

3.2.3 Sales and Distribution of Mobile Attention

Finally, mobile attention as a tradable economic good is sold and distributed to advertisers on the mobile media market (advertisement market side) of a Mobile Marketing Provider. This market transaction “corresponds to a finite number of interaction processes between market participants in various roles. Its goal is to initiate, arrange, and complete a contractual agreement for exchange of goods and services in the most efficient manner. The involved interaction processes can be grouped into classes and form the phases of a market transaction” (Schmid and Lindemann 1998).

By following Schmid and Lindemann (1998), mobile media markets can be con-sidered as electronic markets since at least one of its transaction phases is sup-ported electronically. This allows describing market transactions for mobile at-tention along the model of Schmid and Lindemann (1998), who subdivide them into the information, agreement, and settlement phases (cp. Figure 3.6).


Figure 3.6: Phases of Transactions managed and executed by Intermedi-aries (based on Schmid and Lindemann 1998 and Rose 1998, p. 179 ff.)

For each of these transaction phases, Rose (1998, p. 179 ff.) as well as Schmid and Lindemann (1998) highlighted the aspects, which an intermediary in the role of an electronic market operator can support:

• Information Phase: In the information phase, buyers and sellers acquire knowledge about the general business environment, market partners as well as available goods and services. The phase ends with a submission of an offer for a good or service and consecutively starts the agreement phase (Schmid and Lindemann 1998).

Thereby, goods in electronic markets have to be distinctly identifiable, which requires a common language or semantic basis respectively (Schmid 1999, p. 10). Consequently, goods and services have to be described by means of elec-tronic media covering all relevant characteristics. Therefore, several descrip-tion approaches can be distinguished: Informal (e.g. individual description of product characteristics), semiformal (e.g. based on a set of predefined charac-teristics) and formal (e.g. using a formal language) (Rose 1998, p. 182).

Information Phase

Agreement Phase

Offers

End of Transaction

Contract

Settlement Phase

Advertiser

(Buyer)

Mobile Marketing

Provider (Seller)

• Product Description• Standards

• Language

• Protocols

• Description

• Standard Contracts• Negotiation Infrastructure

• Auctions

• ...

• Logistic f lows• Delivery of Product

• Financial flow

• Information flow


Mobile Marketing Providers offer this product description through the provi-sion of mobile attention profiles (cp. Section 3.2.2). Depending on the type of Mobile Marketing campaign, different product description approaches may apply. For instance, mobile attention profiles applied in mobile display adver-tising campaigns are predominantly described on a semi-formal basis. By contrast, mobile attention profiles for SMS-based mobile text-promotions are typically formally described since they are automatically processed for the targeting of the campaign (Steimel et al. 2008).

• Agreement Phase: In the agreement phase, the conditions of the transaction are negotiated. This most importantly concerns the price fixing process, which is supposed to leads to a legally binding contract (Schmid and Linde-mann 1998). This phase can be supported by an intermediary in offering stan-dardised contracts, negotiation on behalf of the transaction partners or by the provision of an electronic negotiation infrastructure (e.g. for auctions).

For Mobile Marketing Providers, the focus of this phase is on the price fixing process. For this, they are offering mobile attention predominantly based on static pricing mechanisms (i.e. CPM) and dynamic, interactive pricing (i.e. auction models) (cp. Section 2.4.2.2).

• Settlement Phase: In the settlement phase, the terms of the closed contract are fulfilled. This concerns the logistic (i.e. delivery of product), financial and information flows. Thereby, electronic goods may be delivered via electronic networks such as the Internet, whereas physical goods require a different dis-tribution channel. Financial flows can be executed electronically. In this re-gard, an intermediary can manage and fulfil all these coordination processes between sellers and buyers (Rose 1998, p. 183).

Once purchased, mobile attention is delivered to advertisers by displaying their respective Mobile Marketing campaigns on the mobile website, provided by the Mobile Marketing Provider. Advertisers become informed by Mobile Marketing Providers about the performance of the campaign (e.g. received clicks on a mobile advertisement) and are charged based on the agreed com-pensation model (Steimel et al. 2008, p. 60).


3.3 Mobile Media Markets in the Economics of Networks

Finally, the impacts of context information are analysed based on the theory of network economics from a two-sided market perspective.

3.3.1 Introduction to Two-Sided Markets

Markets can be understood as an abstract place where supply and demand for goods meets and exchange processes between buyers and sellers are enabled (Picot et al. 2003, p. 338). Thereby, markets can either evolve over time or are designed by market engineers (Holtmann 2004, p. 22 f.). The latter types are based on formal rules as well as standards for a specific purpose and are referred to as organised markets. While the former types presented are self-organised27, organised markets require a market operator, which enables and monitors the transactions on the market (Weinhardt et al. 2003; Holtmann 2004, p. 22 ff.).

Operators of organised markets often act as intermediaries between sellers and buyers and may provide several economic benefits. On the Internet, information intermediaries play an important role by helping to overcome market imperfec-tions (Rose 1998, p. 51 f.), such as information asymmetries by enabling the matching of appropriate trading partners (Jullien 2004). Furthermore, they can reduce necessary number of interactions between trading partners. The outcome, known as the Baligh/Richartz-Effect (Bogs 2001, p. 79), lowers the necessary contacts from n*m to n+m. They also act as a trust provider between the in-volved parties (Picot e al. 2003, p. 381) whilst offering charging, billing or other logistic functionality necessary for the execution of market transactions (Jullien 2004).

Although, intermediaries cannot be justified in every market to address prevail-ing imperfections such as search costs (Rose 1998), their role becomes a neces-sity in two-sided markets. The intermediary provides services for two (or more) parties in disjunctive markets in order to enable their interaction by bridging possible incompatibilities. These markets are linked by their common pricing structure and the indirect cross-network externalities (Roson 2005a; Jullien

27 For example, the German mobile media market is highly regulated but the market transac-

tions are not organised (Heinemann et al. 2004).


2004). A more formal definition for this two-sided market concept was provided by Roson (2005b):

“Two-sided networks, markets or platforms, are defined as an economic environment in which goods or services are sold to two distinct sets of customers, that benefit from an increase in the number of agents in the other set.“

Typical examples of such markets are credit cards systems, software platforms such as Microsoft Windows or shopping malls (Roson 2005b; Peitz 2005; Jul-lien 2004) as well as advertising-financed media (Anderson and Gabszewicz 2006), which will be covered in more detail later in this section. The general two-sided market is exemplified and outlined in Figure 3.7.

Figure 3.7: Two-sided Market Concept (based on Dewenter 2006)

Although, network externalities have been addressed by academia for a decent period of time (Katz and Shapiro 1985; Arthur 1989; Farrell and Saloner 1986), research on network externalities in two-sided markets is still a young field (Dewenter 2006; Roson 2005a). Nevertheless, several particular characteristics of two-sided markets are already identified and analysed (Rochet and Tirole 2006; Parker and Van Alstyne 2005). In this context, network economic charac-teristics of two-sided markets relevant for analysis of mobile media markets can be summarised as follows:

• Indirect Network Externalities between Markets: Goods or services with network externalities gain utility or value for its users with each additional unit acquired by another user (Shapiro and Varian 2006, p. 13; Katz and

Intermediary

Market 1 Market 2

Indirect

Network Externalities

€€


Shapiro 1985). Thereby, direct network externalities are the result of the im-mediate value created by additional users joining the network (e.g. increasing number of participants of a telephone network). By contrast, indirect network externalities are a secondary result of users adapting a service or good (e.g. cheaper telephones) (Katz and Shapiro 1985). Indirect network externalities can occur in one-sided as well as two-sided markets, but the distinct charac-teristic of two-sided markets is that indirect network externalities occur across both of the markets (Evans 2003). Therefore, the value of the first network is the function of the size of the second network and vice versa.

This can be further illustrated by taking the previously mentioned software platform Microsoft Windows as an example. The first market-side (or net-work) is represented by the users of Windows software applications. This party benefits from a large number of software developers on the second mar-ket-side – given that an increasing number of software developers provide a greater variety of software applications. From the software developers’ per-spective, a large network of users increases the number of potential software application purchases.

• Pricing: One of the key characteristics of two-sided markets is that the de-termination of optimal prices must be balanced between both market sides (Evans 2003). Prices cannot be assigned independently to each market side. This is because the price of one market side has a direct impact on the other market side. Thus, both markets are linked by a common pricing structure and level (Rochet and Tirole 2002). The determination of these prices depends on several aspects such as the price elasticity of a network or its existing network externalities (Roson 2005b). Consequently, this prevents the application of traditional pricing strategies used in ordinary markets (Jullien 2004; Parker and Van Alstyne 2005).

• Interaction Types: An intermediary enables two types of possible interac-tions between the two market sides – each providing value to the network in their own way. The previously illustrated software platform represents a mul-tiple interacting network, which benefits from each possible interaction of us-ers and application developers. Single interacting networks on the other hand, only benefit from a single matching interaction (e.g. real estate or dating agencies) (Poulios 2007; Roson 2005a).


• Two-sided Market Categories: Two-sided markets can be differentiated ac-cording to their purpose. Evans (2003) proposes three categories: Market-makers (1), audience-makers (2) and demand coordinators (3). Market-makers enable the transaction between the networks of the respective market sides (e.g. real estate agencies), audience-makers match advertisers with their po-tential recipients (e.g. TV-stations, Internet Portals) and demand coordinators match goods or services with indirect externalities across two or more net-works (e.g. payment systems or software platforms).

• Market Development: The main characteristic involved in the development of two-sided markets is often referred to as the chicken & egg problem (Parker and Van Alstyne 2005; Caillaudy and Jullien 2001). In order to con-vince potential participants to join one market side, the other side already has to have a critical mass of participants (Shapiro and Varian 2006, p. 14).

Another relevant characteristic of two-sided markets represents the impact of competition between intermediaries on the two-sided markets, especially with regard to the pricing structure (Caillaudy and Jullien 2003; Armstrong 2006). However, this issue is not covered any further since this work assumes a mo-nopoly intermediary (cp. Section 1.4.1).

3.3.2 Two-sided Mobile Media Markets

The model of two-sided markets outlined in the previous chapter can be applied to describe the specific characteristics of the mobile media markets (Anderson and Gabszewicz 2006; Reisinger 2003) on an abstract level28.

In mobile media markets, the intermediary platform is typically represented by Mobile Marketing Providers, which serve two disjunctive markets. Participants on the first market (content market) are mobile users willing to receive informa-tive and/or entertaining contents. In exchange for their mobile attention paid to advertisements bundled with the provisioned contents, they receive this service free of charge or on subsidised basis. On the second market (advertisement mar-ket), advertisers purchase this generated attention of an audience in order to ex-

28 On a more detailed level, mobile media markets may contain more market participants in

order to create value (Steimel et al. 2008, p. 120). However, in the context of this work, this abstraction level of two-sided markets is sufficient in order to address the research ob-jective.


pose it to Mobile Marketing campaigns. Between these two markets, indirect cross-network externalities exist and consequently advertisers benefit from the size of the content market and mobile users vice versa (cp. Figure 3.8).

Figure 3.8: Two-sided Mobile Media Market (based on Dewenter 2006)

The general characteristics of mobile media markets considered relevant within the research scope of this work are outlined along with the previously introduced two-sided market concept:

• Indirect Network Externalities between Markets: On the advertisement market, advertisers benefit from an increasing number of mobile users (con-tent market size) because it increases the reach of their Mobile Marketing campaigns. The content market also benefits from the number of advertisers since it offers a higher variety of Mobile Marketing campaigns for mobile us-ers (advertisement market size).

Although the utility of the advertisement market is always positively corre-lated with the size of the content market (positive network externalities), negative correlations are possible in the opposite direction. The higher the number of advertisers in the advertisement market, the higher the potential number of advertisements to which mobile users may be exposed. This may lead mobile users to reject the provided content as well as to the offered commercials, thereby generating negative network externalities. If the variety of available Mobile Marketing campaigns is used to select the most relevant

Mobile Marketing

Provider

Mobile

UsersAdvertisers

€�

�

�

�

Indirect

Network Externalities


ones for a mobile user, an increasing number of advertisers can also lead to positive network externalities29 (Ferrando et al. 2004; Dewenter 2006).

• Pricing: The balancing of the price structure between the advertisement and content market is predestined. On the content market side, prices are typically lower than on the advertisement market or non-existent at all (Evans 2003). Mobile users receive content predominantly free-of-charge or at a price which is typically below marginal production costs of these contents (Anderson and Gabszewicz 2006). In this regard, the pricing strategy in two-sided markets must not be confused with cross-subsidy of products as known on traditional one-sided markets. Cross-subsidy is of a temporary nature whereas this strat-egy applies permanently (Anderson and Gabszewicz 2006).

• Interaction Types: Although traditional mobile media markets constitute a multiple interacting network, the sophisticated personalisation features result-ing from available context information of mobile media (Stewart and Pavlou 2002) theoretically tends towards a single interacting network such as one-to-one marketing campaigns (Kotler et al. 2001, p. 1203).

• Two-sided Market Categories: Mobile media markets belong to the cate-gory of audience makers. They are matching advertisers to audiences (i.e. mobile users as recipients of Mobile Marketing campaigns) (Evans 2003).

• Market Development: The chicken & egg problem of mobile media markets is typically addressed by attracting mobile users with content whilst subsidis-ing the price of Mobile Marketing campaigns for advertisers until the critical mass of mobile users is reached to get a sufficient number of advertisers on board (cp. Evans 2003).

3.4 Summary

This chapter presented a conceptional framework to be applied to the explora-tion of impacts of context information on the traditional commercialisation of mobile media performance in mobile media markets.

29 For instance, this applies to the AdSense Advertising Network of Google Corporation:

From a pool of available advertisements, only a limited number of relevant advertisments is selected and displayed to the online user (Google Corporation 2009d).


For this, based on the attention economy school, the attention of mobile users rather than mobile media performance has been considered the scarce economic good traded in the mobile media markets. Along this new paradigm, all relevant aspects for the commercialisation of mobile attention as an economic good have been covered by respective concepts, which led to the following three compo-nents of the conceptional analysis framework:

The first framework component covers the nature and characteristics of mobile attention as an economic good in mobile media markets. Based on the model of Koppius (1999), its characteristics as an intangible, non-digital good have been outlined.

The second framework component is concerned with the value creation process of mobile attention. Thereby, the role of a Mobile Marketing Provider can be analysed from two perspectives along the value chain. First, this role constitutes the information intermediary, which acquires mobile attention about mobile us-ers, compiles it to attention profiles, and finally disseminates it to the respective advertisers. Secondly, Mobile Marketing Providers act in the matchmaker in-termediary role. This enables and supports market transactions for mobile atten-tion from Mobile Marketing Providers to advertisers.

Finally, the third framework component constitutes the consideration of mobile media markets as two-sided markets based on the theory of network economics. This allows analysing the impact of applying context information on the main functioning and behaviour of an entire mobile media market.

This outlined conceptional analysis framework is applied in the following chap-ter in order to systematically explore and analyse the impacts of context infor-mation on the traditional commercialisation of mobile attention as an economic good in mobile media markets.

Impacts of Context Information on Mobile Attention 83

4 Impacts of Context Information on Mobile Attention

Due to the specific characteristics of context information in the role as market-ing-related knowledge about mobile users (cp. Section 2.5.3), Mobile Marketing Providers willing to enable context-sensitive Mobile Marketing campaigns are supposed to experience impacts on the traditional commercialisation of the re-spective context-sensitive mobile attention30.

Based on the special characteristics of context information and the developed conceptional analysis framework (cp. Chapter 3), this chapter presents the ex-ploration of relevant impacts of context information. In the sense of Gregor (2006), the result constitutes an analysis theory, which subsequently lays the foundation for the development of the IT artifact in the form of an engineering recommendation framework for mobile media market platforms offering con-text-sensitive mobile attention.

At first, Section 4.1 defines the application scope of mobile attention for Mobile Marketing campaigns in order to outline the focus of this analysis. Subse-quently, Section 4.2 presents the analysis of the characteristics of context-sensitive mobile attention as an economic good traded in mobile media markets. Subsequently, Section 4.3 continues to outline the explored the impacts of con-text information on the Mobile Marketing Provider value chain. Finally, Section 4.4 shows the analysis of the impacts of context-sensitive mobile attention in mobile media markets from the network economics perspective.

After the discussion of the analysis results, Section 4.5 discloses the limitations of the exploration and the analysis process whereas Section 4.6 summarises and concludes the chapter.

4.1 Analysis Scope

The plethora of existing Mobile Marketing campaigns, for which context-sensitive mobile attention could be applied, represents an unwieldy analysis en-vironment in the context of this work. Although, mobile attention is defined and considered independent from concrete Mobile Marketing campaign implementa-

30 Context-sensitive mobile attention denotes mobile attention enriched or described with

context information.


tions, still some aspects (e.g. available context information, mobile medium, etc.) affect the characteristics of mobile attention. Consequently, the following section is going to narrow the potential analysis scope down to the current most prospective Mobile Marketing campaigns for context-sensitive mobile attention.

4.1.1 Mobile Medium

The most fundamental enabler of Mobile Marketing campaigns is the mobile medium as the communication channel between advertisers and mobile users. The mobile medium features several types of data communication technologies as well as terminal devices (cp. Figure 4.1) whose combination may lead to sig-nificantly different user experiences and respective application scenarios (cp. Section 2.4.1).

Figure 4.1: Data Communication Technologies and Terminal Devices of the Mobile Medium

Since implementations of Mobile Marketing campaigns are expected to ap-proach those of the fixed Internet (Strategy Analytics 2007), the mobile Internet(e.g. based on GSM or UMTS) represents the underlying mobile medium in the context of this work. Furthermore, it is assumed that this communication chan-nel is exclusively provided by mobile network operators.

The access to the mobile Internet requires a terminal device. While as for the fixed Internet this device is typically represented by personal computers (PCs) and notebooks, the mobile Internet is predominantly accessed via cellular or smart phones and notebooks (Feldmann 2005, p. 5 f.). However, notebooks are

Mobile

Medium

Mobile Data

Communication

Technologies

Terminal Devices

• Desktop Computer

• Notebook

• Cellular Phone

• Smart Phone

• …

• SMS / MMS

• Bluetooth

• Wi-Fi

• WAP Push

• GPRS, UMTS


not considered to exhibit the characteristics and benefits of personal devices. They have only limited mobility compared to cellular or smart phones and do not have other distinct features as outlined in Section 2.4.1. Consequently, cellu-lar or smart phones31 represent the mobile devices in the context of this work. They are not shared with others persons, are always brought along, have instant available functionality (no boot-time) and their functioning does not require spe-cial location32.

4.1.2 Traditional and Context-sensitive Mobile Attention

In order to explore the impacts of context information on mobile attention, tradi-tional and context-sensitive mobile attention are going to be compared based on the previously developed conceptional analysis framework. This involves ex-plicitly outlining the differences of these mobile attention types, which solely originate from the kind of available attention data:

• Traditional mobile attention is solely described by personal preferences of a mobile audience, which have been acquired by observing and classifying the online behaviour of mobile users (e.g. deriving personal preferences from visited mobile content on using statistical methods). Thereby, the corre-sponding traditional attention profile typically describes or fits to a large number of recipients.

• Context-sensitive mobile attention is solely described by context information explicitly disclosed by mobile users. Primary context information comprises identity, location, time of day and activity of mobile users and is provided by the mobile network. Secondary context information, which is considered relevant due to its existing application in practice (cp. Section 2.4.2.1), is rep-resented by the personal profile, POS distance, remaining visiting time and immediate need of a mobile user (cp. Section 2.5.1). Thereby, the corre-sponding context-sensitive attention profile typically describes an individual mobile user.

31 Whilst mobile phones typically provide basic voice and data communication services,

smart phones are offering advanced capabilities, which can be compared to PC functional-ity (Feldmann 2005, p. 55ff.).

32 For instance, notebooks are not typically used by persons walking through a pedestrian precinct.


4.1.3 Mobile Marketing Campaigns

The current available Mobile Marketing campaigns can be roughly classified in the following categories (Steimel et al. 2008, p. 79 ff.):

• Direct Media Response Marketing: Advertisers initiate the contact to a mo-bile user via another non-mobile medium (e.g. TV, radio, mailings). Mobile users can respond to these offerings by utilising various mobile communica-tion means such as SMS-based text messages.

• Mobile Permission: Advertisers acquire the permission of mobile users to contact them about Mobile Marketing campaigns. Their personal preferences are kept in databases from which relevant mobile users are queried on demand in relation to a Mobile Marketing campaign.

• Mobile Advertising: Mobile Advertising denotes the promotion of commer-cial messages through various forms of mobile advertising space on mobile websites. Mobile users can directly respond to this offering on the same me-dium.

• Mobile CRM: Whereas the previous three categories of Mobile Marketing campaigns are conducted on demand, Mobile Customer Relationship Man-agement (mCRM) is based on continuous highly personalised marketing measures. It requires an existing business relationship between advertiser and mobile user, and implies that advertisers do not have to compete on mobile advertising spaces for the attention of their mobile users, since they already own them for these marketing measures.

Figure 4.2 depicts an overview of the existing outlined Mobile Marketing cam-paigns in practice.


Figure 4.2: Overview of Mobile Marketing Activities at Present (Steimel et al. 2008, p. 79)

Although, Mobile Marketing campaigns expenditures in Europe are still low compared to their fixed online equivalents, Mobile Advertising as a subset of Mobile Marketing is currently the fastest growing marketing means (Strategy Analytics 2007; Kishore 2008, p. 46 f.). Mobile Advertising campaigns in prac-tice are predominantly based on mobile service technologies such as SMS or MMS. However, the increasing success of the mobile Internet shifts the focus of Mobile Advertising towards the mobile web-based campaigns. Thereby, the mobile media market situation approaches that of the fixed Internet with web-based display advertising (banners) as dominant marketing measure (cp. Figure 4.3).

Mobile

Marketing

Mobile Direct

Response MarketingMobile Permission Mobile Advertising Mobile CRM

• Infoservices

• Product Support

• Order Service

• Notification Service

• …

CONTEXT-PULL• On/Off Portal

• Client/Apps

• Idle Screen

• Games

• Radio, TV

• Music, Video

• Podcasts

• RSS feeds

PUSH• SMS / MMS

• Bluetooth

• VoiceCard

• Mobile Couponing

• …

PULL• SMS / MMS

• Bluetooth

• VoiceCard

• Mobile Couponing

• …

Campaign-driven continuously


Figure 4.3: Development of Mobile Advertising Revenues in Western Europe (based on Strategy Analytics 2007)

Consequently, the analysis of context information focuses on mobile attention applied to display-based Mobile Advertising campaigns, which currently repre-sent the most prospective type Mobile Marketing campaigns.

4.1.4 Players in Mobile Media Markets

In contrast to the idealised triangle structure of media markets (cp. Section 2.1.2), the provision of Mobile Marketing campaigns in practice requires the collaboration of several market players along the value chain in the mobile eco-system (cp. Figure 4.4).

1.075

0

500

1.000

1.500

2.000

2.500

155

2.184

Banner

2011

284

Video/TV

In-Application

Mobile Advertising

Revenues in

Western Europe (in Mio. €)

619 Search

2007

Text/MMS

+100%

+169%

+109%

+17%

+226%

+94%Total

Yearly average

growth rate

2007 - 2011


Figure 4.4: Mobile Marketing Value Chain and participating Market Players (based on Steimel et al. 2008, p. 120)33

The foundation of this Mobile Marketing value chain represents the infrastruc-ture equipment vendors, device manufacturers, as well as core access players, which together enable the current mobile data communications. Based on this communication layer, portal players attract mobile users with content delivered by content providers / aggregators. The acquired mobile attention of users is subsequently exposed to Mobile Marketing campaigns developed by wireless application providers and multimedia agencies. Finally, potentially initiated pur-chases of mobile users can be supported by mobile payment services (Steimel et al. 2008, p. 120 ff.).

For the provision of Mobile Marketing campaigns, these organisations form a value network. However, this work focuses on the analysis of transactions for mobile attention between mobile users and advertisers, which are enabled by Mobile Marketing Providers. Since other organisations are not directly affected

33 The black labelled market players in the value chain exhibit strong relevance to the provi-

sion of Mobile Marketing campaigns. Grey labelled boxes denote future areas of relevance and white boxes denote an involvement of the player in this chain link but without rele-vance to Mobile Marketing.

Content

Production

Content

AggregationPlatform Portal

Access,

Transport

Billing

& CC

Terminal

Device

Mobile Platform & OS Vendors

Multimedia Agencies

Core Access Players

Device Manufacturers

Content Providers

Mobile Payment Service

Portal Player

Wireless App. Providers


by the integration of context information, this work is going to summarise all of these organisations under the roof of the Mobile Marketing Provider. This leads back to the previously introduced idealised market structure of media markets (cp. Figure 4.5).

Figure 4.5: Players in Mobile Media Market

Consequently, Mobile Marketing Providers, mobile users and advertisers are considered to be actively participating in the mobile media market. However, due to the personal nature of context information, regulators for data protection aspects need to be considered as well. Nevertheless, they act in a passive role and are therefore discussed later in this work.

4.1.5 Market Transactions for Context-sensitive Mobile Attention

In order to conduct Mobile Marketing campaigns, advertisers have to acquire mobile attention on mobile media markets. While the basic structure of mobile media markets is similar to its traditional equivalent (cp. Section 2.1.2), the communication between the market participants is significantly different. The mobile Internet is an electronic medium, which enables a bi-directional, interac-tive communication between the market participants – independent from time and space (cp. Section 2.4.1). Since all market transactions between market par-ticipants are electronically supported by the mobile and stationary Internet, mo-bile media markets are considered electronic markets in the sense of Schmid (2000). The corresponding mobile media market platform, which enables market transactions for mobile attention is considered to consist of the following two components:

Mobile Users

Advertisers



• Mobile Portal: A mobile web-portal allows Mobile Marketing Providers to attract the mobile attention of mobile users by providing entertaining and in-formative content. Furthermore, this content can be bundled with Mobile Ad-vertising campaigns to be delivered to mobile users.

• Mobile Media Market: The mobile media market component enables market transactions for mobile attention between Mobile Marketing Providers and advertisers.

Figure 4.6 illustrates the functioning of a mobile media market platform oper-ated by Mobile Marketing Providers to enable Mobile Advertising campaigns within the scope of this work.

Figure 4.6: Mobile Media Market Platform enabling Mobile Advertising Campaigns

Following the model of Zerdick and Picot (2001, p. 50), interactions between the market players to conduct Mobile Advertising campaigns can be described as follows:

1. Mobile users signal their immediate need for informative or entertaining con-tent to the Mobile Marketing Provider by logging on to their mobile web por-


Mobile

UsersAdvertisers

offers products and services

according to user context

purchases offered products

and generates revenues

pays for

opportunity

to advertise

1

3

4

5

6

7

2

Mobile PortalMobile Media

Market


tal. At the same time, they may disclose primary context information (i.e. lo-cation, time, identity and activities), which can be used to determine and de-scribe their current usage situation.

2. The Mobile Marketing Provider attempts to satisfy these needs by offering mobile content personalised according to derived secondary context informa-tion (e.g. local weather report, news, etc.).

3. In exchange for these predominantly free-of-charge mobile contents, the mo-bile user pays attention to Mobile Advertising campaigns.

4. The Mobile Marketing Provider enriches the attracted mobile attention with acquired context information about mobile users and offers it to advertisers. The latter choose the mobile attention, which exhibits the highest relevance for their Mobile Advertising campaigns (e.g. mobile users in close vicinity to the POS of an advertiser).

5. Advertisers pay for the opportunity to expose this mobile attention to their Mobile Advertising campaigns.

6. Mobile advertising space provided by the Mobile Marketing Provider, which actually enables advertisers to convey their marketing objectives to the re-spective recipients.

7. Mobile users can purchase products / services promoted via the Mobile Ad-vertising campaign – which may generate additional revenues for the adver-tisers.

By following the outlined analysis scope, the next section proceeds with the first component of the framework by analysing context-sensitive mobile attention as an economic good in mobile media markets.

4.2 Characteristics of Context-sensitive Mobile Attention as an Economic Good

Based on the introduced concept of considering mobile attention as an economic good in mobile media markets, the characteristics of context-sensitive mobile attention as an economic good are analysed within the dimensions of intangible goods (cp. Figure 4.7).


Figure 4.7: Context-sensitive Attention as an intangible Good in Mobile Media Markets (based on Koppius 1999)

For this, all characteristics of traditional and context-sensitive mobile attention are compared to the outlined dimensions of intangible goods introduced by Koppius (1999).

4.2.1 Advertiser-related Dimensions

The advertiser-related dimension comprises the following characteristics:

• Value Determination: For mobile attention, classical approaches of value determination do not apply since its value can only be indirectly determined. Therefore, advertisers evaluate mobile attention by matching the correspond-ing attention profile of mobile user to the targeting profile for Mobile Adver-tising campaigns. In order to differentiate between the value determination of traditional and context-sensitive mobile attention, the characterisation of search, experience, and credence qualities is applied.

Traditional attention profiles comprise clusters of statistically derived per-sonal preferences about large groups of mobile users, which are predomi-nately gathered by observing online behaviour of mobile users. Consequently, advertisers can only determine ex post to the conduction of a Mobile Adver-tising campaign if a mobile user actually exhibited proposed personal prefer-

Mobile Marketing

Provider

DeliverySpecificity

Customisability

Substitutability

Intensity of Use

Existence of a Tangible Equivalent

Options for tangible Support

Transfer Mode

Advertiser

Value Determination

Perishability

Recipient

Externalities

Complexity of Product Use

Context-sensitive Mobile Attention


ences34. Consequently, traditional mobile attention constitutes an experience good.

By contrast, context-sensitive mobile attention explicitly describes an indi-vidual mobile user in their momentary usage situation. Consequently, its can be inspected prior to purchase, which shifts its qualities towards a search good (cp. Figure 4.8).

Figure 4.8: Information Qualities of Mobile Attention

• Perishability: Independent from the availability of context information, mo-bile attention cannot be stored and sold later. It has to be sold and used at the same time it is acquired (cp. Section 3.1.3).

• Recipient: The integration of context information into traditional Mobile Marketing campaigns does not change its recipient. Consequently, advertisers remain the recipients of context-sensitive mobile attention.

• Complexity of Use: Context-sensitive attention profiles about mobile users comprise dynamic attention data. This is frequently updated and not always completely accessable to advertisers35. Contrasting to traditional mobile atten-tion, the decision to purchase context-sensitive mobile attention has to be

34 In other words: If a mobile user can be influenced according to the objective of a con-

ducted Mobile Advertising campaign, he is likely to exhibit the personal preferences upon which the Mobile Advertising campaign was targeted.

35 For instance, a mobile user may not give his consent in order to determine his current geo-graphic location.

Search

Qualities

Experience

Qualities

Credence

Qualities

Traditional

Mobile Attention

Context-sensitive

Mobile Attention


made in real-time once a mobile user accesses the mobile portal of a Mobile Marketing Provider. Since this can only be accomplished automatically, ad-vertisers have to specify their corresponding targeting profiles in advance without the knowledge of the actual mobile users. Consequently, context-sensitive mobile attention is assumed to exhibit a higher complexity of use than their traditional equivalents.

• Externalities: As already discussed in Section 3.3.2, traditional mobile atten-tion exhibits cross-network externalities. This also applies to context-sensitive mobile attention, but in a different manner, which is discussed in more detail later in Section 4.4.1.

4.2.2 Mobile Marketing Provider-related Dimensions

Subsequently, the Mobile Marketing Provider-related dimension comprises the following characteristics for mobile attention:

• Specificity: The specificity of mobile attention as a good is closely related to the value determination characteristic in the buyer-related dimension. It fo-cuses on the need of Mobile Marketing Providers to communicate the value of mobile attention to advertisers. Thereby, advertisers need to be able to as-sess if this good will satisfy the purpose of their Mobile Advertising cam-paigns.

Traditional mobile attention is predominantly described by semi-formally specified attention profiles (Nieschlag et al. 2002, p. 1064 ff.) and purchased on a CPM-basis. Thus, advertisers can assess its value in advance (e.g. 10000 mobile users between 20 and 30 years old, interested in sports, can be reached at a price of 10€ CPM). By contrast, the description of context-sensitive mo-bile attention is not available in advance. The attention profile of these mobile users is not available unless they logon to the mobile portal of a Mobile Mar-keting Provider. Consequently, advertisers need to be able to specify general criteria, which allow a later assessment of the value of context-sensitive mo-bile attention in real-time.

• Customisablity: Mobile attention itself cannot be customised according to the preferences of advertisers. Instead, advertisers have to choose the mobile attention of mobile users, which exhibits the highest relevance in relation to their Mobile Marketing campaigns. Since context information constitutes ex-


plicit information about individual mobile users, advertisers are able to ar-chive a significantly higher targeting effectivness for their Mobile Advertising campaigns.

• Substitutability: The substitutability of mobile attention is determined by the specificity of the underlying attention profiles. The higher, the specificity of mobile attention, the less likely it can be substituted by the mobile attention of a different mobile user.

Whereas traditional mobile attention profiles describe large, homogenous au-dience groups (e.g. based on an entered keyword), the traditional mobile at-tention is more likely to be replacable compared to context-sensitive mobile attention. Since context information allows describing an individual momen-tary usage situation of a mobile user, its mobile attention is more difficult to substitute.

• Intensity of Use: Mobile attention is a single-use good since it has to be ac-quired anew for each Mobile Advertising campaign. This applies to tradi-tional as well as context-sensitive mobile attention.

• Existence of tangible equivalent: Since mobile attention cannot be stored, there is no existence of tangible equivalent. This applies to both traditional and context-sensitive mobile attention.

4.2.3 Delivery-related Dimensions

Finally, delivery-related dimensions comprise the following characteristics for context-sensitive mobile attention:

• Transfer mode: There is no differentiation between traditional and context-sensitive mobile attention with regard to its form of transfer from buyer to seller. Independent from the initiation of the transfer (i.e. pull or push), mo-bile attention is delivered at once to the advertisers (buyers) by displaying their Mobile Advertising campaign on the respective advertising space of the mobile portal of a Mobile Marketing Providers (seller).

• Options for tangible support: There is also no differentiation between tradi-tional and context-sensitive mobile attention regarding its tangible support. Mobile Marketing Providers electronically transfer the mobile attention to the


advertiser by displaying the Mobile Advertising campaign on their mobile portal.

4.2.4 Concluding Research Propositions

The analysis of context-sensitive mobile attention as an economic good in mo-bile media markets along the framework of Koppius (1999) revealed several but only two main impacts of context information on the traditional commercialisa-tion of mobile attention:

• Search Qualities: The description of mobile attention based context-sensitive attention profiles rather than their traditional equivalents, increases its search qualities towards a search good. Whereas traditional mobile attention profiles reflect the average preference of mobile users, context-sensitive attention pro-files represent the explicit, current usage situation of individual mobile users.

• Specificity: Due to the need for real-time purchase decisions regarding con-text-sensitive mobile attention, the respective mobile attention and targeting profiles have to be formally specified in order to be automatically matched with each other once a mobile user accesses the mobile portal of the Mobile Marketing Provider.

This leads to the following two research propositions:

• Proposition P1a: Context information increases the search qualities of mo-bile attention, which allows advertisers to evaluate its actual relevance prior to the purchase.

• Proposition P1b: The provision of context-sensitive mobile attention re-quires formally specified mobile attention and targeting profiles.

After the presentation of the analysis of the characteristics of context-sensitive mobile attention as an economic good in mobile media markets, the following section continues to discuss its impacts along the mobile attention value chain of a Mobile Marketing Provider.

4.3 Value Chain of Context-sensitive Mobile Attention

The effectiveness of Mobile Marketing campaigns significantly depends on the provision of the relevant mobile attention as well as respective attention profiles for advertisers (Goldbach Media Gruppe 2009a). Consequently, Mobile Market-


ing Providers willing to maximise their profits from the commercialisation of context-sensitive mobile attention have to implement the following strategy:

1. Acquire that quality of context-sensitive mobile attention profiles, which most accuractely describes the attention of a mobile user according to the re-quirements of advertisers.

2. Sell this context-sensitive mobile attention at an optimal price to advertisers.

Along the value chain for mobile attention as outlined in Section 3.2, the im-pacts of context information on this business strategy are examined in the fol-lowing sections. Therefore, the subsequent section begins with the procurement of context-sensitive mobile attention.

4.3.1 Procurement of Context-sensitive Mobile Attention

The procurement of context-sensitive mobile attention predominantly differs from its traditional equivalent with regard to the acquisition of its corresponding mobile attention data. Therefore, the first step of the analysis is to discuss the way mobile attention data is acquired from mobile users.

Figure 4.9 shows on the left side the acquisition of traditional mobile attention data. Mobile Marketing Providers acquire it by observing the online behaviour of mobile users (e.g. entered keywords, visited websites, etc.) without or only low user involvement. By contrast, context-sensitive mobile attention data is actively disclosed by mobile users. Although, primary context information (i.e. identity, location, and time) could theoretically be acquired automatically from mobile network operators without user involvement, it typically requires the user consent (European Parliament 1995). In addition, the acquisition of secon-dary identity-related context information even more requires the user’s willing-ness to disclose information such as personal preferences (e.g. age, gender, or personal interests). Other secondary context information such as geo-marketing related information (e.g. POS distance) can be acquired from specialised content providers such as Microsoft Bing Maps (Microsoft Corporation 2009a) but re-quire the existing primary context information.


Figure 4.9: Acquisition of Traditional vs. Context-sensitive Attention Data

Consequently, the intrinsic value of context-sensitive mobile attention in mobile media markets is determined by the willingness of mobile users to disclose their context information. In this regard, Friberg (2007, p. 22 ff.) provides a compre-hensive overview of general factors influencing individual privacy attitudes of online users. Her identified factors apply to Mobile Advertising campaigns as follows:

• Collection and Benefit Trade-Off: A mobile user’s willingness to disclose personal information is influenced by the proposed purpose of the information usage (e.g. service personalisation vs. personalisation of Mobile Advertising campaigns). In addition, a mobile user expects an incentive or wants to per-ceive value as compensation in exchange for the disclosure of personal infor-mation (e.g. in the form of a discount coupon) (Steimel et al. 2008, p. 89). Thereby, especially monetary incentives (e.g. mobile coupons) can generate significant costs, which have to be considered in the pricing of mobile atten-tion for advertisers.

• Control: A mobile user’s influence on disclosure of their personal informa-tion in the form of approval, modification, or refusal is significantly related to their personal privacy concerns.

Context -sensitiveAttention Data

TraditionalAttention Data

ContentProvider 1

ContentProvider n

Mobile Network Operator

…

Behavioural

Data

Primary

ContextInformation

Personal

Preferences

Secondary Context Information

POS

DistanceRemaining

Time


• Awareness: Advertisers acquiring the permission of mobile users to gather personal information raise less privacy concerns compared to those organisa-tions, which collect personal information without the knowledge of mobile users and they become aware of this fact afterwards (Lai et al. 2005).

• Type of Information: Privacy concerns of mobile users also depend on the type of personal information collected by advertisers. Fewer concerns may arise from the collection of lifestyle characteristics, shopping or media habits. By contrast, medical records, financial records or real-time location informa-tion are regarded highly sensitive (Friberg 2007, p. 24).

• User Experience: A mobile user’s previous online experience affects their willingness to disclose personal information. As long as the mobile user has not had their privacy invaded (e.g. e-mail spam originating from a disclosed e-mail address) in the past, they are less concerned about their personal pri-vacy. Once their privacy has been violated, they may be less willing to share personal information in order to receive personalised advertisements (Awad and Krishnan 2006).

• Trust, Risk, and Behavioural Intentions: Trust defined as “the willingness of a party to be vulnerable to the actions of another party based on the expec-tation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” (Mayer et al. 1995) constitutes an important influence on the privacy concerns of mobile users. It mitigates their perceived risk regarding online transactions or activi-ties, which require the disclosure of personal information. Thus, the higher the trust towards a transaction or online partner (here, the Mobile Marketing Provider), the lower the perceived risk of mobile users and consequently the higher the willingness to disclose personal information.

• Personality Traits: There is a consensus in literature about the fact that per-sonal traits influence trust and risks the belief of consumers (Friberg 2007, p. 27). This implies that disclosure of personal information to Mobile Marketing Providers by mobile users depends on such beliefs as well. Consequently, mobile users with high privacy concerns also have a low trust in Mobile Mar-keting Providers.

• Information Transparency: Awad and Krishnan (2006) consider informa-tion transparency as the access for users to the information that an organisa-


tion has collected about them, and the explanation on how this information is going to be used (e.g. data transparency, data removal, and time expiration of data). In this regard, Friberg (2007, p. 82) concludes that information trans-parency is able to reduce privacy concerns and increase the user’s willingness to disclose personal information. This implies the need for Mobile Marketing Providers to make the targeting process of Mobile Advertising campaigns for mobile users transparent. For instance, it could be disclosed to a mobile user that a certain Mobile Advertising campaign has been displayed on their mo-bile device because of their close vicinity to a promoted POS.

In addition to the willingness of mobile users to disclose context-sensitive mo-bile attention data, the data quality aspects of traditional and context-sensitive mobile attention data have to be compared. This is because the data quality de-termines an advertiser’s ability to target Mobile Advertising campaigns effec-tively.

The quality of traditional mobile attention data predominantly depends of the amount of collected behavioural data and its interpretation for the targeting of Mobile Advertising campaigns (Oesterer and Winkler 2008, p. 579 ff.). This data quality can be characterised based on the data quality framework of Wang and Strong (1996) as outlined in Section 3.2.1. However, since context-sensitive mobile attention data is the focus of this analysis, it is no longer addressed within the scope of this work.

For context-sensitive mobile attention data, the data quality can be analysed based on quality of context framework of Buchholz et al. (2003, p. 5 ff.). It is defined by the following quality criteria:

• Precision: Precision describes how accurate provided context information about mobile users is. For instance, although GPS is able to position mobile users on a scale of a few metres, the precision of COO-localisation can vary between 100m and 30km (cp. Section 2.4.1.3).

• Probability of Correctness: Depending on the source of context information different probabilities for its correctness exists. For instance, a GPS device may fail to provide their correct location due to the lack of satellite connec-tivity.


• Trust-worthiness: Whereas the probability of correctness is concerned with the ability of a context information source to provide correct data, trust-worthiness can be referred to mobile users. Depending on the available incen-tives, mobile users may or may not disclose the correct personal information (e.g. gender, age, etc.) (Friberg 2007, p. 22).

• Resolution: The resolution denotes the granularity, which context informa-tion can represent. For instance, the POS distance for a mobile user may only be calculated in 100m rather than 1m units.

• Up-to-dateness: Up-to-dateness describes the current age of context informa-tion. This is information is important because the value of mobile attention is significantly determined by the ability of context information to describe the momentary usage of a mobile user (e.g. student, at Frankfurt main train sta-tion, at lunchtime).

In conclusion, the quality criteria for context information are of a predominantly quantitative nature compared to its traditional equivalents. Thus, the evaluation of context-sensitive mobile attention data quality requires less interpretation and can be measured more objectively.

4.3.2 Production of Context-sensitive Mobile Attention

In order to convert acquired mobile attention into a tradable good, Mobile Mar-keting Providers have to produce mobile attention profiles from the attention data (Figge 2007, p. 66 ff.). These profiles represent the personal preferences of mobile users in their momentary usage situation and enable the targeting of Mo-bile Advertising campaigns for advertisers.

Depending on the requirements of advertisers as recipients of mobile attention profiles, those can be processed in various forms (i.e. analytically, synoptically or synthetically). Traditional attention data represents observed online behaviour of mobile users (e.g. followed links, entered keywords, etc.). It is analytically processed to derive mobile user preferences. Those traditional mobile attention profiles represent the statistical average preferences of a group of mobile users, who regulary pay attention to a certain type of Mobile Advertising campaign (Hegge 2008, p. 288 ff.; Oesterer and Winkler 2008, p. 579 ff.).

By contrast, context-sensitive attention data represents explicit information about individual mobile users. It is synthetically processed (Rose 1998, p. 172)


by compiling the different types of attention data to a unified context-sensitive mobile attention profile. Since the availability and accuracy of attention data may vary (cp. Section 4.3.1), adding quality information (e.g. location data ac-curacy) to the profile allows advertisers to assess the overall quality of the atten-tion profile to a certain extent by themselves. The same applies to integration of privacy polices into the attention profile, since Section 4.3.1 revealed the influ-ence of the ability of mobile users to the control the usage of their personal data on their willingness to disclose this data.

4.3.3 Sale and Distribution of Context-sensitive Mobile Attention

Mobile Marketing Providers commercialise the produced context-sensitive mo-bile attention via their mobile media market. Thereby, they act in two different roles. On the one hand, they act as merchant intermediaries, which acquire mo-bile attention from mobile users to sell them to advertisers. On the other hand, they operate the mobile media market on which they offer the mobile attention to advertisers. In the latter case, they support the different phases of the neces-sary market transactions. As outlined in Section 3.2.3, these market transactions can be divided into an information, agreement, and settlement phase. The impact of context information on these phases is addressed in the following sections.

4.3.3.1 The Information Phase

In the information phase, advertisers acquire general information about the mo-bile media market. Since a monopolistic Mobile Marketing Provider is assumed within the scope of this work, this activity can be reduced to the evaluation and selection of relevant context-sensitive mobile attention for their Mobile Adver-tising campaigns. In order to do so, advertisers match available mobile attention profiles with the targeting profiles for their corresponding Mobile Advertising campaigns.

Traditional mobile attention is predominantly purchased by advertisers prior to conducting a Mobile Advertising campaign. Therefore, advertisers select the most relevant mobile attention based on traditional mobile attention profiles. Those are semi-formally specified and comprised of a set of predefined mobile user preferences. In order for advertisers to assess the value (relevance) of mo-bile attention, a common semantic understanding is required between Mobile


Marketing Providers and advertisers about the meaning of the attributes con-tained in the traditional mobile attention profile (Figge 2007, p. 82).

By contrast, context-sensitive mobile attention is purchased at the very moment, a mobile users accesses the mobile portal of a Mobile Marketing Provider. Therefore, context-sensitive mobile attention profiles have to be matched in real-time with the corresponding targeting profile of a Mobile Advertising cam-paign. Consequently, context-sensitive mobile attention profiles as well as the respective targeting profiles have to be formally specified (cp. Section 4.2) in an electronically processable data format. Therefore, a common semantic under-standing about the contained attributes is required as well (Schmid 1999, p. 10). However, since context information is actively disclosed by mobile users, this understanding has to be extended to them too. If mobile users are unable to ex-press their real personal preferences (e.g. personal interests) against a Mobile Marketing Provider or advertiser respectively, the targeting of a Mobile Adver-tising campaign may fail.

As result of the information phase, the advertiser selects the mobile attention of their preferred mobile audience by formally specifying their targeting profile (e.g. male students, currently in Munich on holiday). Subsequently, the price fixing process for this mobile attention is the main objective of the agreement phase.

4.3.3.2 The Agreement Phase

The main subject of the negotiation of an agreement between Mobile Marketing Providers and advertisers is the price fixing for the provision of mobile attention. The type of negotiation significantly depends on the applied pricing model. For static pricing models such as CPM, the terms of conditions are already available in the information phase (Steimel et al. 2008, p. 93). By contrast, dynamic, in-teractive pricing models typically found in the search engine-marketing domain, are auctioning off the position of a mobile advertisement on the result page of search engines (Google Corporation 2009c; Yahoo Corporation 2009a).

Traditional mobile attention is predominately priced based on the static CPM pricing model (Steimel et al. 2008, p. 22). Theoretically, this model could also be applied to context-sensitive mobile attention. However, the availability of context information for mobile attention leads to the ability to target very small audiences groups or even individual mobile users.


Figure 4.10 depicts the different types of targeted groups. For traditional mobile attention, all mobile users within the targeting profile (e.g. male students living in Frankfurt) have the same single value for advertisers. By contrast, for context-sensitive mobile attention, all mobile users within a targeting profile (e.g. mobile users with a max. POS distance of 500m) can exhibit further individual, distinc-tive values for advertisers (e.g. individual personal preferences derived from their identity information).

Figure 4.10: Targeting of Traditional vs. Context-sensitive Mobile Atten-tion

Consequently, the characteristics, which determine the individuality of context-sensitive mobile attention for advertisers, can be summarised as follows:

• Quantity of disclosed Context-sensitive Mobile Attention Data: This as-pect denotes the amount of available mobile attention data about mobile us-ers, which can be used in order to generate a mobile context-sensitive atten-tion profile. For instance, due to privacy issues, a mobile user may only dis-close a subset of the attention data relevant for an advertiser, which conse-quently lowers the value of their mobile attention (Albers et al. 2008; Albers 2007).

• Quality of Context-sensitive Attention Profile: This aspect denotes the quality of context-sensitive attention data based on the quality criteria frame-

TraditionalMobile Attention

Mobile

Users

Context-sensitive Mobile Attention

Targeting Profile

Value X

Value A

Value B

Value C

Value D


work introduced by Buchholz et al. (2003). For instance, the quality of con-text information can be described by its up-to-dateness, precision or the reso-lution (cp. Section 4.3.1).

• Advertiser’s Ability to assess the Value of Context-sensitive Attention: Advertisers need to be able to assess the actual value or relevance of mobile attention for their planned Mobile Advertising campaign. Otherwise, they will not able to reveal their true willingness-to-pay for it (Skiera and Spann 2002, p. 279).

In conclusion, context-sensitive mobile attention exhibits better search qualities than traditional mobile attention, which helps to reduce the information asym-metries between advertisers and mobile users. This allows advertisers to select the individual mobile attention of mobile users, which they consider relevant for their Mobile Advertising campaigns. Thereby, the context-sensitive mobile at-tention of each mobile user has a distinct value for each advertiser. Conse-quently, the pricing of context-sensitive mobile attention based on classic CPM approaches is no longer efficient. Mobile Marketing Providers have to differen-tiate prices for mobile attention in accordance with an advertiser’s individual WTP. This allows them to increase their profits by reducing the advertiser’s sur-plus (Varian 1996).

According to Odlyzko (2003), three prerequisites have to be met in order that Mobile Marketing Providers are able to conduct price discrimination:

• Advertisers have to accept price discrimination for mobile attention (1).

• Mobile Marketing Providers can successfully prevent arbitrage (2).

• Mobile Marketing Providers have to gain knowledge about the individual WTP of an advertiser for the mobile attention of a mobile user in their mo-mentary usage situation (3).

The ability to meet the first condition originates from the fact that advertisers cannot compare the prices of mobile attention to prices offered by theoretical competitors. Context information leads to an individual value of mobile atten-tion for each advertiser. Thus, context information converts the homogenous good mobile attention into a heterogeneous one. This makes it a non-commodity good, which can be price-discriminated.


The second condition is met by intrinsic characteristics of mobile attention. Since attention is not storable and as such has to be consumed by Mobile Adver-tising campaigns at the very moment is has been acquired (cp. Section 3.1.3), no arbitrage is possible.

In order to meet the third condition an appropriate pricing mechanism has to be implemented, which reveals the WTP of advertisers for context-sensitive mobile attention. For instance, the Vickrey Auction (Cary et al. 2007) represents under certain circumstances such a pricing mechanism (Klemperer 2002).

The consecutive and final transaction phase for context-sensitive mobile atten-tion constitutes the settlement phase.

4.3.3.3 The Settlement Phase

In the settlement phase, mobile attention is transferred to the respective advertis-ers in exchange for monetary compensation. In order to deliver mobile attention to advertisers, Mobile Marketing Providers have to visually display the corre-sponding Mobile Advertising campaigns on the advertising space of their mobile portal. While this process is same for traditional and context-sensitive attention, the availability of context information contributes to the reduction of click fraud,as well as the gain of knowledge about the physical behaviour of mobile users in relation to conducted Mobile Advertising campaigns:

• Click-Fraud Reduction: The most basic form of click fraud aims at causingfinancial harm to competing advertisers. For this, an online or mobile display advertisement is clicked until the marketing budget for this campaign is ex-hausted and the advertisement is no longer displayed (Bennefeld 2008, p. 594). Due to the global availability of the Internet, this fraud can be commit-ted from any place in the world for traditional Mobile Advertising campaigns. By contrast, for context-sensitive Mobile Advertising campaigns, a mobile user has to be in the targeted usage context of a Mobile Advertising campaign (e.g. a mobile user sees and can only click on a mobile advertisement if he re-sides in close vicinity of a POS).

• Knowledge of Physical Behaviour of Mobile Users: Traditional perform-ance measurement solely captures the online reaction of a mobile user to a conducted Mobile Advertising campaign (e.g. click on the mobile advertise-ment) (Steimel 2008, p. 74). The performance measurement of context-sensitive Mobile Advertising campaigns additionally allows incorporating the


momentary usage situation. Consequently, advertisers could gain knowledge in which context mobile users actually respond to a delivered Mobile Adver-tising campaign. For instance, the Sense Networks Corporation (Sense Net-works 2009) provides a platform, which is dedicated to analysis mobile loca-tion data in real-time. It allows deriving information such as “how the dis-tance to a POS correlates to the likelihood of a mobile user actually visiting the POS for a purchase”.


Based on the analysis of impacts of context information on the mobile attention value chain of Mobile Marketing Providers, the following research propositions have been developed:

• Proposition P2a: The general value of context-sensitive attention signifi-cantly depends on the willingness of individual mobile users to disclose qual-ity attention data.

• Proposition P2b: Context-sensitive mobile attention profiles allow advertis-ers to individually determine the relevance of mobile users and select them accordingly for their Mobile Advertising campaigns.

• Proposition P2c: Context-sensitive mobile attention profiles require a for-mal representation and common semantic understanding between all market participants to enable effective targeting for Mobile Advertising campaigns.

• Proposition P2d: The value of context-sensitive attention is individual for each advertiser, which leads to an individual willingness-to-pay. Conse-quently, traditional CPM-based pricing models are no longer efficient for Mobile Marketing Providers.

Finally, after the presentation of the analysis of the characteristics of mobile at-tention as an economic good as well as its corresponding value chain, the im-pacts of context-sensitive mobile attention on the functioning and characteristics of mobile media markets from the network economics perspective are presented.

4.4 Two-sided Mobile Media Markets of Context-sensitive Mobile Attention

The impact analysis of context information on mobile attention closes with the analysis of context-sensitive mobile attention from the perspective of network


economics in the form of two-sided markets. Consequently, the following sec-tions evaluate the main characteristics of two-sided mobile media markets as introduced in Section 3.3.

4.4.1 Indirect Network Externalities

One of the most distinct characteristics of two-sided media markets are indirect network externalities across both markets (cp. Section 3.3.2). In traditional mo-bile media markets, advertisers benefit from an increasing number of mobile users (reach) whereas the utility of mobile users can either be positively or nega-tive correlated to the number of advertisers in the market (cp. Section 3.3.1).

With the availability of context information, the mobile attention of mobile users can be described more accurately and thus individually. While this provides benefit to advertisers and mobile users (cp. Section 2.5), it also decreases the indirect cross-network effects within the two-sided mobile media market. The more accurately a mobile attention profile describes the preferences of a targeted mobile user, the more difficult it becomes to find this mobile user among the visitors of a Mobile Marketing Provider’s mobile portal. Consequently, the mere size of the content or advertiser market side becomes less relevant compared to having the right mobile users matched to the targeting profiles with advertisers in the market.

4.4.2 Common Pricing Structure

Two-sided media markets are linked by their common pricing structure across both markets. In general, advertising-financed media markets offer content to mobile users predominately free-of-charge, while advertisers are charged for the attention of users (cp. Section 3.3.2).

In traditional mobile media markets, the situation is similar. However, the acqui-sition of context information in order to target Mobile Advertising campaigns generates additional costs (cp. Section 3.2.1). This is because mobile users ex-pect incentives in exchange for the active disclosure of personal information (Awad and Krishnan 2006). Consequently, Mobile Marketing Providers are fac-ing the question of how to balance the acquisition costs for context information, in relation to the potentially higher willingness-to-pay of advertisers, due to a higher targeting effectiveness for context-sensitive mobile attention.


4.4.3 Interaction Types

Two-sided mobile media markets exhibit the single interactions (one-to-one) and multiple interactions (one-to-many) between participants on both market sides, which cause network externalities (cp. Section 3.3.2).

In traditional mobile media markets, attention profiles define large audience groups based on their personal preferences (cp. Section 2.4.2.1). Consequently, advertisers typically benefit from each additional mobile user on the opposite market side. Therefore, traditional mobile media markets represent multiple in-teraction markets.

By contrast, context-sensitive mobile attention profiles allow advertisers to tar-get their Mobile Advertising campaigns more individually towards mobile users. Thus, advertisers only benefit if an additional mobile user fits their very specific targeting profile. Consequently, context-sensitive mobile attention shifts tradi-tional two-sided mobile media markets towards the single interaction market type.

4.4.4 Development of new Two-sided Mobile Media Markets

The main issue of developing and establishing a two-sided market is often called the chicken & egg problem. It refers to the fact that a market intermediary has to get a certain number of participants onboard for both market sides at the same time. Once a critical mass of participants on either side has been reached, the market starts to function on its own. This issue can be addressed by various forms of subsidisation for one or both markets (cp. Section 3.3.2).

Context information allows advertisers to target Mobile Advertising campaigns to individual mobile users. Therefore, subsidising one market becomes more difficult than in traditional mobile media markets. Although the latter benefits from any new participant, the development of mobile media markets for context-sensitive mobile attention can only take advantage from a new participant, if he is directly relevant to the opposite market. In other words, a new mobile user is only beneficial to the two-sided mobile media market development if he matches to the targeting profile of an existing advertiser.


Consequently, subsidisation of one mobile media market side has to be targeted to the needs of the opposite market side, which translates to bringing in the rightnew market participants.

4.4.5 Two-sided Market Type

Finally, the service enabled by a market intermediary in a two-sided market also determines its market type. In general, advertising-financed media markets are audience maker markets. Their purpose is to generate an audience, which atten-tion can be offered to advertisers for conducting marketing campaigns.

The same applies to mobile media markets for traditional and context-sensitive mobile attention. Consequently, these markets are audience maker markets as well.


Based on the previous analysis of context-sensitive mobile attention from the network economics perspective for two-sided markets, the following main re-search propositions have been developed:

• Proposition P3a: Context-sensitive mobile attention decreases indirect net-work externalities due to its capability of individually describing the prefer-ences of mobile users in their current usage situation.

• Proposition P3b: Critical mass of participants for the development and op-eration of mobile media markets for context-sensitive mobile attention is harder to reach than for traditional mobile media markets.

4.5 Limitations of the Analysis

The analysis of context-sensitive mobile attention exhibits some conceptional limitations, which predominantly originate from the novelty of context-sensitive Mobile Advertising campaigns and therefore the lack of corresponding mobile media markets in practice.

First, due to the novelty of context-sensitive Mobile Advertising campaigns, this analysis has an explorative character. Consequently, not all relevant impacts of context information on mobile attention might have been identified.

Second, the analysis was conducted by literature review. Thus, the identified impacts of context information on the traditional commercialisation of mobile


attention can only indicate the need for different or new engineering require-ments for mobile media markets than empirically proving them.

Finally, the developed conceptional analysis framework (cp. Chapter 3) consid-ers mobile attention as an economic good in mobile media markets. Although, the attention economy school lays the foundation for this approach, it does not constitute a proven theory (Zerdick et al. 2001, p. 36 ff.).


The provision of context-sensitive mobile attention allows a more effective tar-geting of Mobile Marketing campaigns for advertisers, whilst delivering more relevance to mobile users. However, in contrast to traditional mobile attention data, context information constitutes explicit knowledge on the current usage situation of a mobile user, which needs to be willingly disclosed by them.

In order to identify and analyse possible impacts originating from these special characteristics of context information, the developed conceptual analysis framework presented in Chapter 3 was applied. Consequently, all relevant as-pects concerning the commercialisation of context-sensitive mobile attention in mobile media markets along with the impacts of context information on Mobile Marketing Providers have been examined.

By narrowing down the analysis scope from Mobile Marketing campaigns to Mobile Advertising campaigns as its most prospective subset, the following concrete aspects of the commercialisation of mobile attention have been ana-lysed:

• Mobile Attention as an Economic Good in Mobile Media Markets: Im-pacts of context information on the characteristics of mobile attention as an economic good, which is being traded in mobile media markets.

• Mobile Attention Value Chain of Mobile Marketing Providers: Impacts of context information on the acquisition, production, and sales & distribu-tion of mobile attention by Mobile Marketing Providers.

• Mobile Media Markets as Two-sided Markets: Impacts of context infor-mation on the characteristics and functioning of mobile media markets from the network economics perspective.


Based on the analysis results, multiple research propositions reflecting the ex-plored impacts have been developed. The following Table 4.1 summarises these propositions based on the perspectives from which the analysis was conducted.

Table 4.1: Summary of developed Research Propositions on the Impacts of Context Information on Mobile Attention

Analysis Perspective

Analysed Aspects Developed Research Proposition

Characteristics of

Context-sensitive

Attention as an

Economic Good

- Proposition P1a: Context information in-creases the search qualities of mobile attention, which allows advertisers to evaluate its actual relevance prior to the purchase.

Proposition P1b: The provision of context-sensitive mobile attention requires formally specified mobile attention and targeting profiles.

Value Creation

Process for Con-

text-sensitive

Mobile Attention

Procurement of

Context-sensitive

Mobile Attention

Proposition P2a: The general value of context-sensitive attention significantly depends on the willingness of individual mobile users to disclose quality attention data.

Proposition P2b: Context-sensitive mobile at-tention profiles allow advertisers to individually determine the relevance of mobile users and select them accordingly for their Mobile Advertis-ing campaigns.

Proposition P2c: Context-sensitive mobile at-tention profiles require a formal representation and common semantic understanding between all market participants to enable effective target-ing for Mobile Advertising campaigns.

Proposition P2d: The value of context-sensitive attention is individual for each advertiser, which leads to an individual willingness-to-pay. Thus, traditional CPM-based pricing models are no longer efficient for Mobile Marketing Providers.

Production of Con-

text-sensitive Mo-

bile Attention

Sales and Distribu-

tion of Context-

sensitive Mobile

Attention


Analysis Perspective

Analysed Aspects Developed Research Proposition

Two-sided Mobile

Media Markets of

Context-sensitive

Attention

Indirect Network

Externalities across

both Markets

Proposition P3a: Context-sensitive mobile at-tention decreases indirect network externalities due to its capability of individually describing the preferences of mobile users in their current us-age situation.

Proposition P3b: Critical mass of participants for development and operation in mobile media markets for context-sensitive mobile attention is harder to reach than for traditional mobile media markets.

Multiple Interaction

Externalities

Common Pricing

Structure

Development of

new Two-sided

Mobile Media Mar-

kets

Two-sided Market

Type

Indirect Network

Externalities across

both Markets

Technically, context information can be considered as additional data, which allows describing the momentary usage situation of mobile users. It could be integrated into mobile media market platforms of Mobile Marketing Providers with a reasonable effort. However, the outlined research propositions indicate the need for Mobile Marketing Providers to align the current design of their mo-bile media market platforms in order to address the identified impacts of context information on the traditional commercialisation of mobile attention.

For this, the developed research propositions constitute an analysis theory (The-ory Type I) in the sense of Gregor (2006) and contribute as foundation for the development of engineering recommendation framework for mobile media mar-ket platforms.

In order to develop and document the engineering recommendations in a struc-tured, applicable, and proven manner, the following chapter presents the selec-tion and adaption of a reference framework and process model from the field of electronic markets for the engineering of mobile media markets.

Reference Model for the Development of Mobile Media Markets 115

5 Reference Model for the Development of Mobile Media Markets

Following Schmid and Lindemann (1998), mobile media markets can be consid-ered electronic markets because all transaction phases are electronically sup-ported. The design of these markets is considered a complex and error-prone task. Thereby, the development process towards a desired market outcome is typically conducted in a trial and error manner (Weinhardt et al. 2003).

Consequently, in order to develop engineering recommendations for mobile me-dia market platforms, existing electronic market frameworks are reviewed and their suitability to capture the engineering recommendations is examined. For this, Section 5.1 gives an introduction to traditional and electronic markets from an institutional perspective whilst highlighting their basic components. Subse-quently, Section 5.2 shows the literature review on the design of electronic mar-kets in the search for existing engineering frameworks suitable to capture the aspects of mobile media markets.

Section 5.3 introduces the Market Engineering Framework of Weinhardt et al. (2003) as the model most appropriate for addressing the design aspects of mo-bile media markets. Subsequently, Section 5.4 reveals the complementary engi-neering process model of the Market Engineering Framework. It specifies a se-ries of activities to be accomplished to develop and rollout electronic markets.

Finally, Section 5.5 presents how the Market Engineering Framework of Weinhardt et al. (2003) is aligned to be able to develop and document the engi-neering recommendations of mobile media market platforms. The actual engi-neering recommendation framework is then presented in Chapter 6.

5.1 Introduction to Electronic Markets

A broadly acknowledged theoretical foundation for the concept market comes from the discipline of Economics by Smith (1982). He introduced the microeco-nomic system framework, which describes an economic system as a set of inter-related concepts for markets as institutions (cp. Figure 5.1).


Figure 5.1: Microeconomic System Framework (Smith 1982)

The first component of this framework comprises the economic environment. It documents the preferences of agents (market participants) towards available transactions, the characteristics of resources (tradable goods) as well as the ex-isting knowledge of agents (market information). Within this environment a mechanism, which can be considered as dialogue between agents, leads to an allocation of resources. This mechanism is governed by an institution, which represents the second component of the framework. It represents a set of basic rules, which control the dialogue process of the agents and ultimately determines the outcome of the mechanism (agent behaviour) leading to a resource allocation (outcome in the economic system). The comparison of this outcome to the initial economic environment results in the system performance.

While from the abstract institutional perspective, electronic markets can also be characterised as the microeconomic system framework of Smith (1982), they exhibit several distinctive characteristics. By following Schmid and Lindemann (1998), electronic markets at least support one phase of a market transaction electronically. In addition, electronic markets do not evolve, but have to be de-

Economic EnvironmentAgent Preferences, Costs,

Resources, Knowledge

System PerformanceEfficiency, Revenue

BehaviourBased on dispersed

private information

given the Institution

System PerformanceEfficiency, Revenue

InstitutionLanguage of Market,

Rules of Communication and Contract,

Procedural Structure


signed towards a desired market outcome (Weinhardt et al. 2003). They require a market operator, who provides an electronic marketplace, in order to enable the allocation of resources in exchange for monetary compensation (Neumann 2007, p. 63). Thereby, the market operator needs to compensate their invest-ments in the electronic market and gain profits from their operation. Conse-quently, the design of electronic markets involves the development of a market operator’s business model as well (Weinhardt et al. 2006, p. 9). Furthermore, the information and communication technology (ICT) has to be considered too. Be-cause of this, the development of distributed market platforms (e.g. via Peer-to-Peer architectures), multi-agent systems targeting scalability, security and trust, as well as the computability of resource allocation comprise the most recent challenges to be addressed in this field (Weinhardt et al. 2006, p. 9).

Electronic markets do not merely comprise the development of a resource allo-cation mechanism conducted via electronic media. Market designers have to consider the interdisciplinary aspects of electronic markets, which require an integrated development approach (Schmid and Lindemann 1998). In this regard, the following section shows the review of existing contributions to this field.

5.2 Related Work on the Design of Electronic Markets

Literature reviews on electronic markets show that a large body of contributions merely focuses on isolated aspects of electronic markets – especially on their resource allocation mechanism.

Tewari and Maes (2000) developed an agent-based intermediary infrastructure for electronic markets whilst focussing on the development of a resource alloca-tion mechanism for heterogeneous goods, and deriving a suitable IT-infrastructure. Bichler (2001) analysed multi-attributive auctions on electronic markets with respect to the required ICT-infrastructure. In addition, Gogolin and Schneider (2004) have developed a flexible technical infrastructure for enabling electronic markets.

Regarding the business aspects of electronic markets, Bellmann et al. (2006) and Rose (1998) have developed an economic model of electronic markets based on the economics of search as an underlying foundation. Furthermore, Dai and Kauffman (2002) introduced a business model for Internet-based B2B Elec-tronic Markets. Yoo et al. (2002) introduced pricing strategies of electronic B2B


marketplaces with two-sided network externalities. Schubert (1997) aimed at developing a framework to capture socio-economic aspects of electronic mar-kets. Finally, Subrahmanian and Talukdar (2003) discussed the relationship be-tween engineering and economic-driven approaches of designing of markets.

In contrast to the research of isolated aspects of electronic markets, Lindemann and Schmid (1998) proposed an interdisciplinary reference model of electronic markets (cp. Figure 5.2).

Figure 5.2: Reference Model for Electronic Markets (Lindemann and Schmid 1998)

The reference model vertically structures the design aspects of the different dis-ciplines as views along the classic phases of a market transaction. In this regard, the two upper views are concerned with organisational aspects, whereas the lower equivalents are addressing the technological aspects of the electronic mar-ket. Although, acknowledging the need to address the interdisciplinary aspects of electronic markets with the development of a multi-layered reference model, the authors did not provide a structured process model to alleviate the complex and error-prone design of electronic markets. In this regard, Weinhardt et al. (2003) introduced the Market Engineering approach for the design of electronic

Market Transaction

Business ModelBusiness

View

Transaction

View

Service

View

Infrastructure

View

Information

Phase

Agreement

Phase

Settlement

Phase

Market Transactions and Business Scenarios

Communication Infrastructure

Mediating E-

Product

Catalogue

Electronic

Contracting Tool

Computer

Integrated

Logistics

t


markets. It provides an interdisciplinary framework as well as a complementary, structured process model for the engineering electronic markets.

In the following section, this Market Engineering Framework is further elabo-rated and substantiated why it is chosen for the development and documentation of the engineering recommendation for mobile media markets of context-sensitive mobile attention.

5.3 Introduction to the Market Engineering Framework

The Market Engineering Framework as well as its process model were initially introduced by Weinhardt et al. (2003) and have further been shaped by Neu-mann (2007) and Holtmann (2004). Although, they were designed to suit finan-cial electronic markets, the following sections will introduce them and subse-quently show their applicability to mobile media markets.

Weinhardt et al. (2003) developed and introduced the Market Engineering framework based on the Microeconomic System Framework of Smith (1982). It explicates the relation between the market structure, behaviour of market par-ticipants and finally the market outcome (cp. Figure 5.3).

Figure 5.3: Electronic Market Engineering Framework (based on Weinhardt et al. 2003)

Markets and especially electronic markets do not exist independently in empty space. They are embedded in a market environment, which can be characterised by technological, socio-economic, and legal aspects. Those cannot be influenced by a market designer (cp. next section).

Behaviour of

Market Participants

E-Market

outcome

Transaction Service

(market structure)

• Microstructure

• ICT-Infrastructure

• Business Model

Transaction

Object

Environment• Technological

• Social-

economical

• Legal

Market Performance(Allocation, Prices)


5.3.1 Market Environment

The market environment is comprised of three components. The technological environment reflects the available underlying ICT-infrastructure, which enables the market participants to communicate and interact via electronic media. To-day, this especially involves the Internet as the electronic communication me-dium and the information technology required to process the resource allocation mechanisms (Weinhardt et al. 2006, p. 9). The socio-economic environment is concerned with the relation between economic activities of the market partici-pants and their social life. Thereby, the focus is on the social impact of occurring economic change such as the emergence of new technologies, introduced laws and impacts on physical or ecological environment (Schubert 1997, p. 3). Fi-nally, legal environment outlines the boundaries of market operators defined by the applicable law. Therefore, markets for electronic commerce are, among oth-ers, affected by the European data protection directives, which aim to protect the privacy of online users or electronic markets participants respectively (European Parliament 1995; European Parliament 2002).

5.3.2 Transaction Object

Based on the given market environment, the market designer describes the transaction object by specifying its key characteristics. According to Holtmann (2004, p .137) this includes answering the following questions:

• What kind of good can actually be traded on the market (e.g. tangible vs. in-tangible goods)? This is directly determined by the interests of the market stakeholders as well as the market environment.

• What are the key characteristics, which suitably describe the transaction ob-ject? For instance, this includes ensuring that buyers are able to distinctly identify a trading object and determine its quality.

• How can this good actually be traded on the market (e.g. minimum requested quantity)? For instance, information as an economic good is traded differently than physical goods (Shapiro and Varian 2006, p. 3 f.).

The transaction object specification constitutes the link between the market en-vironment in which an electronic market is embedded, and the market transac-tion service to be designed (Weinhardt et al. 2003, p. 137). Thereby, this trans-


action service of an electronic market consists of the three components, which are introduced in the following sections.

5.3.3 Transaction Service

The transaction service of an electronic market consists of the market operator’s business model, the market microstructure, and its underlying ICT-infrastructure.

5.3.3.1 Business Model

Intuitively, a business model aims at conceptualising the business of an organi-sation. In this regard, one of the most comprehensive contributions was provided by Osterwalder (2004, p. 23 ff.). He analysed an extensive body of literature on business models and subsequently proposed a unified reference model synthesis-ing all evaluated business model approaches (Osterwalder 2004, p. 42 ff.). Therefore, this work follows his definition of the term business model (Oster-walder 2004, p. 14):

A business model is a conceptual tool that contains a set of ele-ments and their relationships and allows expressing a company's logic of earning money. It is a description of the value a company offers to one or several segments of customers and the architec-ture of the firm and its network of partners for creating, market-ing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams.

Nevertheless, to describe the business model component of the Market Engi-neering Framework, the model of Osterwalder is oversized for the scope of this work. Instead, the business model based of the frequently cited concept of Zer-dick et al. (2004, p. 37), Timmers (1998) and Stähler (2001) is used. They simi-larly identify value proposition, revenue model and value creation architectureas the main three components of a business model:

• Value Proposition: The value proposition of an organisation defines the pro-posed value for customers and partners participating in the value creation process (Stähler 2001, p. 43).

• Revenue Model: According to Skiera et al. (2005), the revenue model de-fines how an organisation generates revenues from its economic activities.


This can be further subdivided into revenue source, revenue partner and price model components with regard to commercialised products or services.

Figure 5.4: Revenue Model Framework (Skiera et al. 2005)

There are three types of revenue sources. Product represents the provision of products or services in exchange for monetary compensation. Contact de-notes the provision of an opportunity to contact customers for marketing purposes, and Information constitutes the provision of acquired knowledge about customers for Third Parties.

The revenue partner constitutes the party from which the revenue of a busi-ness is generated. This can be either the seller or buyer of a product or ser-vice. If the revenue source is provided by the seller of a product, it is as-sumed that the organisation acts in the role of an intermediary between both parties and charges the seller for its services.

The price model represents the price fixing method, which can either be in-teractive or non-interactive. Interactive pricing involves the interaction of sellers and buyers in the price fixing process (e.g. auctions). For non-interactive or static pricing respectively, the seller has to determine the price of a product or service.

• Value Creation Architecture: The architecture for the value creation of an organisation determines the interaction of the involved business partners in

Product Contact Information

Seller Buyer

InteractiveNon-

Interactive

Revenue

Source

Revenue

Partner

Price

Model


order to produce products and services (Stähler 2001, p. 43). In this regard, the value chain model developed by Porter (1998) applies. It consists of chain links of which each represents a distinct activity to create value for the cus-tomer. Figure 5.5 depicts a simplified model of the value chain based on Zer-dick et al. (2001, p. 33). It is assumed that the left end of the value chain is connected to the organisation’s suppliers, and the corresponding right end to its customers (Zerdick et al. 2001, p. 31).

Figure 5.5: Simplified Value Chain Model (based on Zerdick et al. 2001, p. 33)

Since in the scope of this work, the value creation in mobile media markets is modelled as an mobile attention value chain (cp. Section 3.2), the frequent criti-cism of this Porter model is that it is not being able to capture the complexity of today’s value creation in the Internet economy (Tapscott et al. 2000). However, since this work converts a value network into a value chain by the abstraction of all participants in the mobile media markets (cp. Section 4.1.4), which are not relevant in relation to the analysis of context information, this still allows the application of Porter’s value chain model.

5.3.3.2 Market Microstructure

Although, the market microstructure theory originates in the financial domain to study the exchanging assets in markets (Rose 1998, p. 72; Holtmann, p. 133), this work applies its theory in the sense of a resource allocation mechanism for context-sensitive mobile attention.

A resource allocation mechanism represents a protocol by which agents (i.e. market participants) can realise a solution to a resource allocation problem. Thereby, a mechanism maps messages or signals into a solution. For market-based mechanisms, a price is assigned to each resource in the form of money. Prices are non-negative numbers that determine the exchange value of resource

Investment Production Sales Billing Customer


in a market. They provide an aggregation of global information and enable agents to make rational decisions (Bichler 2001, p. 48).

In the context of this work, the resource allocation mechanism constitutes an institution. It is comprised of a set of rules, which define the way market partici-pants can communicate and interact in order to conduct market transactions. Trading rules define a language as possible messages the communication proc-ess in the form of the resource allocation, pricing as well as respective financial and good exchanges between the market participants. Access rules assign the traders, which are allowed to participate in the market and their respective trad-ing rights (Holtmann 2004, p. 133 ff.). Figure 5.6 depicts the comprising aspects of a resource allocation mechanism.

Figure 5.6: Process and Rules of a Resource Allocation Mechanism (based on Holtmann 2004, p. 133)

5.3.3.3 ICT-Infrastructure

The ICT-infrastructure comprises the underlying technology required to enable the operation of electronic markets. This involves information systems as the combination of software and hardware, including their architecture in order to conduct market transaction (Holtmann 2004, p. 190 f.). Thereby, the ICT-architecture of an electronic market can be typically based on the classic three-tier architecture for information systems (Edwards 1999, S. 4 ff.) (cp. Figure 5.7).

Start

Communication

Process

End

Access Rules

Allocation

Pricing

Trading Rules

Resourc

e A

llocatio

n M

echanis

m P

hase

s


Figure 5.7: Three-Tier Architecture of an Electronic Market (based on Holtmann 2004, p. 191 f.)

At the top of the ICT-architecture resides the presentation tier. It constitutes the interface for market participants to enable the submission of offers and requests for economic goods. Furthermore, the market operator is provided with an inter-face to administrate the electronic market. In the middle, the logic tier is respon-sible for the processing of market transactions (Lindemann and Schmid 1998). At the bottom, the data tier stores the required data about the market participants and transactions (Holtmann 2004, p. 192).

5.3.3.4 Interdependency of the Transaction Service Components

The outlined components of an electronic market exhibit possible interdepend-encies and consequently have to be designed in an integral way of viewing things. Although, there is an unknown list of potential interdependencies, market designers have to be aware of this fact and evaluate possible occurrences during the design process (Holtmann 2004, p. 138). In order to illustrate this issue, Fig-ure 5.8 exemplifies a possible set of interdependencies:

A market operator introduces combinatorial auctions as new resource allocation mechanism for selected products of their catalogue. Since the complexity of this auction protocol exhibits a higher complexity than their previous one, it requires a higher ICT-infrastructure performance (i.e. predominantly more computational

Presentation Tier

Data Tier

Logic Tier

Transaction and User Data Storage

Processing of Market Transactions

• Market Participants User Interfaces (Trading)

• Market Operator User Interface (Administrator)

Electronic Market Architecture


processing power). However, the provision of increased processing power typi-cally causes additional costs, which have to be compensated in the business model by raising the prices for the provision of the market transaction service. Thereby, higher fees for the usage of the market transaction service may swing back to reducing the number of market traders. This also may affect the market microstructure as well as the overall market outcome.

Figure 5.8: Possible Interdependencies between Electronic Markets Com-ponents

The outlined complexity of electronic markets and the interdependency of its components further indicate the need for a structured engineering process for the electronic markets (Holtmann 2004, p. 139).

5.4 Introduction of the Market Engineering Process Model

The design of electronic markets was traditionally a trial and error process. For this, the Market Engineering approach of Weinhardt et al. (2003) proposes a complementary engineering process model derived from the Service Engineer-ing discipline to enable a structured and goal-oriented design of electronic mar-kets. It allows systematic addressing of relevant market characteristics, enables an improved traceability of the market performance whilst fostering a higher quality for newly introduced electronic markets (Holtmann 2004, p. 139 f.).

Market Microstructure

Combinatory Auction

ICT Infrastructure

Computational Processing Power

Electronic Market

Business Model

Pricing of Transaction Service

Complex Resource

Allocation Mechanism

Higher

IT-Requirements

Fewer Market

Participants

Higher

Usage

Fees


According to Weinhardt et al. (2003), the Market Engineering process model can be divided into six consecutive phases, which roughly encompass require-ment analysis, design and implementation tasks (cp. Figure 5.9).

Figure 5.9: Market Engineering Process Model (based on Weinhardt et al. 2003)

The first phase of the process model is concerned with the identification of the electronic market stakeholders and their particular interests.

The consecutive phase constitutes the requirement engineering for the develop-ment of the electronic market. This comprises the evaluation of the socio-economic, technological, and legal environment in which the market is embed-ded. The results provide the foundation for an appropriate definition of the transaction object.

Based on the characteristics of a defined transaction object and the requirements gathered from the environment analysis, the market transaction service is de-signed – comprised of the market microstructure, business model as well as ICT-infrastructure.

Once the transaction object has been defined and transaction service imple-mented, the market design has to be tested for its economic performance based on the given design objective. This involves testing the functionality of the elec-tronic market software against its specification and its economic performance. For this, a set of methods range from welfare economic or game theory ap-proaches, to empirical lab or prototype evaluations (Neumann 2007, 169 ff.).

The final phase of the market engineering process constitutes the electronic market roll-out, operation and performance controlling. Market operation and performance controlling intuitively may to be not part of the market design

Design of

Transaction

Service

Roll-out

operation,

controlling

Definition of

Transaction

Object

Requirements

Engineering

based on

Market

Environment

Stakeholder

Identification

Implementation,

Test

Evaluation


process. However, the knowledge gathered from these activities, provides the foundation for the continuous and iterative re-evaluation and if applicable redes-igning of an electronic market.

Since the Market Engineering Framework, as well as its complementary engi-neering process model originally targeted electronic markets exchanging finan-cial assets, the last section of this chapter illustrates how this concept can be adopted for mobile media markets.

5.5 Adaption of the Market Engineering Framework for Mobile Media Markets

Since the Market Engineering Framework was originally developed for financial electronic markets, this section aims to show and enable its suitability for the development and documentation of engineering recommendations for mobile media markets. Whereas the complementary Market Engineering process model can be used without modifications, each component of the Market Engineering Framework (cp. Section 5.3) is evaluated and, if applicable, aligned or detailedly specified with regard to requirements of mobile media markets in the following sections.

5.5.1 Market Environment of Mobile Media Markets

The first component of the Market Engineering Framework represents the envi-ronment in which a market is typically embedded. It consists of a legal, socio-economic, and technologic environment component (cp. Section 5.3). Thereby, the Market Engineering Framework is able to capture the interdisciplinary as-pects especially relevant to mobile media markets (cp. Figure 5.10).


Figure 5.10: Mobile Media Market Environment

Mobile media markets are highly regulated by the European Union as well as their national authorities (European Parliament 1995 and 2002), exhibit distinct socio-economic aspects due to its very personal nature of mobile media (Sultan and Rohm 2005; Feldmann 2005, p. 60 f.), and require sophisticated ICT-infrastructures in order to enable mobile data communications (Schiller 2003, p. 16 f.).

5.5.2 Mobile Attention as the Transaction Object

Although, the Market Engineering Framework is able to represent two-sided electronic markets (Holtmann 2004, p. 178 f.), mobile media markets are two-sided markets on which two distinct goods (i.e. content and attention) are traded for each market side. Nevertheless, it can still be adapted to mobile media mar-kets. By following the attention economy paradigm, mobile attention is consid-ered the only economic good traded in mobile media markets. Thereby, the Mo-bile Marketing Provider acquires attention from mobile users on their own ac-count (i.e. on the content market) and adds value by enriching it with respective attention data about the mobile user. Finally, this attention is sold to the adver-tisers (i.e. on the advertising market). Consequently, mobile attention can be considered the only transaction object of this market. Since the original Market Engineering framework implicitly assumes that the transaction object is pro-vided by its seller, it has to be extended to include the acquisition of mobile at-

Legal EnvironmentEuropean and National

Regulations

Technologic EnvironmentSophisticated Infrastructure

enabling Mobile Media

Mobile Media Market

Environment

Socio-Economic EnvironmentPersonal Nature of

Mobile Media

Legal Environment

Technologic Environment

Electronic Market

Environment

Socio-Economic Environment


tention (cp. Section 3.3). Figure 5.11 depicts this extension of the Electronic Market Engineering Framework, with respect to the procurement of mobile at-tention.

Figure 5.11: Mobile Attention as the Transaction Object in Mobile Media Markets

5.5.3 Transaction Service for Mobile Media Markets

The three components of the transaction service of an electronic market corre-spond to that of mobile media markets as outlined in the following sections.

5.5.3.1 Business Model of Mobile Marketing Providers

The business model of Mobile Marketing Providers in operating a mobile media market platform can be described by the value proposition, the revenue model, and the architecture of value creation (cp. Section 5.3.3.1).

• Value Proposition: The value proposition of Mobile Marketing Providers operating can be twofold based on the considered perspective. From the tradi-tional perspective, Mobile Marketing Providers act in a two-sided mobile me-dia market serving two types of customers. On the content market, the Mobile Marketing Providers aims to satisfy immediate information needs of mobile users whereas on the advertising markets, they provide mobile media per-formance for advertisers.

By contrast, from the perspective of the attention economy and for the re-mainder of this work, the value proposition Mobile Marketing Provider con-

Mobile MarketingProvider

MobileUser

(Supplier) Delivery of

Mobile Content

Procurement of

Mobile AttentionAdvertiser

(Buyer)

Sale of

Mobile Attention(Transaction Object)

Monetary

Compensation

Mobile Media Market Engineering Framework

Aspects relevant for the Transaction Object

Electronic Market Engineering Framework

Aspects relevant for the Transaction Object


stitutes the provision of mobile attention for advertisers conducting Mobile Advertising campaigns.

• Revenue Model: The revenue model of Mobile Marketing Providers deter-mines how revenue is generated. Following the concept of Skiera (2005), as introduced in Section 5.3.3.1, the revenue model consists of revenue source, revenue partner and price model.

Since mobile content is assumed to be advertising-financed (cp. Section 2.1.2) and is offered free of charge to mobile users, the revenue source of Mobile Marketing Providers constitutes selling mobile attention to advertisers to con-duct Mobile Advertising campaigns (revenue source type: contact).

The revenue partner is the party (i.e. seller or buyer of a product) from which the revenue can be generated. Based on the previously identified revenue source of selling mobile attention, this party is the advertisers.

The pricing model represents the price fixing method. For mobile attention, this can be either interactive or non-interactive. Whereas interactive pricing involves the interaction of sellers and buyers in the price fixing process (e.g. keyword auctions), for non-interactive or static pricing (e.g. CPM pricing) re-spectively, the seller has to determine the price of a product or service (cp. Section 2.4.2.2).

• Architecture of Value Creation: The architecture of value creation of Mo-bile Marketing Providers is constituted by their mobile media market plat-form. It consists of mobile web presence as an interface to the mobile user (i.e. mobile portal) and a mobile media market component in charge of proc-essing the market transactions for mobile attention.

5.5.3.2 Mobile Media Market Resource Allocation Mechanism

For the allocation of mobile attention, the microstructure component constitut-ing the exchange rules for financial assets has to be replaced by or reduced to a traditional resource allocation mechanism for mobile media markets. While a concrete allocation mechanism has to be determined by a Mobile Marketing Provider based on their enabled Mobile Advertising campaigns, CPM and auc-tion based models are currently the most common implementations in the Mo-bile Marketing domain (cp. Section 2.4.2.2).


5.5.3.3 ICT-Infrastructure

According to Holtmann (2004, p. 192), the ICT-infrastructure of mobile media market platforms can be designed as a classic three-tier architecture consisting of user interfaces (presentation tier), transaction processing (logic tier) and transaction and user data storage (data layer). At this abstraction level, the same aspects also apply for the ICT-infrastructure of mobile media markets.

5.6 Summary

The analysis of the impacts of context information on the traditional commer-cialisation of mobile attention has revealed various aspects Mobile Marketing Providers need to address with regard to the engineering of their mobile media market platform. In order to develop and document these aspects in a structured, proven manner, a suitable market engineering framework for this objective has been evaluated.

After a brief introduction to electronic markets from an institutional perspective and the discovery of their multidisciplinary nature, a literature review on elec-tronic market frameworks as a superset of mobile media markets has been con-ducted in this field. As a result, the Market Engineering Framework by Weinhardt et al. (2003) was found to be most suitable. In combination with its complementary engineering process model, the Market Engineering Framework provides a structured and multidisciplinary, but holistic approach for the design of electronic markets. Although, the Market Engineering Framework was origi-nally developed for financial markets, it has been demonstrated that it could be adapted to develop and document engineering recommendation for mobile me-dia markets. The subsequent chapter presents the application of this reference model for this objective.

Engineering Recommendation Framework for Mobile Media Markets 133

6 Engineering Recommendation Framework for Mobile Media Markets

Based on the engineering model for mobile media markets adapted from the Market Engineering Framework of Weinhardt (2003), this chapter presents the developed IT artifact MoMeMa (mobile media market) in the form of an engi-neering recommendation framework for mobile media markets of context-sensitive mobile attention. It is supposed to provide the feasible means for Mo-bile Marketing Providers in order to take advantage of the benefits of context information for the commercialisation of mobile attention, while addressing its impacts (cp. Chapter 4).

It is developed and documented based on the activities of the complementaty Market Engineering process model. The outcome constitutes generic engineer-ing recommendations for mobile media market platforms rather than an actual operational implementation. Consequently, there is no concrete market design, which can be implemented, tested, and evaluated. Instead, Chapter 7 presents the prototypical implementation a mobile media market platform, which sup-ports a fictitious but realistic application scenario. It demonstrates the technical feasibility to pour the developed engineering recommendations into a software application. In addition, Chapter 8 provides the results of an empirical evalua-tion of the engineering recommendations by experts. Finally, the market rollout phase is omitted since developed engineering recommendations do not consti-tute an actual market (cp. Figure 6.1).

The actual MoMeMa framework is documented alongside the activities of its complementary engineering process model. Therefore, not all results are neces-sarily engineering recommendations. For the stakeholder identification activity, the specific stakeholders of mobile media markets, as well as the corresponding interests are documented rather than introducing a new or different method to identify the stakeholders. The same applies for the requirements engineeringactivity. Here, the market environment specifically for mobile media markets is described rather than aligning the requirements of the engineering process. By contrast, regarding the transaction object definition, a feasible definition for context-sensitive mobile attention is actually recommended. This continues for the design of the market transaction service. Thereby, design recommendations


for a business model, resource allocation mechanism, and ICT-infrastructure are provided.

Figure 6.1: Engineering Recommendation Framework as a foundation for the Development of the MoMeMa Framework

Section 6.1 begins with the presentation of the mobile media stakeholders and the discussion of their interests. Then, Section 6.2 continues to document the relevant characteristics of market environment in which mobile media markets are embedded. It comprises the socio-economic, technological, and legal envi-ronmental aspects.

Subsequently, Section 6.3 presents a feasible definition for context-sensitive mobile attention as a transaction object. It involves specifying its key character-istics, qualities, and treatment in the trading process. The engineering recom-mendations of the market transaction service are documented in the Section 6.4. Its main components constitute the business model, resource allocation mecha-nism as well as the underlying ICT-infrastructure.

Design of

Transaction

Service

Roll-out

operation,

controlling

Definition of

Transaction

Object

Requirements

EngineeringStakeholder

Identification

Implementation,

Test,

Evaluation

Transaction

Service

Design

Recommend.

(Chapter 6)

Roll-out

operation,

controlling

Context-

sensitive

Mobile

Attention

(Chapter 6)

Market

Environment

of Mobile Media

Markets

(Chapter 6)

Mobile Media

Market

Stakeholders

(Chapter 6)

Implementation,

Test (Chapter 7)

Evaluation

(Chapter 8)

Adapted Market Engineering Framework for Mobile Media Markets (Chapter 5)

Engineering Recommendation Framework for Mobile Media Markets of Context-sensitive Mobile Attention


Section 6.5 completes the engineering recommendation framework by discuss-ing its limitations from an academic and practical perspective. Finally, Section 6.6 concludes the chapter.

6.1 Mobile Media Market Stakeholders

Stakeholders represent groups of individuals with legitimate claims against an organisation. Therefore, the identification of possible stakeholders and the cor-responding analysis of their potential influence are crucial in order for an or-ganisation to archive their business mission (Post et al. 2002, p. 1 f.).

Following the defined analysis scope (cp. Section 4.1), the relevant stakeholders are the mobile users, advertisers, the Mobile Marketing Provider as well as the regulators. Their interests to be addressed towards the mobile media market can be characterised as follows:

• Mobile Users: Mobile users are individuals seeking means to satisfy their information, entertainment, and communication needs independently from current time and location. This can be archived by the provision of mobile content such as information, news, sports, lifestyle (information), mobile games, music, shopping and TV (entertainment) and mobile communities (communication). In this regard, available context information about mobile users enables the personalisation of this mobile content (Steimel et al. 2008, p. 41 ff.).

At the same time, mobile advertisements bundled to this content can be per-sonalised to the momentary usage situation of a mobile user as well (e.g. loca-tion, time, personal preferences, etc.). However, the application of context in-formation for this purpose may generate the risk of disturbing mobile users if the mobile advertisement is not relevant (Heinonen and Strandvik 2006). This is because mobile advertisements consume more attention than fixed online advertisements, and context-sensitive mobile advertisements may involve promoted POS, which a mobile user might be willing to actually physically visit (Albers 2007). In conclusion:

Mobile users being exposed to context-sensitive mobile advertis-ing campaigns claim to receive information highly relevant to their momentary usage situation.


• Advertisers: Advertisers are enterprises conducting Mobile Advertising campaigns. Typical objectives in this regard are the establishment of an addi-tional distribution channel to the customer, increasing the brand awareness of a product and the acquisition of new customers (Steimel et al. 2008, p. 33).

Advertisers willing to conduct context-sensitive Mobile Advertising cam-paigns are able to satisfy the immediate need of a mobile user in their mo-mentary situation. The applied context-sensitive mobile attention for their Mobile Advertising campaigns exhibits a lower reach at higher acquisition costs (cp. Section 3.2.1), which has to be compensated by higher targeting ef-fectiveness of Mobile Advertising campaigns. In conclusion:

Advertisers claim higher targeting effectiveness for the Mobile Advertising campaigns if they acquire context-sensitive mobile attention.

• Mobile Marketing Provider: Mobile Marketing Providers act in the role of intermediaries between mobile users and advertisers. For this, they acquire mobile attention for mobile users and sell it to advertisers. The provision of context information for advertisers allows them to differentiate from their competitors (offering only traditional Mobile Advertising campaigns) and to increase their profits. In conclusion:

The intrinsic aim of a Mobile Marketing Provider regarding the provision of context-sensitive mobile attention is to increase profits from their business and to differentiate from their com-petitors.

• Regulator: The European Union as regulator in the scope of this work is con-cerned with ensuring fair competition between Mobile Marketing Providers and the protection of their customers (in particular mobile users). In the scope of this work, a Mobile Marketing Provider offering context-sensitive mobile attention is considered a monopolist (cp. Section 4.1). This allows omitting any regulations regarding competitive law. Instead, the data protection direc-tives and its national implementations are considered significantly important since context information represents personal information about individual mobile users (European Parliament 1995). In conclusion:

The European Union and ultimately the national authorities as regulators claim to protect personal information of mobile users


and their privacy during and after their usage of services on the mobile Internet.

A comparison of the outlined stakeholder interests towards context-sensitive mobile attention reveals several conflicts of interests. The reasons for these con-flicts are two-fold but predominately originate from the application of context information for Mobile Advertising campaigns (cp. Figure 6.2).

Figure 6.2: Conflict of Interests in Mobile Media Markets for Context-sensitive Attention

On the one hand, mobile users disclose only as much context-sensitive attention data as they receive incentives (of any kind) in exchange. This generates con-flicts to the interests of advertisers, which demand the most comprehensive at-tention profiles possible about mobile users in order to archive a targeting effec-tiveness (cp. Section 4.3.1). On the other hand, mobile users only accept or do not feel disturbed by Mobile Advertising campaigns, if these are relevant to their momentary usage situation (Heinonen and Strandvik 2006). This may conflict

Advertiser 2

Mobile Marketing

Provider

Advertiser n

Advertiser 1

.

.

.

Limited

Disclosure

of Attention

Data

Maximising

Profits

Relevant

Attention of

Mobile

Users

Regulator

Compliance

regarding

personal data

usage

Mobile

User

Relevant

Mobile

Advertising

Campaigns

Comprehensive

Attention Profiles

Maintaining

Relevance

Context-sensitiveMobile Attention


with an advertiser’s possibly different and more commercially driven perception of which Mobile Advertising campaigns are relevant for mobile users36.

Furthermore, Mobile Marketing Providers are joining in on this conflict as they are aiming to increase or maximise their profits from operating the mobile media market platform. Intuitively, this objective translates to selling the mobile atten-tion of a mobile user to the highest bidder. However, this may conflict with the mobile users’ expectation of receiving relevant Mobile Advertising campaigns. For instance, the highest bidder (advertiser) may own a POS farther away than other relevant promoted POS of other advertisers. This may lead to a distur-bance of mobile users if they are directed to the most distant POS because its advertiser represents the highest bidder. Mobile users, as a consequence, may refuse to receive this kind of Mobile Advertising campaigns any further (Hei-nonen and Strandvik 2006).

Finally, the regulator has the objective to protect the personal information of mobile users. This conflicts with interests of Mobile Marketing Providers and advertisers. Both are aiming to acquire as much relevant context information as possible about mobile users. However, putting mobile users in control of their personal information may lead to the fact that mobile users only disclose the minimum amount of information required for the usage of the mobile applica-tion, or may demand more incentives from advertisers in exchange for the dis-closure of their personal information (Awad and Krishnan 2006).

The presentation of mobile media market stakeholders shows the interests, which a mobile media market platform needs to address and which respective conflicts of interests have to be negotiated. Based on this knowledge, the follow-ing section continues by outlining the market environment in which mobile me-dia markets are embedded.

6.2 Mobile Media Market Environment Requirements

The requirements engineering activity within the Market Engineering process model is concerned with the analysis of the market environment in which the mobile media markets are going to be embedded. It is comprised of socio-economic, technological, and legal components. The results of this analysis

36 For instance, the perception of the term “in close vicinity” may divert between mobile us-

ers and advertisers.


document the general requirements to be addressed by market designers for the development of a mobile media market platform of context-sensitive mobile at-tention.

6.2.1 Social-Economic Environment

Social-economics are concerned with the relationship between economic activi-ties and social life of individuals (Schubert 1997). For mobile attention for Mo-bile Advertising campaigns, the socio-economic impacts are driven by the his-torical development of the mobile medium and its impact on individuals in re-cent years (Feldmann 2005, p. 60 f.).

Access to the mobile Internet represents more than just substituting a fixed ter-minal device (e.g. PC) by a mobile device. Instead, it allows voice and data communication for mobile users to be independent from the time and location on a 1to1 basis (cp. Section 2.4.1). Mobile devices typically belong to an indi-vidual person and they are not shared among others. This makes mobile users permanently reachable to other individuals as well as service providers (cp. Sec-tion 2.5). With the capability of mobile devices to store personal information (e.g. contacts, photos, text messages, etc.), they increasingly represented the digital identity of its owners. Thereby, the mobile medium becomes deeply inte-grated into the personal sphere of mobile users and is now the most personal communication medium existing (Sultan and Rohm 2005; Feldmann 2005, p. 60 f.).

The utilisation of these characteristics offers a unique opportunity and at the same time high risk for advertisers. The very personal nature of the mobile me-dium allows acquiring highly valuable attention of mobile users in their momen-tary usage situation. Consequently, in a society of information overflow, this mobile attention represents a very scarce good. On the contrary, there is high potential of disturbing mobile users with irrelevant or intrusive mobile adver-tisements due to the very personal nature of the mobile medium (cp. Section 2.5). In conclusion, Mobile Marketing Providers offering context-sensitive mo-bile attention to advertisers have to ensure the relevance of the corresponding Mobile Advertising campaigns for mobile users.


6.2.2 Technological Environment

The technological environment comprises state-of-the-art information and communication technology available for enabling the operation of an electronic media market. In order to acquire the ICT requirements of a mobile media mar-ket platform as an information system, it is modelled based on the classic three-tier architecture, which constitutes a minimal structure for information systems (Edwards 1999, p. 4 ff.). Consequently, its technical requirements comprise cli-ent access for mobile users and advertisers to the market (presentation tier), the processing of market transactions (logic tier) as well as the access to and storage of context-sensitive attention data (data tier).

6.2.2.1 Market Access for Clients

Unlike financial electronic or other electronic markets, buyers and sellers of mobile attention in mobile media markets are never of the same entity. In other words, advertisers always acquire mobile attention and mobile users always selltheir attention. For this, Mobile Marketing Providers have to consider different types of access to their mobile media market platform:

• Mobile Users: First, given a suitable mobile network coverage and band-width, mobile portals have to be capable of supporting the mobile device type of a mobile user (cp. Section 2.4.2.1). In contrast to the fixed Internet, which is predominantly accessed via PCs or notebooks, each class of mobile devices exhibits its own hardware capabilities such as display size or mobile operation system (Steimel et al. 2008, p. 50 f.). Mobile Marketing Providers have to ad-dress these issues by an appropriate design of their mobile portals.

• Advertisers: Advertisers need an interface to the mobile media market plat-form for the management of the Mobile Advertising campaigns. This involves the specification of the Mobile Advertising campaign contents (i.e. marketing message), management of targeting profile and marketing budget as well as performance measurement of conducted Mobile Advertising campaigns. For instance, currently large Mobile Marketing Providers (e.g. Google, Yahoo, etc.) provide advertisers the ability to manage their Mobile Advertising cam-paigns via an Application Programming Interface (API) (Google Corporation 2009g; Yahoo Corporation 2009c).


6.2.2.2 Processing of Market Transactions

Mobile users expect their requested mobile content to be displayed in a rela-tively short period of time. Otherwise, they are likely to discontinue the usage of this service (Nah 2004). Consequently, Mobile Marketing Providers need to en-sure the processing of market transactions for context-sensitive mobile attention to the respective advertisers without notable delay. Therefore, the appropriate processing power has either to be provided in-house (i.e. from Mobile Market-ing Provider) or to be acquired from external providers (i.e. outsourced).

Currently, the leading search engine providers Google, Yahoo and Microsoft demonstrate with their advertisement-financed search products that real-time processing with complex algorithms for millions of accessing users is feasible (Google Corporation 2009c, Yahoo Corporation 2009a , Microsoft Corporation 2009b). Whereas these organisations have the capability to host their own ICT-infrastructure, smaller more specialised organisations may choose services of-fered in or by the cloud.

Cloud computing denotes computing services provided by specialised service providers, which are hosting large globally distributed data centres (Schmidt 2008). According to its requirements, a Mobile Marketing Provider can acquire a range of cloud services, which is delivered via the Internet. At the lowest level, this is a hosted conglomerate of servers offered and accessed in virtualised form (infrastructure as a service). On top of these platform services, an environment for design, development, testing, deployment, and hosting of individual applica-tion (platform as a service) is available. Finally, at the highest level, full soft-ware applications can be licensed (software as a service)37.

6.2.2.3 Context Information about Mobile Users

Market transactions for mobile attention requires context information about mo-bile users in order to enable the targeting of Mobile Marketing campaigns for advertisers. While the primary context information location, identity, access time, and activity is provided by the mobile network (cp. Section 4.1.2), the fol-lowing secondary context information can currently be acquired by Mobile Marketing Providers:

37 For a comprehensive overview on available cloud services, refer to the market leader

Amazon (Amazon Corporation 2009).


• POS related information (derived from Location): Based on the location of a mobile user, a large variety of secondary context information is offered by specialised service providers. Currently, this information mainly consists of POS locations for restaurants, ATMs, bars, or pharmacies and the opportunity to determine the POS distance of a mobile user (Steimel et al. 2008, p. 26 f.; Tweakersoft 2009).

• Remaining Visiting Time (derived from Access Time): Currently, the ac-cess time of mobile users is only used for the time-based delivery of SMS-based mobile advertising messages to a mobile user38. However, further bene-ficial secondary context information, such as opening times for individual POS is to the best knowledge of the author not available yet.

• Personal User Profiles (derived from Identity): Based on the determined identity of mobile users, Mobile Marketing Providers are able to query in ad-vance disclosed preferences of mobile users to target and personalise Mobile Advertising campaigns. This information is most commonly used in mobile communities where users actively disclose their identity profiles and are sub-sequently matched with other mobile users exhibiting similar preferences (Loopt Corporation 2009; Belysio 2009; GyPSii Corporation 2009). By con-trast, Mobile Marketing Providers automatically acquiring the identity of mo-bile users from the mobile network to personalise Mobile Advertising cam-paigns is currently to the best knowledge of the author not available.

• Immediate Need (derived from Activity): Based on the online behaviour of mobile users observed by tracking and interpreting entered search queries in search engines, filled out web forms, clicked links, etc., the immediate need of a mobile user in their momentary usage situation can be derived.

6.2.3 Legal and Regulatory Environment

Besides the general legal aspects in Europe to which each commercial organisa-tion has to comply with, the EU issued several directives for the protection of

38 For instance, Orange Wednesdays is a Mobile Advertising campaign, which sends cross

selling offers (e.g. information on the DVD version) to cinema visitors, shortly after a movie has ended (Orange Corporation 2009).


personal data of individuals. Those directives are implemented by its member states and consequently have to be respected by Mobile Marketing Providers.

The main objective and scope of the data protection directive is to regulate the processing of personal data in order to protect the privacy of individuals. Per-sonal data is defined as “any information relating to an identified or identifiable natural person (data subject); an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural, or social identity” (European Parliament 1995). In addition, processingdenotes “any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organi-sation, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction” (European Parliament 1995).

In this regard, personal data can only be processed only if one of the following condition categories applies:

• Transparency: The data subject has the right to be informed, when personal data is processed and has to give their consent. Furthermore, the data subject has the right to access all personal data processed about them. They can also demand the deletion or blocking of data that is inaccurate or not processed ac-cording to the data protection rules (European Parliament 1995).

• Legitimate Purpose: Personal data can only be processed for the declared and legitimate purpose and must not be processed otherwise (e.g. unauthor-ised transfer of personal data to Third Parties) (European Parliament 1995).

• Proportionality: Personal data may only be processed adequately and rele-vant for the given purpose (European Parliament 1995). This means that per-sonal data has to be complete, accurate and does not contain more information than required for the given purpose. Furthermore, personal data should no longer be linkable to an individual than necessary for the given purpose.

Because the Data Protection Directive is considered not to provide sufficient legal protection in the sector of electronic communications, the EU has decided to supplement this directive with the directive 2002/58/EC. With the publication of this so-called E-Privacy Directive, the former Data Protection Directive only


applies in situations, which are not covered by the E-Privacy Directive (FIDIS 2007a).

The E-Privacy Directive is specifically concerned with processing personal data in the electronic communications sector. It “harmonises the provisions of the Member States required to ensure an equivalent level of protection of fundamen-tal rights and freedoms, and in particular the right to privacy, with respect to the processing of personal data in the electronic communications sector and to en-sure the free movement of such data and of electronic communication equip-ment and services in the Community” (European Parliament 2002, Art. 1).

In order to comply with these directives or its national implementation respec-tively, Mobile Marketing Providers enabling context-sensitive Mobile Advertis-ing campaigns have to first identify the nature of their used primary context in-formation. Therefore, they have to determine if context information about mo-bile users constitutes either personal or traffic data for Mobile Advertising cam-paigns.

Whereas the definition for personal data from Data Protection Directive still ap-plies, traffic data “... means any data processed for the purpose of the convey-ance of a communication on an electronic communications network or for the billing thereof” (European Parliament 2002, Art. 2). Depending on the type of processed data, different requirements have to be addressed. For personal data, the already outlined requirements of the Data Protection Directive apply. By contrast, for traffic data the following main requirements according to the E-Privacy Directive are relevant (FIDIS 2007a):

• Communications and related traffic data has to be confidential. This means eavesdropping, wiretapping, storage, or other kinds of interception or surveil-lance of communications is prohibited without the consent of the users con-cerned.

• Traffic data relating to subscribers or users, stored by the provider of a public communication network, or publicly available electronic communication ser-vice have to be erased or to be made anonymous, once it is no longer needed.

• Traffic data, which constitutes certain application contexts of personal data has to be treated as stated in the Data Protection Directive.


Although, the existing discussion and interpretation of these directives shows the actual complexity of classifying processed data as personal or traffic data (FIDIS 2007a), the following basic classification indicators have been developed for context information with the scope of this work:

• Identity: The identity of mobile users in the form of the MSISDN is available at least to the mobile network operator once a mobile user accesses the mobile Internet. The MSISDN denotes a worldwide unique number which can be di-rectly linked to the SIM-card of a mobile subscriber (Turowski and Pousttchi 2004) and consequently constitutes personal data in line with the Data Protec-tion Directive.

• Location: The E-Privacy Directive defines location data as “any data proc-essed in an electronic communications network, indicating the geographic po-sition of the terminal equipment of a user of a publicly available electronic communications service” (European Parliament 2002). In this regard, the FIDIS deliverable (FIDIS 2007a) shows the complexity and issues of this definition for service providers:

Depending on the application context, location data can be personal data (if linkable to an individual), can be traffic data (if anonymous and not directly used for value added services), or can be solely location data (if used for value added service and anonymous).

• Access Time: The issue of characterising the nature of the access time of mo-bile users to certain mobile services or applications is that the E-Privacy di-rective did not specifically define this concept. However, by following the definition of personal data in accordance with the Data Protection Directive, it can be derived that like location data, the access time of mobile users to the mobile Internet can be personal data once it is linkable to them.

• Secondary Context Information: As stated earlier, additional information about mobile users derived from primary context information is considered secondary context information. Therefore, it can be stated that if primary con-text information about mobile users in a certain application context represents personal data, then consequently the derived secondary context information is personal data as well. For instance, if the location of a mobile user consti-tutes personal data during the usage of a location-based service, also the POS distance of a mobile user constitutes personal data.


In summarising the previous discussion, the FIDIS Deliverable (FIDIS 2007a) has developed a checklist for service providers in order to find a basic orienta-tion, which directives and corresponding articles apply to them. Aligned to the needs of Mobile Marketing Providers, the checkpoints questioned are as fol-lows:

• Is the data to be processed “personal data”? (cp. E-Privacy Directive, Art. 2a)

• Is the data to be processed “traffic data”? (cp. E-Privacy Directive, Art. 2b)

• Is the data to be processed “location data”? (cp. E-Privacy Directive, Art. 2c)

• Does the data relate to users or subscribers of public communications net-works or publicly available electronic communication services? (cp. E-Privacy Directive, Art. 6).

• Are exceptions such as access for national security and law enforcements ap-plicable? (cp. Data Protection Directive, Art. 13 and E-Privacy Directive, Art. 15)

Based on the general requirements for mobile media market platforms, acquired from the market environment analysis, and based on the identified impacts of context-sensitive mobile attention in Chapter 4, the following section defines context-sensitive mobile attention as a transaction object in mobile media mar-kets.

6.3 Definition of Context-sensitive Mobile Attention as a Transaction Object

The economic good to be traded in mobile media markets constitutes context-sensitive mobile attention. In order to make it tradable, it has to be defined as a transaction object. Thereby, an interface between the immutable mobile media market environment and the market transaction service is established (Holtmann 2004, p. 136). The corresponding tasks are the specification of the good’s key characteristics (e.g. attention profile attributes), which quality criteria has to be met (e.g. required attention data) and how it is treated in the actual trading proc-ess (e.g. how often to be sold) (Holtmann 2004, p. 137).

However, mobile attention is not directly offered on mobile media market by mobile users. Instead, it has to be acquired by Mobile Marketing Providers first and then is sold on their own account to advertisers (cp. Section 5.5.2). For that, this chapter begins to address the procurement process for context-sensitive mo-


bile attention (cp. Section 6.3.1) and then continues to define mobile attention as a transaction object (cp. Section 6.3.2) as well as its related trading rules (cp. Section 6.3.3).

6.3.1 Acquisition of Context-sensitive Mobile Attention

The acquisition of context-sensitive mobile attention depends on the provision of mobile content in order to attract the attention of mobile users and requires the acquision of context-sensitive mobile attention data.

6.3.1.1 Provision of Mobile Content

Mobile attention cannot be acquired on procurement markets like other goods. Instead, it has to be acquired indirectly by attracting mobile users with the provi-sion of mobile content (cp. Section 2.1.2). In this regard, three basic types of mobile content can be distinguished based on its producer (Lindic 2009):

• Editorial Content: This is the traditional type of content (e.g. news, enter-tainment, product information, etc.), which is typically professionally created by specialised content providers (e.g. news or media agencies).

• User-generated Content: The Web 2.0 trend in the past years has fostered the emergence of a plethora of online and mobile media platforms, which en-abled users to create their own content in the form of blogs, social networks, wikis, photo/video sharing, product reviews or virtual worlds.

• Advertiser Content: Mobile content can also originate from advertisers themselves. For instance, branded content denotes advertiser produced media content, which aims at blurring the difference between advertisements and en-tertaining content (e.g. mobile ad-games) (Feldmann 2005, p. 22). Further-more, business directories often referred to as Yellow Pages represent adver-tisements as well as content satisfying informative needs of users (cp. AT&T Inc. 2009).

Intuitively, mobile attention attracted by advertiser-generated content sup-posedly provides the highest value for advertisers. On the one hand, mobile users actively request these advertisements under the assumption that it is able to satisfy their information needs (e.g. need for a restaurant in close vicinity). On the other hand, the full attention of a mobile user is dedicated to the adver-


tisements since they represent the main mobile content and are not comple-mentary to regular mobile content.

At the same time the mobile attention of mobile users is acquired, the comple-menting attention data has to be gathered as well.

6.3.1.2 Acquisition of Attention Data

The value of the economic good mobile attention is significantly determined by its complementing attention data about mobile users. Consequently, the aim of Mobile Marketing Providers has to be to acquire the appropriate quality of atten-tion data required for the effective targeting of Mobile Advertising campaigns. Since context-sensitive mobile attention data has to be explicitly disclosed by mobile users, Mobile Marketing Providers have to encourage the latter to do so (cp. Section 3.2.1). For this, the following sections outline possible means for this objective.

6.3.1.2.1 Mobile User Incentives to Disclose Mobile Attention Data

Although, Awad and Krishnan (2006) show that the willingness to disclose per-sonal information significantly depends on several individual characteristics of users (e.g. privacy concerns, gender, education, income, etc.), Kobsa (2007) pre-sents the following general incentive concepts, which Mobile Marketing Provid-ers can evaluate for their mobile media market platform:

• Personalisation of Mobile Content: The personalisation of mobile content based on acquired mobile attention data saves mobile users search costs whereas its value can immediately be perceived (e.g. local weather reports, personalised news, etc.).

• Social Adjustment Benefits: Adding social features to mobile content allows mobile users to establish a social identity within a mobile community. For this, the mobile users are required to disclose personal information about themselves to the community.

• Monetary Incentives: Mobile coupons or raffles are used to direct the mobile user’s attention to a certain product or brand while acquiring mobile attention data.


6.3.1.2.2 Mobile Identity Management

According to Friberg (2007, p. 23) several studies suggest that the ability of online users to control their personal information is directly related to their pri-vacy concerns. In this regard, the introduction of a Mobile Identity Management System (MIdMS) allows mobile users to manage and control their personal data. Furthermore, several value added services for the usage of the mobile portal can be provided for mobile users as well (FIDIS 2005b, p. 8).

The primary functions of IdMS or MIdMS respectively “... are creating, manag-ing, manipulating and deleting of digital (partial) identities and the correspond-ing roles of a user” (FIDIS 2009b, p. 34). The corresponding manipulation of an identity involves adding, changing, and deleting attributes such as name, postal or e-mail address (FIDIS 2009b, p. 34). Based on this core functionality, further features can be provided, which support the mobile user in protecting their pri-vacy in mobile advertising contexts (FIDIS 2005b, p. 11 f.):

• Partial Identities: Without the attempt to define the concept of identity39, the concept of partial identities can be described as conglomerates of characteris-ing attributes of an individual person, which are required in a certain applica-tion context. On the one hand, this allows a mobile user to disclose only that personal data necessary to use a certain mobile service. On the other hand, it allows creating multiple identities and switching between them based on their current usage context (e.g. personal vs. business context) (FIDIS 2005c, p. 35 f.).

• Pseudonymity of Personal Data: MIdMS allows hiding the real identity of a mobile user as well as avoiding the link-ability of their used partial profiles. Instead of their real identity, mobile users retrieve a pseudonym for each par-tial identity. This becomes especially beneficial since theoretically mobile us-ers can be automatically identified by mobile network providers via their unique MSISDN (FIDIS 2005b, p. 25 f.).

• Definition of Privacy Policies: Privacy policies give mobile users the ability to control the use of their personal data by giving or refusing their consent during a service usage (FIDIS 2005b, p. 47 f.).

39 For more details on the concept of identity refer to the FIDIS deliverable Identity of Identi-

ty: Models (FIDIS 2005a).


While the previous features enable mobile users to manage their personal data, the following features aid them to disclose this data in a convenient but con-trolled manner:

• Single-Sign-On (SSO): This feature stores authentication information of mo-bile users for different services. At the beginning of an online session, a mo-bile user has to be authenticated only once to SSO service. From that moment on, for each accessed mobile service known to the SSO service, the mobile user is automatically authenticated until they finish their online session (FIDIS 2005d, p. 28).

• Form Auto-Completion: The auto-completion-assistant or form filler respec-tively aids mobile users to complete mobile web-forms such service registra-tions or checkout forms. Compared to the SSO feature, this functionality re-duces the input effort of mobile users even more (Rukzio et al. 2008).

In addition to theses value-added services, two other MIdMS functions make the usage of mobile attention data for Mobile Advertising campaigns transparent to mobile users (FIDIS 2005b, p. 12):

• History Management: History management allows mobile users to keep track of their engaged interactions and service usages of the past as well as their corresponding disclosed personal data. Thereby, it constitutes an impor-tant functionality for mobile users to monitor the usage of their personal data and contributes to privacy policy management.

• Context Monitoring: MIdMS can support a mobile user in the use of the ap-propriate partial identity and the disclosure of the necessary personal data for a mobile service. For instance, a mobile user might not have concerns reveal-ing their current physical location in a business setting but may refuse to do so in a private context. The monitoring of their current context allows the automatic selection of the appropriate privacy policy.

6.3.1.2.3 Transparency for Context-sensitive Mobile Advertising Campaigns

On a general level, history management and context monitoring make the usage of attention data transparent for mobile users. However, it is also important to make the processing of personal data transparent within a mobile application. This fosters the establishment of a trusted relationship between the Mobile Mar-


keting Provider and mobile users along with the disclosure of personal data (Friberg 2007, p. 64 ff.; Radmacher 2007a).

Due to the personal nature of the mobile medium and the resulting sensibility of the personal data of mobile users, these measures are significantly more impor-tant than in the stationary online medium. For Mobile Marketing Providers, this can translate to the following measures for Mobile Advertising campaigns:

• Trusted Advertisers: Advertisers can be evaluated regarding the correctness of statements in their context-sensitive Mobile Advertising campaigns. For instance, for a POS, this may concern its geographic location, opening times, and the promoted products. Since this promoted POS is physically visited by mobile users, wrong or inaccurate information (e.g. a supposedly open POS is closed) may lead to the disturbance of mobile users and in the worst case to the refusal to use the mobile portal (Kobsa 2007).

• Transparent Targeting of Mobile Advertising Campaigns: Due to the con-text-sensitiveness of the Mobile Advertising campaigns, it is important to ex-plain why it is considered relevant to a mobile user (e.g. because of the close POS vicinity). This increases a mobile user’s trust in the relevance of a Mo-bile Advertising campaign and prevents privacy concerns due to opaque per-sonal data usage of Mobile Marketing Providers (Radmacher 2007a).

Once attention data has been acquired from mobile users, Mobile Marketing Providers have to produce attention profiles to make the good mobile attentiontradable in mobile media markets.

6.3.2 Transaction Object Definition and Production

In order to make mobile attention a tradable good, its characteristics and quality have to be assessable for advertisers. Thus, the acquired attention data about mobile users has to be converted to mobile attention profiles, which reflect their current usage situation. This requires the development of a suitable representa-tion form, which is able to establish a common semantic understanding about mobile attention profiles among all market participants (cp. Section 4.3.3). For this, a formal data model with a syntactic definition of context-sensitive atten-tion mobile profiles and commonly understood semantics is proposed. A con-ducted literature review reveals the following two main concepts for this objec-tive:


• Product Catalogues: Transaction objects in electronic markets are often specified by electronic product catalogues. These describe all the items for sale and consist of fixed formats and syntax (Schmid 1999, p. 18). However, electronic product catalogues are not very flexible when it comes to new in-formation (e.g. dynamic mobile attention profiles).

• Ontologies: A more sophisticated concept represents an ontology. It is a for-mal specification of a set of concepts within a domain and the documentation of the relationships between those concepts. Common objects are instances and classes, attributes of classes and instances, functions and processes with relationships to classes and instances, etc. (Daconta et al. 2003, p. 167). The implicit manner of knowledge representation allows addressing the required semantic flexibility for context-sensitive mobile attention profiles.

For targeting the Mobile Marketing campaigns based on context-sensitive mo-bile user profiles, Figge (2007, p. 86 ff.) developed an ontology which is re-ferred to as semantic identity concept (SIC). Consisting of three sub-ontologies, it is capable of representing the momentary usage situation of mobile users based on the sub-ontologies identity, location, and time. First, the identity ontol-ogy describes the typical characteristics of mobile users relevant to advertisers (e.g. gender, age, occupation, education, or personal interests). Furthermore, the location ontology reflects the current location of a mobile user using geo-coordinates as well as additionally derived secondary information such as city, county, country etc. The time ontology describes the current time of day and de-rives further secondary information such as the day of the week, public holiday, or lunchtime. Figure 6.3 depicts the SIC, which is implemented based on the semantic web, description logic and first order logic.


Figure 6.3: Semantic Identity Concept and relevant Sub-Ontologies for the Description of the Usage Situation of Mobile Users (Figge 2007, p. 87)

Whilst SIC is able to establish a common understanding between the market par-ticipants and allow the electronic matching of SIC-based attention profiles with the respective targeting profiles, it currently does not cover the following as-pects, which are relevant in the scope of this work for describing context-sensitive mobile attention:

• Activity of Mobile Users: Context information in the scope of this work also includes the activity of a mobile user attempting to satisfy the information needs in their momentary usage situation (e.g. submitting a search query). This is significantly important because the mobile Internet is accessed pre-dominantly for spontaneous needs rather than on a regular basis like the fixed Internet (Feldmann 2005, p. 108 f.). For the fixed Internet, longer online time of users allows behavioural targeting approaches in order to determine the in-tentions of an online user (Hegge, p. 289 f.) whereas the mobile Internet bene-fits the actvity of a mobile user.

• Quality Information about Context-sensitive Attention Data: Due to the highly varying nature of context information (cp. Section 4.3.1), it is impor-tant to provide quality information about context information such as location accuracy about mobile users. This allows advertisers a more accurate assess-ment of the offered mobile attention. Therefore, the quality of context infor-

Context

Identity Location

D

A G

EV

A C

E

Time

H

A G

J


mation positively correlates to the WTP of advertisers (Figge and Theysohn 2006).

• Privacy Policies for the Use of Context Information: Because context-sensitive mobile attention data has to be explicitly disclosed by mobile users, they have to be able to express their explicit willingness to do so (FIDIS 2007b). Consequently, mobile attention profiles have to include privacy poli-cies, which Mobile Marketing Providers have to abide. For instance, a mobile user could knowingly blur or even completely disguise their current location for privacy reasons (FIDIS 2007b).

Consequently, the SIC is extended to meet the outlined requirements as well. A corresponding proposed context-sensitive attention profile model is illustrated by Figure 6.4.

Figure 6.4: Model for Context-sensitive Mobile Attention Profiles

From each type of primary context information (identity, location, time, activ-ity), several other types of secondary context information (A, B, C) can be de-

Context

Identity

A CB

1

P Q P Q P Q

Location

A CB

1

P Q P Q P Q

Time

A CB

1

P Q P Q P Q

Activity

A CB

1

P Q P Q P Q

1: Primary Context Information

A,B,C: Secondary Context Information

P: Privacy Policy, Q: Context Quality Information


rived. For each type of secondary context information, a privacy policy (P) as well as context quality information (Q) can be specified40.

In order to establish a common understanding of context-sensitive mobile atten-tion profiles between the mobile media market stakeholders, the application of existing identity standards is recommended. Although, there is a portfolio of ex-isting standards for the representation of a person (FIDIS 2005a, p. 40), there is currently no standard available to model the momentary usage situation of mo-bile users for the targeting Mobile Advertising campaigns.

Finally, the acquired attention data has to be compiled to a context-sensitive at-tention profile based on the previously outlined model. Figure 6.5 briefly illus-trates this process, which is less complex compared to traditional Mobile Adver-tising campaigns because of the non-statistical nature of context-sensitive atten-tion profiles.

Figure 6.5: Compilation Process of Context-sensitive Attention Profiles

The compilation process consists of two major activities. First, the acquired mo-bile attention data is converted into uniform data format for each type of atten-tion data. Secondly, the resulting attention data is compiled to a context-

40 The concrete specification for context-sensitive mobile attention is determined by the cor-

responding characteristics of Mobile Advertising campaigns, enabled by a Mobile Market-ing Provider. However, these aspects will not be addressed in the scope of this work.

Attention Data Uniform Data Format

Source 1

Source 2

Source n

.

.

.

Data

Attribute 1

Data

Attribute 2

Data

Attribute n

.

.

.

Attention Profile

.

.

.

Attribute 1

Attribute 2

Attribute n

Data

ConversionData

Compilation


sensitive mobile attention profile based on the defined mobile attention profile model (i.e. transaction object definition) of a Mobile Marketing Provider. This includes the integration of context quality information, as well as the application of privacy policies as specified by the mobile user.

Subsequent to the definition of context-sensitive mobile attention as transaction object and production of its profiles, the trading rules recommended for context-sensitive mobile attention are discussed.

6.3.3 Trading Rules

Finally, the way context-sensitive mobile attention as a transaction object has to be treated in the actual trading or transaction process is specified. Based on the analysis of the impacts of context information on the traditional commercialisa-tion of mobile attention (cp. Section 4.3.3), the following trading rules for Mo-bile Marketing Providers are recommended:

• Sell high while minimise unsold Inventory: Like traditional products, con-text-sensitive mobile attention is supposed to be sold at the highest possible (optimal) price to advertisers. However, Mobile Marketing Providers need to minimise their unsold inventory of mobile attention since it is not a storable good (cp. Section 3.1) and invested acquisition costs would be lost (Bohte et al. 2004). Consequently, an allocation mechanism is required, which allows advertisers to propose their individual WTP for the specific attention of a mo-bile user and unsold mobile attention due to static prices can be avoided.

• Limit Number of Mobile Attention Buyers (Advertisers): Mobile attention can only be sold as many times as a mobile user is capable of cognitively processing multiple mobile advertisements displayed at once (cp. Section 3.1). Although, this fact depends on the individual capability of mobile users as well as on the design of Mobile Advertising campaigns, it still applies tough. Thus, the WTP of advertisers will decrease with the increasing number of advertisers. Thereby, for Mobile Marketing Providers the challenge re-mains to find the right balance between these two dimensions (cp. Figure 6.6).


Figure 6.6: Exemplified Development of Mobile User’s Attention Span in relation to the Number of delivered Mobile Ad-vertisements

• Avoid Disturbance of Mobile Users: Due to the high potential of disturbing mobile users with irrelevant offerings or promotions (Heinonen and Strandvik 2007), Mobile Marketing Providers have to maintain a certain relevance of Mobile Advertising campaigns for mobile users (cp. Section 4.3.3). However, solely advertisers themselves are aware of the actual relevance of mobile at-tention for their Mobile Advertising campaigns. Thus, Mobile Marketing Pro-viders can only determine the relevance on a high abstraction level and only relative to other competing advertisers41. A feasible solution for this objective is discussed in Section 6.4.2.

Based on the definition of context-sensitive mobile attention as a transaction ob-ject and the outlined requirements gathered from the mobile media market envi-ronment, the engineering recommendations for the market transaction service are presented in the following section.

41 Search Engine Marketing Provider Google successfully demonstrates such an approach by

adjusting the auction bid for keywords with advertisement quality factors (e.g. current ad click-rate) (Google Corporation 2009c).

Number of Advertisers

Mobile User‘s

Attention toAdvertise-

ments


6.4 Design of the Transaction Service for Mobile Media Markets

The heart of the engineering recommendation framework for mobile media mar-ket platforms constitutes the design of market transaction service. It enables market transactions for context-sensitive mobile attention between Mobile Mar-keting Providers and advertisers. Following the Market Engineering framework introduced and adapted in Chapter 5, the transaction service comprises a busi-ness model, resource allocation, and ICT-infrastructure component, which are presented in the following sections.

6.4.1 Business Model

The business model of a Mobile Marketing Provider operating a mobile media market platform is comprised of its value proposition, revenue model, and archi-tecture of value creation.

6.4.1.1 Value Proposition

The value proposition of Mobile Marketing Providers constitute the provision of context-sensitive mobile attention for the conduction of Mobile Advertising campaigns by advertisers. In this regard, context-sensitive attention mobile pro-files allow advertisers to assess the relevance of individual mobile users, and acquired context-sensitive mobile attention enables advertisers to target their Mobile Advertising campaigns to the momentary usage situation of mobile us-ers.

6.4.1.2 Revenue Model

The revenue model of a Mobile Marketing Provider determines the way revenue is generated. Following the concept of Skiera (2005), the revenue model consists of revenue source, revenue partner and price model (cp. Section 5.5.3.1).

The revenue source of Mobile Marketing Providers constitutes the acquisition of context-sensitive mobile attention from mobile users and its subsequent sale to advertisers. Consequently, the revenue source type is Contact (i.e. the genera-tion of contacts to mobile users for advertisers). The revenue partner is the ad-vertiser as the buyer of mobile attention. Whereas the recommended revenue source and revenue partner for context-sensitive mobile attention does not differ from its traditional equivalent, the pricing model or mechanism respectively does significantly.


For traditional Mobile Advertising campaigns, mobile attention is predomi-nantly statically priced based on the CPM model (Steimel et al. 2008, p. 24). Consequently, the optimal pricing has to be determined by Mobile Marketing Providers only for large homogenous audience groups described by static tradi-tional mobile attention profiles.

By contrast, the volatility of context-sensitive mobile attention profiles and their capability to describe the usage situation of very small groups or even individual mobile users (cp. Section 2.5.3), would make the determination of an optimal static price a highly inefficient planning problem for Mobile Marketing Provid-ers. In other words, a corresponding static pricing mechanism would require de-termining the maximal WTP of an advertiser for each individual mobile user, based on their current context-sensitive attention profile (Albers 2007).

In order to reveal an advertiser’s WTP for the context-sensitive mobile attention of a mobile user, pricing mechanisms, which allow advertisers to express their individual valuation (e.g. in the form of an active price proposal) has to be im-plemented. Those pricing mechanisms are referred to as interactive, dynamic pricing mechanisms (Skiera 2005). In this regard, dynamic denotes the fact that for the same good the price may be changed over time for its potential buyer; interactive means that the price for a good is determined in an interaction be-tween buyer and seller (Skiera 2005).

Due to the mainly advertiser (buyer) determined value of context-sensitive mo-bile attention (cp. Section 4.3.3), pricing mechanisms in which buyers and sell-ers are both directly involved in the price fixing process (e.g. price negotiations) are excluded. Following Skiera (2005), the remaining dynamic, interactive pric-ing mechanism implementations are Reverse Pricing and Auctions.

For reverse pricing, the buyer proposes a price for the good, which is up for sale. If the proposed price lies above the secret price threshold of a seller, the buyer receives the good. In the other case, a new bidding round begins or the buyer is not able to acquire the good (Bernhardt et al. 2005). Once again, the advertiser-driven valuation of context-sensitive mobile attention would require Mobile Marketing Providers (sellers) to set this secret threshold not once but for the context-sensitive mobile attention of each individual mobile user. Consequently, this would also result in an inefficient planning problem similar to the static price discrimination (Albers 2007).


Finally, this leaves auctions in which advertisers as buyers submit monetary bids corresponding to their WTP for this mobile attention, based on their context-sensitive mobile attention profiles.

In summary, the revenue model of Mobile Marketing Providers is constituted by generated revenues from selling mobile attention to advertisers (revenue source contact). The latter are at the same time the revenue partners as buyers of mo-bile attention and the proposed price model is a dynamic, interactive pricing mechanism in the form of an auction (cp. Figure 6.7).

Figure 6.7: Revenue Model for Mobile Marketing Providers

6.4.1.3 Architecture of Value Creation

The architecture of value creation of Mobile Marketing Providers, which corre-spondes to its traditional mobile media market platform equivalent, is comprised of the mobile portal and mobile media market component. On the mobile portal, mobile users are paying attention to mobile content (1), which is consecutively offered via the market transaction service of the mobile media market to adver-tisers (2). Once the mobile attention is acquired by an advertiser (3), their corre-sponding Mobile Advertising campaigns are displayed on the mobile portal (4) (cp. Figure 6.8).

Product Contact Information

Seller Buyer

InteractiveNon-

Interactive

Revenue

Source

Revenue

Partner

Price

Model


Figure 6.8: Architecture of Value Creation for Mobile Media Market Platforms

In contrast to other mobile websites, mobile portals offer a single point-of-access to various kinds of mobile content. Rather than offering mobile content only one specific topic, service or product, it features various categories with links to content of different services providers and provides navigation support to access the desired content (Figge 2007, p. 35 f.). Figure 6.9 illustrates the dif-ference and relation between a mobile portal and a mobile website. A horizontal mobile portal aggregates mobile advertisements of multiple POS, which pro-vides offerings in various categories. Once a mobile user accesses and chooses a product category (e.g. movies), they are presented with all listings in that cate-gory. When the mobile user selects a certain POS (e.g. cinema A), they are di-rected to the mobile website of the corresponding POS.

Mobile Media Market PlatformPaying

Attention

Acquisition

of Attention

1

3

4

Advertiser2

Display of

Advertisements

Offering

AttentionMobile

User

Mobile Portal

Mobile Media

Market


Figure 6.9: Mobile Portal vs. Mobile Website

From the perspective of the Mobile Marketing Provider, a market transaction service as part of the mobile media market platform enables transactions for mobile attention in exchange for mobile content between mobile users and ad-vertisers (cp. Zerdick et al. 2001, p. 218). Figure 6.10 illustrates the interaction between the involved market participants.

Figure 6.10: Mobile Media Market Component of the Mobile Media Mar-ket Platform

Mobile Portal

• Books

• Music

• Clothes

• Movies

•…

Store Owner 1

Store Owner n

…

Store Owner 2

MobileWebsite ofCinema A

• Action

• Classics

• Drama

• …

Cinema A Owner

Offerings from multiple

store owners

Offerings from the

selected mobile

cinema

Mobile Portal Mobile Website

Mobile Media Market

Provision of

Content

Acquisition

of Attention

13

4

Advertiser 1

Advertiser n

…

Advertiser 2

2

Provision

of Attention

Monetary

CompensationMobile

Users


Typically, transactions on mobile media markets are initiated by Mobile Market-ing Providers offering mobile content to mobile users (1). In exchange, mobile users pay with their attention (2). This mobile attention is sold by Mobile Mar-keting Providers to advertisers (3) for monetary compensation (4).

6.4.2 Resource Allocation Mechanism

The analysis of context-sensitive mobile attention has revealed that static pricing mechanisms are not optimal from the perspective of a Mobile Marketing Pro-vider (cp. Section 4.3.3). Due to the individual WTP of advertisers for context-sensitive mobile attention, Mobile Marketing Providers have to implement a new pricing mechanism in order to capture this consumer surplus. As previously evaluated, a suitable interactive pricing mechanism for mobile attention consti-tutes an auction. Although, basic auction formats are already applied to tradi-tional mobile attention for search engine marketing campaigns (Google 2009c), the availability of context information requires a more sophisticated concept, which is outlined in the following sections.

6.4.2.1 General Auction Design Aspects for Context-sensitive Mobile

Attention

According to Bichler (2001, p. 11) auctions can be considered as specific forms of negotiations between market participants. In this regard, McAfee and McMil-lian (1987) define auctions as “a market institution with an explicit set of rules determining resource allocation and prices on the basis of bids from the market participants”. Thereby, one can add the description of Milgrom and Weber (1982): “In an auction a bid taker offers to two or more potential bidders, who send bids indicating willingness-to-pay for an object”.

For auctions, four fundamental formats can be distinguished based on bid sub-mission type and the determination of the winning bid (Bichler 2001, p. 12):

• English Auction: The English Auction is an ascending auction format in which potential buyers continuously raise their bids until only one buyer re-mains. This last buyer wins the auction at the price of their last bid.

• First-Price Sealed Auction: This kind of auction works similarly to the Eng-lish auction format, except that potential buyers are only allowed to submit one sealed, private bid. The buyer with the highest submitted bid wins the auction.


• Dutch Auction: This auction format constitutes the counterpart of the Eng-lish Auction by working in the opposite way. The auction begins with a high price for an object. Then this price is successively decreased until a buyer calls to accept the current price. He wins the auction and the object.

• Vickrey Auction: The Vickrey auction format is also referred to as second-price sealed auction and works similarly to the first-price sealed auction. The exception is that the auction winner only has to pay the price of the second highest bidding.

For these basic auctions types, Skiera and Spann (2004) present a framework for design aspects and decisions (cp. Table 6.1).

Table 6.1: Basic Design Aspects of Auctions (based on Skiera and Spann 2004)

Design Aspect Design Decision

Auction Object Description of auction object, definition of bidding variables,

auctioning of options

Auction Participation

Closed or open auction participation, participation fees

Auction Duration Overall auction duration, fixed or variable auction ending

Regulatory Framework

Reservation prices, flexibility of auction rules, binding nature

of auction rules

Sales of multiple Units

Simultaneous or sequel auction, common or individual win-

ning bid price for multiple units

Along this presented auction design framework, the general auction type and design requirements for context-sensitive mobile attention are discussed:

• Auction Type: As previously outlined, the auction type determines the way an object is allocated to its potential buyers.

An appropriate auction type has to be processable in real-time (cp. Section 4.2) since context-sensitive mobile attention cannot be stored. English auc-tions are not sealed in order to give the competing bidder the time to evaluate and react to the currently highest bid. Consequently, this auction format has


no fixed duration. For Dutch auction formats, Mobile Marketing Providers face the problem of determining the individual starting price for the context-sensitive attention of a mobile user. This leaves sealed first or second price auctions as suitable formats.

• Auction Object: The auction object is represented by context-sensitive mo-bile attention as defined in Section 4.1. The biding variable of an auction con-stitutes the payment type of the winning price (e.g. one-time payment, monthly fees, etc.) (Skiera 2004, p. 11). This depends on the particular reve-nue model of a Mobile Marketing Provider, which cannot be further specified in the context of this work. Furthermore, no options on mobile attention are auctioned.

• Auction Participation: It is highly important to deliver relevant mobile ad-vertisements to mobile users – especially with regard to physically visited POS (cp. Section 4.3.3). For this, the access to the auction should be restricted to certified advertisers, which targeting profiles have been validated in ad-vance (e.g. the provided POS location or opening times).

• Auction Duration: See Auction Type bullet above.

• Basic Regulatory Framework: The determination of reservation prices, flexibility of auctions rules and binding of auction bidding constitutes the ba-sic regulatory framework of an auction. It significantly determines the risk of the auctioneer as well as the behaviour of the bidders (Skiera 2004, p. 12).

Due to the potentially high number of market transactions for mobile attention and typically remote geographic location of advertisers, the auction rules can-not be flexibly changed if the situation demands it and thus have to be auction bids have to be binding. Reservation prices can be raised in order to maintain a computable number of advertisers competing for the mobile attention of mobile users.

• Sales of multiple Units: The sale of multiple units would mean the selling the mobile attention of multiple mobile users in a single market transaction to an advertiser. Since the mobile attention of a mobile user is unique for each ad-vertiser, its relevance has to be individually evaluated for each advertiser (cp. Section 4.3.3). Consequently, context-sensitive mobile attention is not sold in multiple units.


In conclusion, context-sensitive mobile attention should be auctioned off to ad-vertisers using an ascending, sealed auction format. However, to incorporate the required relevance of Mobile Advertising campaigns for mobile users into the auction processs, additional auction rules are necessary. These extend the latter general design aspects to a more specific and sophisticated auction format.

6.4.2.2 Multi-attributive Auction Format for Context-sensitive Mobile Attention

The personal nature of the mobile medium specifically requires Mobile Market-ing Providers to maintain a certain relevance of Mobile Advertising campaigns for the attention of mobile users (cp. Section 6.3.3). Consequently, Mobile Mar-keting Providers have to determine this relevance and incorporate it into the auc-tion format. Since scoring models represent the most suitable means for the matching or rating of individual customer profiles along multiple dimensions in the marketing domain (Krafft 2002, p. 57), the implementation of a multi-attributive auction format is proposed as appropriate for context-sensitive mo-bile attention.

This special type of auction allows, besides of the price, integrating additional attributes of a good into the auction bidding. It originates from a procurement domain, in which a buyer expresses their preferences for a good in the form of a utility function. For instance, it may depend on price, quality, or delivery time. Once all bids have been submitted, the seller, whose goods and other proposed conditions, maximises a buyer utility function, wins the auction (Bichler 2000, p. 253).

According to Bichler (2001, p. 142 f.), the utility function represents the key characteristic of multi-attribute auctions. It reflects the overall value of a good for a buyer based on its known attributes. Thus, each bid comprises a monetary bid as well as multiple quality dimensions. Thereby, it can be represented as n-dimensional vector Q of either monetary or non-monetary relevant attributes. In the case of an additive utility function S(xj), the bid of a buyer can be expressed as x = (x1 ... xn). The seller evaluates each relevant attribute xj through their utility function. As a result, the function S: Q�IR translates the value of each attribute into a utility score. Lastly, the overall utility S(x) for bid x constitutes the sum of all individual utility scores resulting from each attribute. If applicable, the indi-vidual utility scores can be weighted, with the weights w1 ... wn summing up to


the value of one. The overall utility of bid is given by the following Equation 6.1.

Equation 6.1: Overall Utility Score for a Buyer

��

� ��

�

� � �

For m submitted bids, a seller determines the winning bid as follows (Equation 6.2):

Equation 6.2: Winning Bid Determination of Buyer

��

For the first-price auctions, the winning buyer pays the submitted price. By con-trast, in second-price auctions the difference between the highest and second highest utility score is calculated and transformed into a corresponding monetary value. This value is deducted from the submitted price of the winning buyer (Bichler 2001, p. 143).

6.4.2.3 Multi-attributive Utility Scoring of Context-sensitive Mobile Attention

In order to apply multi-attributive auctions as a resource allocation mechanism for context-sensitive mobile attention, the following requirements have to be met:

• Multi-attributive Utility Theory (MAUT) as an underlying foundation of the multi-attribute auction formats has to be suitable to translate the relevance of Mobile Marketing campaigns into an utility score, which can be incorporated into the auction process.

The general compatibility of MAUT to evaluate the interests of individuals was analysed by Schäfer (2001). He reviewed a portfolio of approaches for estimating user preferences along multiple dimensions and presented a set of rules on how to apply MAUT for this purpose. Consequently, MAUT is con-sidered suitable to translate the relevant of mobile user into a utility score to be used in a multi-attributive auction.


• For multi-attributive auctions as a special case of procurement auctions, the classic roles of buyers and sellers are reversed (Bichler 2001, p. 139 f.). This means that buyers define a utility function, which reflects the preferred price/quality of a good and the seller submits their bids with regard to these requirements. However, this would require advertisers rather than Mobile Marketing Providers to specify this utility function. Thus, it would leave Mo-bile Marketing Providers without the ability to maintain the relevance of Mo-bile Advertising campaigns for mobile users.

The successful application of the multi-attribute auction format with non-reverse buyer/seller roles is demonstrated by the Internet Search Engine Pro-vider Google by its search engine-marketing platform based on traditional at-tention profiles (Varian 2007, p. 183). Based on this, Albers (2007) derives and outlines a similar concept for context-sensitive mobile attention. Thus, multi-attributive auctions can be applied in this regard.

In order to calculate the utility score reflecting the relevance of a context-sensitive mobile attention for a Mobile Advertising campaign, two preparatory steps are required:

First, primary context information (e.g. location, identity, etc.) contained in the mobile attention profile of a mobile user is used to derive the corresponding secondary context information (e.g. POS distance, personal preferences, etc.) (cp. Section 4.1.2). Then, this secondary context information is matched with the Mobile Marketing Provider’s targeting profile of a corresponding class of Mo-bile Advertising campaigns (e.g. restaurant promotions) (cp. Figure 6.11).


Figure 6.11: Matching of an Attention Profile with a Mobile Marketing Provider Targeting Profile

The matching of a mobile user’s attention profile with the targeting profile of a Mobile Marketing Provider results in multiple non-normalised values (e.g. per-sonal attraction, POS distance, etc.), which reflect the context relevance of a Mobile Advertising campaign for the attention of a mobile user. In order to al-low an overall assessment of this context relevance, in the second step, the cal-culated non-normalised values for each mobile attention profile attribute have to be translated into a single overall utility score, which represents the overall rele-vance of a mobile user for a Mobile Advertising campaign. For this, a utility function has to be developed which meets the following requirements:

• The non-normalised matching results of a specific attention profile attribute have to be converted into normalised values within the interval [0,1].

• The scoring function has to be able to handle missing but relevant context in-formation. For instance, a mobile user may refuse to disclose their current lo-cation (cp. Section 4.3.1).

• The matching results for each context information type have to be weighted in accordance with the requirements imposed by the kind of Mobile Advertising campaigns (for instance, with an increasing price of a promoted product, mo-bile users are willing to overcome greater distances, which require a suitable weighing of the POS distance).

Mobile Attention Profile

Mobile Marketing ProviderTargeting Profile

• Personal Preferences

• POS Distance

• Remaining Visiting Time

• Immediate Need

Matching • Preferred Preferences

• Max. POS Distance

• Min. Visiting Time

• Value Proposition

Context Relevance• Personal Attraction

• Geographical Relevance

• Temporal Relevance

• Satisfiable Needs


• In order to aggregate each matching result for context information type to a utility score reflecting the overall relevance of a mobile user for a Mobile Ad-vertising campaign, a specific approach is required since the additive scoring functions typically applied for multi-attributive auctions are not appropriate.

In the following sections, the feasible matching concepts and utility functions for each attention profile attribute (i.e. personal attraction, POS distance, re-maining visiting time) are proposed, and finally incorporated into an overall util-ity function. Thereby, the context relevance type satisfiable needs is not further addressed since its matching result is always binary: A mobile user expresses their immediate need by selecting a certain mobile portal category (e.g. restau-rant). Either the Mobile Advertising campaign is able to satisfy this need (i.e. it promotes a restaurant) or not. Consequently, neither sophisticated matching concept nor scoring function for this context relevance type is required here.

6.4.2.3.1 Determination and Utility Scoring of Personal Attraction

From the primary context information identity, in advance provided personal preferences of mobile users can be acquired (cp. Section 2.5.1). This informa-tion can be matched with the preferred preferences for a Mobile Advertising campaign and results in the personal attraction of a mobile user (Nieschlag et al. 2002, p. 1064 ff.).

According to Krafft (2002, p. 79), the matching of multi-dimensional static characteristics of customers can be accomplished based on a customer scoring criteria catalogue. For the targeting of Mobile Advertising campaigns, this trans-lates to matching each personal preference attribute contained in a mobile atten-tion profile of a mobile user with its corresponding equivalent in the targeting profile. The matching results of each attribute pair can also to be weighted and are finally cumulated to a utility score.

Table 2.1 illustrates this approach by using a scenario of a mobile user, whose mobile attention profile describes them as male, 25 years and interested rock music. The corresponding Mobile Advertising campaign for a pop music concert event is targeted to males, between 20 and 30 years. First, it is determined if the Mobile Advertising campaign is able to satisfy the immediate need of the mobile user (satisfiable need). Assuming this is the case, the matching of mobile atten-tion and targeting profile is conducted. The matching and scoring of the results shows a utility score of 70 out of a utility ideal score of 100.


Table 6.2: Simplified Utility Scoring Scenario for Personal Attraction (based on Krafft 2002, p. 79)

Attention Profile

Targeting Profile

Matching Results

Weight Value

Gender Male Male 1 10 10 Age 23 20-30 1 20 20 Interests Rock, Pop,

Classic music

Pop, Rock

Music 1 40 40

Income Level

Low Medium 0 60 0

Sum - - - 100 70

In this regard, Equation 6.3 proposes an additive utility function in order to score the personal attraction of a Mobile Advertising campaign for a mobile user. For this, the standard scoring function of Krafft (2002, p. 79) provides the foundation. Nevertheless, it has to be modified to include means to specify how the attractiveness decreases if an expected attribute (e.g. age of mobile user) is missing from the mobile attention profile of a mobile user. This aspect is con-trolled by the variable t. If t=1, the matching result of a missing attribute is con-sidered no match; for t=0, it is ignored that the attribute is missing.

Equation 6.3: Calculation of Personal Attraction

�� !" #�$"%"� !"� & �� # !"'"�%( %"�

�

where PA= The personal attractiveness based on the weighted matched personal attributes of a mobile user with the preferred preferences of an adver-tiser; Value Range ]0,�]

gk= Weight of the attribute k; Value Range [0,�]

yk= Matching result of the mobile attention profile and targeting profile for attribute k; Value Range [0,1]

K= Number of specified target profile attributes relevant for the specified category of Mobile Advertising campaigns

m= Number of specified target profile attributes relevant for the specified category of Mobile Advertising campaigns

t= Weight of the attractiveness reduction for an unavailable attribute; Value Range [0,1]


The resulting calculated utility score, based on matching results of the personal preferences of a mobile user and the preferred personal preferences for a Mobile Advertising campaign, is considered the personal attraction.

6.4.2.3.2 Determination and Utility Scoring of Geographic Reachability

Based on the momentary location of a mobile user and the location of a pro-moted POS, the distance between the two geographic points (POS distance) can be calculated. The value represents an important indicator for the relevance of a Mobile Advertising campaign for a mobile user. Several empirical studies have documented the reciprocal correlation of the POS distance to the probability of a consumer or mobile user respectively to physically visit a POS and making a purchase (Huff 1964; Reilly 1931).

Under the assumption of both locations to be described by geo-coordinates, the distance between the POS and mobile user location can be calculated by multi-ple methods. However, due to various irregularities of the earth, those methods are rather complex and nonetheless not exact (Wikipedia 2009). Since advertis-ers preferably target marketing campaigns in traditional media based on the postal code, no exact distances are needed, though (Figge and Theyson 2006). Consequently, the most straightforward approach to calculate short distances is calculating the airline distance using the Pythagorean Theorem. For this, Equa-tion 6.4 depicts the simplest formula to calculate the distance between two geo-graphic locations whilst assuming a flat earth (Wikipedia 2009).

Equation 6.4: Calculation POS Distance based Pythagorean Theorem (Wikipedia 2009)

( ) ( )²abs²ab 2121 yyxxsRDPoS −+−=

where DPos= The distance between the geo-coordinates (x1,y1) and (x2,y2); Value Range ]0,�]

x1,y1= Latitude x2,y2= Longitude R= Earth Radius 6.371,009 km

In order to calculate the utility of the POS distance for a mobile user, several approaches can be found in the geo-marketing domain. In this regard, the Huff


model (Huff 1964) as a frequently cited approach is discussed and subsequently proposed. The earliest model constitutes the O’Reilly model (Reilly 1931), which attempts to determine the probable willingness of a consumer (i.e. mobile user) to overcome a certain distance in order to purchase products at a specific POS. O’Reilly, known as a “retail gravitationalist” based his model on the gravi-tation theory. It states that two objects attract each other more as the smaller their distance and the larger the masses are. Thereby, O’Reilly described the at-traction between a consumer and POS as the exponentially42 decreasing function of the POS distance of a consumer.

In the model of Huff (1964), this exponent became variable since empirical studies have revealed that overcoming a distance to a POS also depends on the product category offered by the POS43. Consequently, the formula can be simply applied for any POS but has to be configured for each POS individually. Equa-tion 6.5 depicts the formula for the calculation of the attraction of a mobile user to specific POS based on Huff (1964).

Equation 6.5: Calculation of Geographic Reachability (based on Huff 1964)

)* � �+�

where GR= Geographic reachability of a POS for a mobile user at a given location; Value Range [0,1]

w= Attraction of a POS for a mobile user; Value Range [0, 1] d= Distance in km between mobile user and POS location;

Value Range ]0, �]44 �= Parameter which is to be estimated empirically to reflect

the effect of distance on the different types of POS as well as their offered products; Value Range ]0, �]

42 The value of the exponent is two and thereby it complies to Gravitation-Theory (Reilly

1931) 43 For instance, mobile users are willing to overcome greater distance to shop for clothes

compared to POS offering groceries because the latter is cheaper. 44 The calculated remaining visiting time discussed in the next section, remains unrelated to

the travel time, since the shopping time is assumed significantly longer than the travel time (i.e. hours vs. minutes) and thereby is not included in the formula.


The formula of Huff measured the attraction w in the size of a shopping centre. Thereby, he assumed that the larger the size of a POS, the more products are available for sale and thus the higher the attractiveness for a shopper. The � pa-rameter is to be individually determined by a POS (Huff 1964) and is not dis-cussed here any further. Translated to the shopping scenario, the mass of an ob-ject corresponds to the size of a POS (i.e. greater size equals greater varity of choice) and the distance of the masses is the POS distance to consumer.

The resulting utility score based on the POS distance of a mobile user is consid-ered the geographical reachability.

6.4.2.3.3 Determination and Utility Scoring of Temporal Reachability

The temporal aspects for the targeting of Mobile Advertising campaigns are typically based on the current time of day, day of the week or occasionally events (e.g. display of restaurant ads during lunch time) (Oracle Communica-tions 2008, p. 5). However, incorporating the remaining visiting time for a POS promoted in Mobile Advertising campaigns becomes intuitively relevant for mobile users as well. For instance, the value of a mobile advertisement for a lunchtime offered by a restaurant (POS) significantly depends on the mobile user’s (remaining) time to visit the restaurant. Thereby, matching the current time of day and opening hours of the POS results in the remaining visiting timeof a mobile user.

Contrasting to the geographic relevance, an underlying theory for the calculation of the utility score for the remaining visiting time of a mobile user does not to the best knowledge of the author exist yet. However, it can be intuitively as-sumed that a utility function constitutes an increasing function of the remaining visiting time. Furthermore, similar to the calculation of the geographic reachabil-ity, the function needs to allow addressing the individual shopping characteris-tics of a mobile user and the required shopping time for specific products. Con-sequently, following the Huff model, Equation 6.6 depicts a proposed utility function for the remaining visiting time.


Equation 6.6: Calculation of Temporal Reachability

TR�� ,-. /�012134�51 6 78where TR= Temporal reachability of a POS for a mobile user at a

given time of day; Value Range [0,1] ct= Closing time of POS tod= Time of day st= Parameter which is to be estimated empirically to re-

flect the required shopping time for specific goods; a lower value indicates less required time; Value Range ]0, �]

Thereby, the utility score regarding the time of day constitutes the relation be-tween remaining visiting time and the required shopping time for specific goods of a POS. It is considered as temporal relevance.

6.4.2.4 Overall Utility Function for the Multi-attributive Auction Format

Finally, the geographic and temporal reachability as well as personal attraction of a POS for mobile users have to be aggregated to one single overall utility function. For this, the Huff model, which accepts POS distance and attraction as parameters, is applied as an underlying scoring function.

First, the attraction of a POS originally described in the Huff model by the physical size of a POS is replaced by the personal attraction of a mobile user. Second, the Huff model is extended in order to incorporate the temporal reach-ability. Thereby, Equation 6.7 depicts the formula of the proposed overall utility function reflecting the relevance of a mobile user for a Mobile Advertising cam-paign.


Equation 6.7: Calculation of Business Relevance for Mobile Attention45

9*� � ��+ ��: ;*�where BR= Probability of a mobile user to react to a Mobile Adver-

tising campaign; Value Range [0,1] PA= Personal attraction of mobile for a POS; Value Range

[0,1] d= Distance in km between mobile user and POS location;

Value Range ]0, �] �= Parameter which is to be estimated empirically to re-

flect the effect of distance on the different types of POS; Value Range ]0, �]

TR= Temporal reachability of a POS for a mobile user; Value Range [0,1]

In conclusion, it has to be noted that the MAUT provides means for Mobile Marketing Providers to assess the relevance of context-sensitive mobile atten-tion. However, the challenge for Mobile Marketing Providers remains to de-velop the appropriate utility function (cp. Bichler 2001, p. 142) for a given cate-gory of Mobile Advertising campaigns (e.g. restaurant promotions).

6.4.2.5 Auction Bid Calculation and Winner Determination

The previously developed utility function for context-sensitive mobile attention provides the foundation for two aspects of the multi-attributive auction protocol. On the one hand, it allows the Mobile Marketing Provider to adjust the monetary bid of an advertiser based on the relevance of their Mobile Advertising cam-paign for the mobile attention of a mobile user. On the other hand, advertisers can apply this utility function model to calculate their momentary bid for this mobile attention based on their own, individual evaluation of the relevance of a mobile user for their Mobile Advertising campaign.

45 For simplicity reasons, the individual factors of the equation are currently not weighted.

Nevertheless, this can be included into the equations of the respective factors.


6.4.2.5.1 Automated Auction Bid Calculation for Advertisers

Advertisers have to make their purchase decision for mobile attention in real-time (cp. Section 4.2.1). Consequently, the calculation and bid submission has to be automatically processed. Therefore, advertisers have to configure their own utility function based on their understanding of the relevance of mobile users for their Mobile Advertising campaigns. The related process consists of four activi-ties:

1. The parameters of the utility function presented in the previous section are specified in order to suit the individual needs of an advertiser.

2. An ideal context-sensitive mobile attention profile derived from the targeting profile of a Mobile Advertising campaign is fed into the utility function. The resulting value consitutes the ideal utility score. It has to be calculated only once for each Mobile Advertising campaign.

3. Once a mobile user accesses the mobile portal, the actual context-sensitive mobile attention profile is automatically matched with the corresponding tar-geting profile, and the result fed into the advertiser’s utility function. The re-sult is the actual utility score for the context-sensitive mobile attention of a mobile user.

4. Finally and similarly to traditional Mobile Advertising campaigns (cp. Google 2009c), advertisers can specify the maximum monetary amount, which they are willing to pay for the mobile attention of a mobile user with an ideal mobile attention profile. This bid is then multiplied with the ratio of an actual and ideal utility score for the respective mobile attention (cp. Equa-tion 6.8).


Equation 6.8: Calculation of Monetary Advertiser Auction Bid

��9 � ,�9 #��<-�< ��where AAB= Calculated bid of an advertiser to be submitted in

the auction process AAU= Mobile attention utility score calculated based the

on current (actual) mobile attention profile of a mobile user

IAU= Mobile attention utility score calculated based on an ideal mobile attention profile of a mobile user

MAB= Maximum monetary budget to be spent on mobile attention with ideal mobile attention profile

The resulting monetary auction bid (AAB) is then submitted to the auction proc-ess and evaluated by the Mobile Marketing Provider as discussed in the follow-ing section.

6.4.2.5.2 Auction Bid Adjustment by the Mobile Marketing Provider

The relevance of Mobile Advertising campaigns for mobile users is significantly important due to the highly personal nature of the medium (cp. Section 2.4.1). In order to maintain this relevance, Mobile Marketing Providers are supposed to adjust the submitted monetary bids of advertisers based on their own targeting profile and utility function.

Similarly to an advertiser, a Mobile Marketing Provider defines their utility function as well as an ideal mobile attention profile. Since Mobile Marketing Providers do not have the knowledge to determine the relevance of a Mobile Advertising campaign objectively for the mobile attention of a mobile user, the utility function has to be specified on a more abstract level. Then, similarly to the advertisers, the ratio between an actual and ideal utility score of a mobile attention profile determines the portion by which the advertisers bid is reduced. Whereas advertisers calculate the absolute relevance of mobile attention, Mobile Marketing Providers assess the relevance of a Mobile Advertising campaign for the attention of a mobile user, relative only to other competing advertisers.

Equation 6.9 depicts a simple approach based on the Google AdWords auction concept (Google Corporation 2009c) to adjust a submitted advertiser’s bid ac-


cording to the Mobile Marketing Provider’s relative utility score of mobile at-tention profiles. As a result, a virtual bid for the auction process is generated.

Equation 6.9: Calculation of Virtual Bid by Mobile Marketing Provider

=9 � ��9 # ��<>-�<>where VB= Virtual bid (adjusted by the calculated utility score

of te Mobile Marketing Provider) AAB= Auction bid of advertiser as submitted in the auction

process AAUM= Mobile attention utility score calculated by the Mo-

bile Marketing Provider and based on the actual attention profile of a mobile user

IAUM= Mobile attention utility score calculated by the Mo-bile Marketing Provider and based the on ideal at-tention profile of a mobile user

In order to illustrate this approach, Figure 6.12 depicts a sample scenario of a Mobile Marketing Provider calculating the virtual bids of five advertisers, all competing for the mobile attention of a mobile user based on the POS distance. For simplicity reasons, the virtual bids of advertisers are calculated by solely dividing the monetary advertiser bid by the POS distance in kilometres. The re-sults show that by including the POS distance as a relevance factor into the bid-ing process, not necessarily the highest monetary bidder (here POS 1) wins the auction. Instead, POS 3, which submitted a lower bid but has a smaller POS dis-tance to the mobile user, wins the mobile attention of the users. POS 5 is not al-lowed to participate in the auction in the first place due to its too large POS dis-tance.


Figure 6.12: Example illustrating the Virtual Bid Calculation by a Mobile Marketing Provider

6.4.2.6 Multi-attributive Auction Protocol for Context-sensitive Mobile

Attention

After the proposals and discussion of a multi-attributive auction format as a re-source allocation mechanism for context-sensitive mobile attention, a general overview of the corresponding auction protocol is provided. It is supposed to establish a general understanding about the involved participants, their activities, as well as auction process.

Figure 6.13 depicts the multi-attributive auction process in the form of a Unified Modelling Language (UML) activity diagram. In order to provide a more illus-trative description of the auction protocol, it assumed that Mobile Advertising campaigns are about restaurant promotions, and the targeting of advertisers is solely focussed on the POS distance of a mobile user to their restaurant. Fur-thermore, two preparatory activities are assumed to be already completed:

• For certain types of Mobile Advertising campaigns (i.e. restaurant promo-tions), a Mobile Marketing Provider has already specified their targeting pro-file. It reflects on a high abstraction level which mobile users are presumably

150 m

Virtual Bids

POS1: 4€ / 0,25 km = 16,0

POS2: 3€ / 0,15 km = 20,0

POS3: 2€ / 0,05 km = 40,0

POS4: 1€ / 0,10 km = 10,0

POS 3

POS 2

POS 4

POS 1

POS 5

50 m

250 m

100 m

4 €

1 €

2 €

3 €

500 m0,5 €

Targeting Profile

(Mobile Marketing Provider)


relevant to this type of Mobile Advertising campaign. For instance, a target-ing profile may specify that promoted restaurants are only relevant for mobile users if they are within a maximum distance of 1000 meters.

• An advertiser has already specified a targeting profile for their Mobile Adver-tising campaign. It contains the same kind of information as the targeting pro-file of the Mobile Marketing Provider, but on a more detailed and individual level (e.g. targeting of students, in 500m vicinity of the restaurant at lunch-time).

Figure 6.13: Multi-attributive Auction Protocol for Context-sensitive Mo-bile Attention


Based on the latter two completed preparatory activities, the auction process is triggered by a mobile user accessing the mobile portal of the Mobile Marketing Provider. After selecting a mobile portal category, which best suits them to sat-isfy their immediate need, their available context-sensitive mobile attention data is acquired and a corresponding profile generated.

Subsequently, the Mobile Marketing Provider matches the current context-sensitive mobile attention profile of a mobile user with all available targeting profiles of advertisers. Those Mobile Advertising campaigns, whose matching results meet the requirements of the targeting profile of the Mobile Marketing Provider (e.g. restaurants in less than 1000m distance to the mobile user) are considered relevant. Consequently, their corresponding advertisers are allowed to participate in the bidding process for the current mobile attention of the mo-bile user.

In the next step, advertisers match the attention profile with their targeting pro-file and determine if this mobile attention is relevant (e.g. targeting of mobile users in less than 500m distance to the restaurant). If the current mobile attention is found relevant by an advertiser, the utility score of the POS distance for their Mobile Advertising campaign is calculated (e.g. 250m distance to the restaurant equals an utility score 50 out of 100). Based on this utility score, the advertiser calculates the corresponding monetary bid (e.g. 50 (actual utility) /100 (ultility) * 2€ (budget per mobile user) = 1€). Eventually, this bid is submitted to the Mo-bile Marketing Provider.

The Mobile Marketing Provider takes the bid and calculates their own utility score based on their targeting profile (e.g. 250m distance to the restaurant com-pared to 1000m distance maximal allowed, equals an utility score 25 out of 100). The Mobile Marketing Provider applies their utility score in order to ad-just the received monetary bid of the advertiser (e.g. 1€ (advertiser bid) * 25 (distance score POS) /100 (max. distance score (Mobile Marketing Provider) = 0,25 € (virtual bid of advertiser)). Finally, depending on the applied auction type, the virtual bid of an advertiser, which is considered the most valuable, wins the mobile attention.


6.4.3 ICT-Infrastructure

At last, the proposed design aspects of the ICT-infrastructure component of the mobile media market platform are presented.

The ICT-infrastructure is supposed to enable a mobile portal as an interface to mobile users as well as to enable market transactions for mobile attention with advertisers. Following the ICT-infrastructure model for electronic markets (cp. Section 5.3.3.3), the mobile media market platform can be described based on the classic three-tier architecture model, which represents the minimal architec-tural structure of an information system (Edwards 1999, p. 4 ff.). Thereby, the mobile media market platform technically acts in the role of a server, whereas mobile users and advertiser represent its clients (client / server concept).

For context-sensitive mobile attention to be traded on this platform, the process-ing of context information imposes two main conflicts of interests regarding its disclosure for Mobile Advertising campaigns (cp. Section 4.3.1):

• Mobile Users: Depending on their privacy attitude, mobile users are only willing to disclose as minimal attention data as possible in exchange for per-ceived value or incentives.

• Advertisers: The aim of advertisers is to acquire as much mobile attention data as possible about mobile users to archive a highly targeted effectiveness of their Mobile Advertising campaigns.

In order to address these conflicting interests, the Multilateral Security approach can be applied. Its aims at balancing between the competing privacy or security interests of these different parties. Therefore, its proposed concepts can be de-scribed as follows (Rannenberg 2000a):

• Consideration of Conflicts: Multilateral Security acknowledges the natural existence of conflicts of interests and security goals between involved market participants.

• Respecting Interests: The involved market participants are able to specify their own interests and security goals. Conflicts are identified, negotiated and the results reliably enforced.

• Supporting Sovereignty: Each market participant is only required to place minimal trust in the honesty and technology of others.


Consequently, the ICT-infrastructure has to empower mobile users to control the disclosure and use of their personal information, although advertisers still have to be able to apply the disclosed information for the targeting of their Mobile Advertising campaigns.

Although the basic three-tier architecture is comparable to the online media market platforms of Google (Google Corporation 2009d) and Yahoo (Yahoo Corporation 2009a), the integration of context information exhibits several spe-cifics on each tier of the ICT-infrastructure, which are discussed in the following three sections.

6.4.3.1 Presentation Tier

Starting at the top, the user interface of the mobile media market platform (pres-entation tier) has to enable advertisers, mobile users, and Mobile Marketing Providers to communicate their requests (i.e. requests, offerings and compensa-tions) with regard to the market transaction process (cp. Schmid and Lindemann 1998). Thereby, the existence and processing of context information imposes the following special requirements to the respective user interfaces:

• Mobile Users: Mobile users have to be able to control the disclosure and ap-plication of their context-sensitive mobile attention data. Consequently, a mo-bile identity management system (MIdMS) is required (FIDIS 2005b, p. 16 ff.). It allows specifying privacy policies in accordance with the privacy atti-tude of individuals. For this, it allows the review and deletion of their per-sonal usage history as well as stored user information (FIDIS 2005b, p. 11 f.).

• Advertisers: Advertisers require an interface to setup and manage their Mo-bile Advertising campaign as well as measure its performance (Brommund and Amthor 2008, p. 566). This can be constituted by either a Graphical User Interface (GUI) or Application Programming Interface (API). The latter al-lows the integration of the management of Mobile Advertising campaigns into the business processes of an advertiser’s information system (cp. Google Corporation 2009g; Yahoo Corporation 2009c).

• Mobile Marketing Provider: Based on Weinhardt et al. (2003, p. 637), a Mobile Marketing Provider, as a market operator, requires a user interface to setup general trading rules for mobile attention in the form of participation rules, targeting profiles, etc. as well as monitoring the behaviour of the market participants and market outcome.


Thereby, for all of these developed interfaces a common understanding between the market participants based on the extended SIC model with regard to the se-mantic of context-sensitive mobile attention profile has to be established (cp. Section 6.3.2).

6.4.3.2 Logic Tier

In the middle resides the logic tier. It is supposed to process the market transac-tions triggered by the market participants according to the specified trading rules. This involves generating context-sensitive mobile attention profiles, que-rying relevant targeting profiles of advertisers, and ultimately processing the multi-attributive auction protocol for the mobile attention (cp. Section 6.4.2). In this regard, two aspects have to be addressed by the logic tier:

• In order to ensure the security and privacy of the mobile attention data about mobile users, by following the Multilateral Security approach putting in only the minimal trust in others, the matching of context-sensitive attention pro-files with the targeting profiles of advertisers has to take place on the ICT-infrastructure of the Mobile Marketing Provider (i.e. on the central server).

• Market transactions have to be processed almost in real-time since mobile us-ers are not willing to wait for mobile content or advertisements to be dis-played, because sophisticated allocation mechanisms are being processed in the background (Nah 2004).

Both outlined aspects call for a central storage of mobile attention profiles and targeting profiles on the ICT-infrastructure of the Mobile Marketing Provider in order to maintain the privacy and security of context-sensitive mobile attention data, and to avoid response delays for mobile users.

6.4.3.3 Data Tier

Finally, the data tier stores the all information required to process market trans-actions for context-sensitive mobile attention. Similar to the logic tier and fol-lowing the Multilateral Security concept by putting in only the minimal trust in others, the processed transaction data also has to be centrally stored at the ICT-infrastructure of the Mobile Marketing Provider. This includes the following data for the involved stakeholders:

• Mobile Marketing Providers: Mobile Marketing Providers store the Mobile Advertising campaign setup (e.g. participation rules, targeting profile, etc.) in


the database of the mobile media market platform. Furthermore, the transac-tion history for each Mobile Advertising campaign is stored as well. It pro-vides the foundation for accounting, billing, and performance measurements of Mobile Advertising campaigns.

• Advertisers: Advertisers register their individual Mobile Advertising cam-paign for a category of Mobile Advertising campaigns as defined by a Mobile Marketing Provider. In this regard, they define their Mobile Advertisement contents, targeting profile, and maximum bid per attention of a mobile user.

• Mobile Users: Once generated, the mobile attention profile of mobile users is stored in the database. It consists of primary, secondary context information a mobile user as well as further meta-data about the quality of context informa-tion and privacy policies, but is only of temporary nature.

Figure 6.14 depicts the mobile media market platform in the three-tier model while highlighting the most relevant previously discussed aspects of each tier.

Figure 6.14: Mobile Media Market Platform in the Three-Tier-Model

Presentation Tier

Data Tier

Logic Tier

• Transaction Data Storage centrally at the Mobile

Media Market Platform

• Real-Time Processing of Transactions

• Processing of Transaction on the Mobile Media

Market Platform

• Identity Management System for Mobile Users

• Management Interface for Advertisers and Mobile

Marketing Provider

• Common understanding between Market Participants

Mobile Media Market Platform


In order to fully assess the applicability of the outlined engineering recommen-dation framework for a mobile media market, its limitations are at last discussed in the following section.

6.5 Limitations of the Engineering Recommendation Framework

The engineering recommendation framework for mobile media market platforms MoMeMa addresses the explored impacts of context information on the tradi-tional commercialisation of mobile attention. In this regard, it focuses on ena-bling Mobile Marketing Providers to take advantage of the benefits of context information while addressing its challenges. In this role, the engineering rec-ommendation framework exhibits a set of limitations, which are disclosed in the following.

First, the MoMeMa framework addresses only Mobile Marketing campaigns within the European region. Nevertheless, Asia leads the market in the Mobile Marketing domain (ABI Reseach – Technology and Market Intelligence 2009), but the MoMeMa framework cannot directly be assumed to be applicable in this region as well. Consequently, it needs to be re-evaluated for this market.

Furthermore, due to the complexity of electronic markets in general, the respec-tive engineering frameworks and process models only constitute partial models. Thereby, they support the objective to design electronic markets in an objective-orientated, structure and error-prone manner, but cannot be a blueprint for the implementation of an electronic market, which would naturally deliver the ex-pected outcome of the market operator (Weinhardt et al. 2003).

Then, the scope of the MoMeMa framework has been narrowed down to pull-based Mobile Advertising campaigns for mobile web-portals, which are accessi-ble via the mobile Internet. Whereas the Mobile Marketing campaigns feature a much broader spectrum of implementations (cp. Section 2.4.2), the impacts of context information has only been addressed by the MoMeMa framework with regard to these Mobile Advertising campaigns.

In addition to restricting the scope of the MoMeMa framework to Mobile Adver-tising campaigns, the types of primary context information have been limited to those directly available from the mobile network. The same applies for secon-dary context information due to complexity reasons as well. Those context types have been chosen based on the identified benefits for mobile users willing to


satisfy a consumptive need in their momentary situation. However, there are many more types of context information available, which have not yet been con-sidered but still might be valuable for advertisers.

Moreover, the possible interdependencies of transaction service components (cp. Section 5.3.3.4) have been not further addressed since they predominately de-pend on actual mobile media market platform implementations.

Finally, the MoMeMa framework exhibits conceptional limitations, which stem from the fact that context-sensitive Mobile Advertising campaigns, to the extent discussed within the scope of this work, do not exist in practice yet (cp. Section 2.5). This prevents an empirical evaluation of the impacts of context information on the traditional commercialisation of mobile attention. Consequently, the im-pacts have been explored and analysed based on literature reviews. Once mobile media markets for context-sensitive mobile attention emerge in practice, the MoMeMa framework can be empirically evaluated and if necessary aligned ac-cordingly.

In conclusion, the MoMeMa framework at hand provides a high-level guideline for Mobile Marketing Providers on how to engineer feasible implementations of mobile media market platforms for the commercialisation context-sensitive mo-bile attention. Nevertheless, Mobile Marketing Providers still have to detail those engineering recommendations (e.g. selection of auction model, scoring function configuration, etc.) in order to address their individual requirements and objectives (e.g. expected market outcome). Thereby, other engineering rec-ommendation frameworks for mobile media market platforms could also lead to successful outcomes, but have not yet been developed (cp Section 2.6).

6.6 Summary

The MoMeMa recommendation framework for mobile media markets addresses impacts of context information on the traditional commercialisation of mobile attention (cp. Figure 6.15).


Figure 6.15: Main Aspects of the MoMeMa Engineering Recommendation Framework for Mobile Media Market Platforms

Along with the four major activities of the mobile media market engineering process model, the main aspects of the MoMeMa have been documented:

• Mobile Media Market Stakeholders: The ability to describe the momentary usage situation of mobile users for Mobile Advertising campaigns has im-pacts on the interests of the involved mobile media market stakeholders. Mo-bile users expect highly relevant Mobile Advertising campaigns in exchange for the disclosure of their context-sensitive mobile attention data. Advertisers demand a higher Mobile Advertising campaign effectiveness, whereas Mobile Marketing Providers aim at additional revenues due to the increased value of context-sensitive mobile attention. Finally, the interests of the regulators are

Design of

Transaction

Service for

Mobile Attention

Definition of

Mobile Attention

as Transaction

Object

Mobile Media

Market

Environment

Requirements

Mobile Media

Market

Stakeholders

�Business ModelInteractive, dynamic Pricing

�Resource Allocation MechanismMulti-attributive Auction

� ICT-InfrastructureCentralized, Real-Time

Processing of Market Transactions

�Semantic Identify ConceptCommon, semantic understanding

for Mobile Attention

� Incorporation of Meta InformationQuality of Context Information and

Privacy Policies

�Specific Trading RulesRelevance for Mobile Users

�Mobile UsersRelevance of Mobile Advertisements

�AdvertisersMarketing Budget Efficiency

�Mobile Marketing ProviderIncreasing Profits

�RegulatorData Protection of Mobile Users

�Socio-Economic EnvironmentPersonal Nature of Mobile Media

�Technological EnvironmentContext Information Access and

available Processing Power

�Legal and Reg. EnvironmentData Protection (EU Directives)


to protect the privacy of mobile users (i.e. their context-sensitive mobile at-tention data).

• Mobile Media Market Environment Requirements: The market environ-ment for mobile media markets is subdivided into the socio-economic, legal, and technological environment. The analysis of the market environment re-vealed for the social-economic component that the mobile medium is very personal for mobile users. Consequently, it is able to attract high attention but also raises the risk of disturbing the mobile user. Regarding the legal compo-nent, it could be stated that Mobile Marketing Providers have to comply with the European Data Protection directive or their national implementation re-spectively regarding the use of context information about mobile users. Fi-nally, the technology component focuses first on the access to the context in-formation source. Therefore, mainly location-based context information (e.g. POS locations) is available about mobile users. Secondly, sufficient comput-ing power for processing transactions in an appropriate period of time is re-quired, but already available today.

• Definition of Mobile Attention as Transaction Object: There are several particular characteristics of context-sensitive mobile attention, which have to be addressed for the transaction object definition. First of all, the mobile at-tention has to be indirectly acquired from mobile users. This is not covered by the framework of Weinhardt et al. (2003). Second, a common understanding for context-sensitive mobile attention profiles has to be established between all market participants. Second, due to the varying quality of context-sensitive attention profiles, quality information has to be integrated into the mobile at-tention profiles as meta-information. Third, since context-sensitive mobile at-tention profiles contain personal data about mobile users, they have to incor-porate user-driven privacy policies for this data. Finally, specific trading rules have to be specified for this good. For instance, context-sensitive mobile at-tention cannot be sold to the highest bidder without ensuring certain relevance between advertisers and mobile users.

• Design of Transaction Service for Mobile Attention: Based on the stake-holder’s interests and the characteristics of the transaction object, the engi-neering recommendations proposed for the market transaction service have been developed and presented. They are concerned with the business model,


resource allocation mechanism, and ICT-infrastructure of the transaction ser-vice for mobile attention.

The business model, especially the revenue model, exhibits notable design recommendations. Due to the individual valuation of context-sensitive mobile attention by advertisers, a dynamic, interactive pricing mechanism over a static one is preferred. As a result, it offers Mobile Marketing Providers the opportunity for acquiring the maximum WTP from advertisers for their of-fered mobile attention. Consequently, a corresponding resource allocation mechanism in the form of a multi-attributive auction format was proposed. Whereas this allows advertisers to express their individual WTP, it also en-ables Mobile Marketing Providers to maintain a certain level of relevance be-tween the mobile user and Mobile Advertising campaigns. Finally, with re-gards to the ICT-infrastructure, it has been recommended to store and process all transaction data centrally on the server of the Mobile Marketing Provider. This allows maintaining the security and privacy of the attention data and provides the foundation for real-time processing of the transaction, since no other parties (e.g. advertisers) can thereby delay corresponding communica-tion process.

In conclusion, the MoMeMa engineering recommendation framework docu-ments feasible means for Mobile Marketing Providers in order to take advantage of available context information about mobile users. It does not claim to be op-timal nor the only feasible recommendation framework for this purpose. Thereby, Mobile Marketing Providers considering applying the MoMeMaframework do not necessarily implement successful mobile media markets plat-forms for context-sensitive mobile attention. The MoMeMa framework is not ablueprint for the implementation of a concrete market. It abstractly documents general engineering recommendations for mobile media markets, which shouldbe addressed or considered, and design aspects which should be implemented.

In the following chapter, the feasibility of the proposed MoMeMa framework is demonstrated by implementing a prototypical mobile media market platform, based on the developed engineering recommendations of this framework.

Prototypical Implementation of a Mobile Media Market Platform 193

7 Prototypical Implementation of a Mobile Media Market Platform

The implementation of a software prototype does not constitute research per se (Olivier 2004, p. 51). However, it can play different roles to support in research. According to Olivier (2004, p. 51) the term prototype refers, in the information technology domain, to “a simplified program or system that serves as a guide or example for the complete program or system”. Thereby, the construction of a prototype allows concentrating specifically on those aspects, which need to be studied while others are neglected.

In the scope of this work, the prototypical implementation of a mobile media market platform, which enables context-sensitive Mobile Advertising campaigns constitutes a prove of concept. However, prove does not represent the rigor of other evaluation methods (Hevner et al. 2004). Instead, this prototype demon-strates the technical feasibility of a mobile media market platform based on the developed engineering recommendations presented in Chapter 6.

The MoMeMa framework outlines recommendations whose level of abstraction would allow the implementation of an unwieldy number of different mobile me-dia market platforms. For this, Section 7.1 begins with the presentation of an application scenario in order to narrow down the scope of possible Mobile Ad-vertising campaigns to be supported by the prototype.

Based on this scenario, relevant use cases and involved actors are derived and described in Section 7.2. Subsequently, Section 7.3 complements this documen-tation by specifying the respective application process for the usage of the mo-bile portal as well as the corresponding transactions on the mobile media mar-ket.

The developed prototype CoMPaS (Context-sensitive Mobile Portal Service) is documented along the three-tier architecture model mentioned in Section 7.4. In addition, the ICT-infrastructure applied to the prototype is documented in Sec-tion 7.5. This includes the applied database technology, programming language and graphical interface technologies.

Due to the prototypical nature of the CoMPaS application, Section 7.6 discloses its main conceptional, functional, and performance-related limitations. The


chapter concludes with a summary of the developed mobile media platform pro-totype (cp. Section 7.7).

7.1 Application Scenario

The prototype realises a mobile media market platform operated by Mobile Marketing Providers, with the main purpose of generating and selling context-sensitive mobile attention to advertisers. By considering Mobile Advertising campaigns as a prospective subcategory of Mobile Marketing campaigns (Strat-egy Analytics 2007, Kishore 2008) and mobile portals as beneficial entry points for mobile users (Figge 2007, p. 149), the application scenario is concerned with enabling Mobile Advertising campaigns via mobile portals (cp. Figure 7.1).

Figure 7.1: Application Scenario supported by the Mobile Media Market Platform Prototype

Initially in the preparation phase, advertisers (e.g. restaurant owners) and mobile users have to register themselves with the mobile media market platform of a Mobile Marketing Provider (0). For this, advertisers have the option to configure targeting profiles, which reflect the targeted usage situation of the mobile user (e.g. preferred age, interests, or location) as well as the maximum monetary budget per mobile user.

Advertiser 2


Accessing

Mobile Portal• Services

• Campaigns

• Promotions

• Customer

Care

Advertiser n

Advertiser 1

��

Setting up

Personal PreferencesProfile-DB

Define Targeting

ProfileLocation-DB

Create mobile

attention profile

Mobile User

Profile

Personalised

Service-Offering

Targeting Profile-DB

(1)(2)

(3)

(0)(0)

Mobile

UserMobile Media Platform Mobile

Portal


Mobile users may submit their personal preferences. These contain a particular set of personal information (e.g. age, gender, etc.) and some more specific in-formation about their preferences (e.g. pizza, movies). Both profiles are stored by the Mobile Marketing Provider. They constitute the foundation for matching Mobile Advertising campaigns with relevant mobile users.

The service provision of the mobile media market platform is triggered once the mobile user accesses the mobile portal by using their mobile device (1). Thereby, their personal preferences and momentary location are queried from the respective databases and aggregated, together with a time stamp, into a con-text-sensitive mobile attention profile (2). Once the mobile user has selected a mobile portal category, the Mobile Marketing Provider matches the mobile user’s attention profile with the targeting profiles of the advertisers available for this portal category. If there is a match, the Mobile Advertising campaigns are considered relevant and the advertisers are allowed to participate in the follow-ing auction process. Once the auction winners are determined, the respective Mobile Advertising campaigns are displayed on the mobile portal (3).

7.2 Use Cases derived from the Application Scenario

For the specified application scenario, four relevant use cases concerning the mobile media market platform and its involved actors are identified (cp. Figure 7.2).


Figure 7.2: Use Cases of the Mobile Media Market Platform

In order to illustrate these use cases, the following sections are going to outline their main aspects in detail.

7.2.1 Management of Mobile Portal Categories

The foundation of the mobile portal constitutes the mobile content categories, which are defined by the Mobile Marketing Provider. Advertisers register their Mobile Advertising campaign to be displayed in an appropriate category of their choice.

Similarly to the Yellow Pages service (AT&T Inc. 2009), these mobile portal categories feature certain types of content (e.g. information on restaurants, cinemas, sport events, etc.). Furthermore, Mobile Marketing Providers may specify the maximum number of displayed mobile advertisements per user re-quest, a pricing mechanism (e.g. first price auction) for the offered mobile atten-tion as well as the corresponding compensation method (e.g. pay-per-click) (cp. Section 2.4.2).

In addition, Mobile Marketing Providers specify a targeting profile, which de-fines the group of mobile users relevant for this category of Mobile Marketing


campaigns. This includes mandatory information to be disclosed by advertisers (e.g. POS location or opening times) in order to be allowed to register their Mo-bile Advertising campaign to this mobile portal category.

Finally, to assess the actual relevance of an individual mobile user, its utility function is configured. With the matching results of attention profile and target-ing profile (i.e. context relevance) as input, its resulting utility score reflecting the relevance of a mobile user for a certain Mobile Advertising campaign is ap-plied to the auction process in order to adjust the monetary bid of an advertiser.

7.2.2 Management of Mobile Advertising Campaigns

Advertisers willing to conduct a Mobile Advertising campaign can register for one or more mobile portal categories. Subsequently, several characteristics of the Mobile Advertisement campaign have to be specified.

First, the textual message of the Mobile Advertising campaign has to be pro-vided. Then, information such as POS location or opening hours is required by the Mobile Marketing Provider. After that, advertisers have to disclose the mo-bile portal category to be registered to (e.g. restaurants). Next, the maximum budget an advertiser is willing to spend on the attention of a mobile user with an ideal mobile attention profile has to be specified. Furthermore, advertisers define their targeting profile, which comprises preferred personal mobile user prefer-ences, max. POS distance and opening hours. Finally, advertisers specify their individual utility function to assess the relevance of mobile users. Eventually, the result provides the foundation for the calculation of the monetary auction bid.

7.2.3 Management of User Profile

Due to the identified need for mobile users to be able to manage and control the personal information disclosed during the usage of the mobile portal, the func-tionality of a mobile identity management system is required. It has to offer mo-bile users the following features (cp. Section 6.3.1.2.2):

• Management of Personal Data: For the identity-based targeting of Mobile Advertising campaigns, mobile users have to disclose personal information such as gender, age, interests prior to the mobile portal usage. Therefore, they


have to be able to manage, manipulate, or delete this personal information af-terwards.

• Pseudonymity of Personal Data: In order to spare a mobile user from dis-closing their real identity to the Mobile Marketing Provider, their personal in-formation as well as other context information can be attached to a pseudo-nym.

• Management of Privacy Policies: To control the use of their disclosed per-sonal information, the mobile user has to be able to define several basic pri-vacy policies. First, the disclosure of their identity (i.e. in form of a pseudo-nym) and their momentary location for Mobile Advertising campaigns can be allowed or disallowed. Second, they need to be able to specify whether or not their personal profile (i.e. socio-demographic data) can be queried based on their available pseudonym.

• Management of Transaction History: The Mobile Marketing Provider is able to record market transaction histories. Whereas such a history may help advertisers improve the targeting of their Mobile Advertising campaigns, it may also might violate the mobile user’s privacy. Consequently, the mobile user has to be able to prevent the generation of a transaction history in the first place or delete it later on.

Since the mobile user has to be able to access this MIdMS functionality via their mobile device, this use case is part of the use of mobile portal, which is de-scribed in the following section.

7.2.4 Use of Mobile Portal

The use case use of the mobile portal comprises a mobile user, who accesses the mobile portal via their mobile device (e.g. smart phone). From the mobile por-tal’s homepage, they are able to choose from multiple portal categories as speci-fied by the Mobile Marketing Provider. Meanwhile, the context-sensitive mobile attention profile reflecting the current usage situation of a mobile user is gener-ated – while respecting their privacy policies.

After the mobile user has selected the mobile portal category of their choice, the transaction service provided by the mobile media market allocates the mobile user’s attention to the appropriate Mobile Advertising campaigns or advertisers respectively.


For instance, if a mobile user has selected the portal category restaurants, they are exposed to a list of Italian restaurants (personal preferences), which are within their close vicinity (location) and are currently open (time of day). Once the mobile user chooses a specific offering by clicking on the Mobile Adver-tisement, they are presented with additional POS details and directions − if ap-plicable.

Based on the outlined use cases for the mobile media market platform prototype, the sequential application process is described in the following section.

7.3 Application Process

The application process for the activities previously outlined in the use cases concerns the Mobile Marketing Provider, advertisers and the mobile user. It be-gins with the Mobile Marketing Provider defining the mobile portal categories and setting up the respective targeting profiles and utility function.

Subsequently, a mobile user registers at the mobile portal and discloses their personal information along with their corresponding privacy policies. Mean-while, advertisers register their Mobile Marketing campaigns (e.g. portal cate-gory, advertising message, targeting profile, etc.) at the mobile media market platform.

Once the preparation phase is completed, the mobile user can access the mobile portal. Their context-sensitive mobile attention profile is generated based on ac-quired context information. At the same time, they are presented with a list of mobile portal categories for them to choose from.

Once the mobile user has selected a portal category suiting their immediate needs, the auction process is initiated. Since all necessary transaction data has already been submitted by advertisers and mobile users, the auction process is executed and completed without any further interaction from advertisers.

Finally, the mobile attention is delivered to the auction winner(s) by displaying their mobile advertisements on the mobile portal. Now, the mobile user can click on a mobile advertisement in order to receive more details or be directed to the landing page of the advertiser. At the end of this activity, the mobile user has the opportunity to start over and select a new portal category.

Figure 7.3 depicts an UML activity diagram for the described application proc-ess whilst focusing on the main activities of the mobile media market platform.


Figure 7.3: Mobile Portal Activity Diagram

In the following section, the architecture of the CoMPaS prototype required to enable the outlined application process is presented.

7.4 Three-Tier Prototype Architecture

The architecture of the CoMPaS prototype follows the outlined ICT-infrastructure recommendations of Section 6.4.3. Consequently, it represents a client/server concept, which is structured along the three-tier architecture model.

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Its presentation tier is located remotely with the clients (i.e. advertisers and mo-bile users), whereas the logic- and data tier are situated at the server (i.e. at the ICT-infrastructure platform of the Mobile Marketing Provider). Each of these three tiers are presented and discussed in detail in the following sections.

7.4.1 Presentation Tier

The presentation layer is the topmost layer of the CoMPaS prototype architec-ture. It is divided into the graphical user interfaces (GUI) for mobile users, ad-vertisers and the Mobile Marketing Provider.

7.4.1.1 Mobile User GUI

The GUI for mobile users enables access to the content of a mobile portal via mobile devices. Implemented as a HTML-based mobile web interface, it pre-sents on its homepage, an overview of all available mobile user choices. On the one hand, in the search & find section (designed in the YellowPages style) (AT&T Inc. 2009) exclusively Mobile Advertising campaigns can be found. On the other hand, the content section allows access to editorial content bundled with Mobile Advertising campaigns.

Figure 7.4 depicts the initial overview page of the mobile portal on the left side. Assuming a mobile user feels hungry, they could select the restaurant category from the search & find section. They are presented with a list of relevant restau-rants in accordance with their personal food preferences, current geographic lo-cation and time of day (cp. Figure 7.4, right side). The percentage number for a list entry indicates the aggregated relevance of this Mobile Advertising cam-paign and is supposed to support the mobile user decision.

202 Proto

Figure 7.4: Mobile Por

Additionally, the mobile choose from multiple pseuand privacy policies. The tion or identification infotion of a transaction histor

Figure 7.5: Mobile Use

typical Implementation of a Mobile Media

rtal Component of the CoMPaS Proto

portal allows a mobile user to creaudonyms. These represent a set of perslatter comprise the disclosure of push

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opening hours), the pricing mechanism (e.g. auction format), and the com-pensation method (cp. Figure 7.7 top, left).

• Filtering: Similar to the advertiser’s management GUI, filtering allows the specification of general targeting profiles applicable to all registered Mobile Advertising campaigns, for a certain portal category. For this, completely ir-relevant Mobile Advertising campaigns for a mobile user (e.g. based on maximum POS distance and relevant opening hours) can be filtered out (cp. Figure 7.7 top, right).

• Matching: Similar to the advertiser management GUI, utility functions can be configured in order to assess the matching qualities (i.e. context rele-vance) between a mobile attention profile and the targeting profiles of all reg-istered Mobile Advertising campaigns in this section (utility score) (cp. Fig-ure 7.7 bottom).

7.4.2 Logic Tier

The logic tier of the CoMPaS prototype is depicted in Figure 7.8. An UML class diagram documents those classes essential for the understanding of the prototype application logic46.

The central component of the CoMPaS prototype represents the mobilePortal class, which is responsible for the interaction with the mobile user and the re-sulting information flows.

Once a mobile user accesses the mobile portal, the idmFunc class attempts to generate their mobile attention profile. For this, the mobileOP class requests their identity and current location from the mobile operator interface. Once the mobile attention profile is created, the mobile user can select a mobile portal category of their choice. Subsequently, the targeting class is in charge of filter-ing out the irrelevant Mobile Advertising campaigns for this portal category - based on the corresponding targeting profile of the Mobile Marketing Provider.

46 In reality, the prototype is much more complex and comprises many more classes.


Figure 7.8: UML Class Diagram of the CoMPaS Prototype

Then, the matching class is responsible for auctioning off the mobile attention of the mobile user. Firstly, the mobile attention profiles are matched with the tar-geting profiles of the Mobile Advertising campaigns, which have been consid-ered relevant by the targeting class. Secondly, the matching results are evaluated based on the respective utility functions of the advertisers, and the correspond-ing monetary bid for each advertiser is calculated. Thirdly, all advertiser bids are discounted based on the utility function of the Mobile Marketing Provider.

Finally, the mobilePortal class determines the auction winners (advertisers) and displays their Mobile Advertising campaigns via the mobile portal GUI. If the mobile user clicks on the mobile advertisement, they receive more details about the promoted product and a map with directions to the POS.

7.4.3 Data Tier

The lowest tier constitutes the data tier. It stores and maintains all necessary data required to operate the mobile portal and the underlined mobile media market. A corresponding ER-Model of the data tier is depicted in Figure 7.9.


Figure 7.9: ER-Model of the CoMPaS Data Tier47

The central entity of the data tier represents the MarketingActivity, which sum-marises all relevant information in order to provide the mobile portal service. Each data record holds a mobile portal category to be specified by the Mobile Marketing Provider. Attached to the table is the AdvertiserActivitiy entity. It comprises the Mobile Advertisement campaigns, which an advertiser has regis-tered to this portal category. Furthermore, attached to this entity are multiple additional dependent entities, which are used to specify filters and utility func-tions (e.g. consumerInterests, filtering, targeting).

47 It has to be noted that the table names in the ER-Model may slightly differ from the termi-

nology used throughout this work. The prototype is able to provide more functionality than discussed in the scope of this work and therefore the naming convention is more abstract or general. This mainly concerns the tables MarketingActivity (corresponding to MobileAd-vertisingCategory) and AdvertiserActivity (corresponding to AdvertiserCampaignProfile).


For each mobile user request of a certain mobile portal category, the Transac-tionRound entity holds the information required to process an auction round for the mobile attention of a mobile user. For each auction bid of an advertiser within an auction round, the related entity TransactionDetail holds the necessary information. For controlling purposes, the Matching and MatchingDetail entities hold further detailed information about the results from matching mobile atten-tion and targeting profiles.

Finally, the entity Pseudonym stores the personal information of the mobile user under multiple pseudonyms. In this regard, the entity VirtualConsumer is used to simulate the momentary usage situation of a mobile user and consequently the use of the mobile portal.

The necessary ICT-infrastructure required and applied to enable the operation of the previously outlined prototype architecture is presented in the following sec-tion.

7.5 ICT-Infrastructure Setup

The ICT-Infrastructure setup required to run the CoMPaS prototype comprises several software and hardware components. Furthermore, the applied software platform and used programming language for the prototype is outlined.

7.5.1 ICT-Infrastructure Elements

The ICT-infrastructure used to implement and operate the CoMPaS prototype consists of four types of hardware components as well as the corresponding software platforms (cp. Figure 7.10).


Figure 7.10: Overview of the Elements of the Prototype System

The central element of the ICT-infrastructure represents the Mobile Portal Ap-plication Server. It is responsible for the translation of mobile user requests into application events, which trigger the corresponding application processes. It is based on a standard Intel-based server with Microsoft Windows Server 2003 as the operating system.

In order to acquire geo-information, Mobile Portal Application Server connects via the fixed Internet to the Microsoft Bing Maps Server (Microsoft Corporation 2009a). Using the TCP/IP, HTTPS and the SOAP protocol, a Web Service con-nection is established48. This provides access to geographic maps and routing directions for mobile users to promoted POS. Thereby, the application as well as the data resides at the Microsoft Bing Data Centre and can be accessed on de-mand (Microsoft Corporation 2009a).

The GUI for advertisers, which enables the interaction with the mobile media market platform, has been implemented as a desktop application, which locally runs on standard PCs. It communicates via the Internet using the TCP/IP and Microsoft Server Message Block (SMB) protocol with the CoMPaS database residing on the Mobile Portal Application Server.

For the interaction of mobile users with the mobile portal, a mobile web inter-face has been developed. In order to run, the mobile device has to have access to

48 For more information on Web Services, refer to the respective W3C Activity Website at

http://www.w3.org/2002/ws, accessed 2010-02-04.


the mobile Internet and a mobile web browser featuring HTML 4.049 needs to be installed.

7.5.2 ICT-Infrastructure Software Technology

Following the three-tier architecture model, the applied software technology for the introduced infrastructure elements of the prototype and its communication means is outlined (cp. Figure 7.11).

First, as operating system software, Microsoft Windows Server 200350 has been used. On top of that, the Microsoft DotNet 2.0 Runtime51 provides the execution environment for the CoMPaS prototype. Since the mobile portal GUI for mobile users represents a web application, the Microsoft Internet Information Server 6.0 (IIS6)52 is used to generate and deliver the respective mobile web pages.

The actual mobile portal application is embedded into this system software en-vironment. On the bottom tier (data) resides the CoMPaS database in the form of a Microsoft Access 200353 database file. No further database software is re-quired to access and manipulate this database since Microsoft DotNet Frame-work offers the required functionality.

The middle tier (logic tier) constitutes the application logic for processing the market transactions on the mobile media market platform. It has been imple-mented as Microsoft DotNet 2.0 Dynamic link library (DLL) in order to make its functionally centrally accessible to all CoMPaS prototype components.

49 For more information of HTML 4.0, refer to the respective W3C Activity Website at

http://www.w3.org/TR/html4, accessed 2010-02-04. 50 For more information on Microsoft Windows Server 2003, refer to the Microsoft Product

Website at http://www.microsoft.com/germany/windowsserver2003/default.mspx, ac-cessed 2010-02-04.

51 For more information on Microsoft DotNet, refer to the Microsoft Product Website at http://www.microsoft.com/NET, accessed 2010-02-04.

52 For more information on Microsoft Internet Information Server 6.0, refer to the Microsoft Product Website at http://www.microsoft.com/windowsserver2003/iis/default.mspx, ac-cessed 2010-02-04.

53 For more information on Microsoft Access 2003, refer to the Microsoft Product Website at http://office.microsoft.com/de-de/access, accessed 2010-02-04.


Figure 7.11: ICT-Infrastructure Software Technology Overview for Proto-type

On the top tier (presentation) resides the GUI for mobile users, advertisers and the Mobile Marketing Providers. Here, mobile web interfaces are implemented with Microsoft ASP.Net54, which allows the development of dynamic web pages

54 For more information on Microsoft ASP.Net, refer to the Microsoft Product Website at

http://www.asp.net, accessed 2010-02-04.

Presentation Layer

ASP.NET 2.0(Web GUI)

WinForms 2.0(Windows GUI)

Application Layer

Dot Net 2.0 Application(Mobile Portal Services)

Application Layer

Dot Net 2.0 Application(Mobile Portal Services)

Data Layer

Microsoft Access 2003(Mobile Portal Database)

Mobile Portal Application

Application Runtime Environment

Internet Information Server 6.0

Microsoft Dot Net Runtime 2.0

Microsoft Windows Server 2003


generated by the IIS6. By contrast, the advertisers’ GUI has been implemented using the Microsoft DotNet WinForms 2.055 technology, which results in a lo-cally executed desktop application.

In summary, the ICT-infrastructure for the CoMPaS prototype universally relies on Microsoft software technology. For the prototype development, the choice of technology from a single vendor ensures high compatibility between the differ-ent components of the prototype. However, in reality, such homogenous ICT-infrastructure environments are preferred but hardly exist. Nevertheless, by de-signing the prototype along the three-tier architecture paradigm, using well-defined interfaces, reduces the risk of incompatibilities if a tier has to be re-placed by a different software technology.

7.5.3 Programming Language and Development Environment

The previous sections presented the ICT-infrastructure elements and software technology applied in order to implement the CoMPaS prototype. However, this does not capture the used programming languages or other means to access the application database, implemented application logic and GUI interfaces. Once more following the three-tier architecture, these aspects are addressed.

On the data tier, application data is accessed and manipulated by using the Structure Query Language (SQL)56. Moving up to the logic tier, the application logic was programmed in Visual C#.Net 200557, which constitutes a full-featured object-orientated programming language. On the top tier (i.e. presenta-tion tier), again Visual C#.Net 2005 has been used to build dynamic web pages using the ASP.Net technology. Furthermore, traditional Windows GUIs have been developed by taking advantage of the Microsoft DotNet WinForms tech-nology.

Finally, in order to enable a consistent development process across all applica-tion components and to provide support for application development along the

55 For more information on Microsoft Windows Server 2003, refer to Microsoft Product

Website at http://www.microsoft.com/NET, accessed 2010-02-04. 56 For more information SQL, refer to the International Organization for Standardization

(ISO) Website at http://www.iso.org/iso/catalogue_detail.htm?csnumber=34133, accessed 2010-02-04.

57 For more information on Microsoft Visual C#.Net, refer to Microsoft Product Website at http://msdn.microsoft.com/en-us/vcsharp, accessed 2010-02-04.


three-tier-architecture, Microsoft Visual Studio 2005 as an integrated develop-ment environment (IDE) has been used for all ICT-infrastructure components.

In closing this chapter, the conceptional, functional, performance and security related limitations of the CoMPaS prototype are discussed in the following sec-tion.

7.6 Limitations of the Prototype

The prototype is supposed to demonstrate the feasibility of implementing a mo-bile media market platform based on the proposed MoMeMa framework. Due to the prototypic nature of CoMPaS, it exhibits a set of limitations, which are dis-closed in the following sections.

7.6.1 Conceptional and Functional Limitations

Conceptional limitations of the CoMPaS prototype can be found on different application levels. First, although the actual implementation of the CoMPaS pro-totype addresses the aspects specified by the MoMeMa framework, it solely aims at supporting the outlined application scenario of Section 7.1. Conse-quently, no alternative application scenarios have been evaluated.

Furthermore, the CoMPaS prototype restricts the flexibility for Mobile Market-ing Providers and advertisers with regard to the specification of their targeted profiles. Due to the unwieldy number of possible instances of targeting profiles, the prototype offers only a limited set of attributes to specify a targeting profile for mobile attention. At the same time, the utility functions for assessing the relevance of an attention profile are predefined and can only be adjusted based on a few parameters.

Besides the conceptional limitations, some functional limitations also have to be disclosed. Firstly and most importantly, the usage situation of a mobile user is not determined based on real context information (e.g. current location). For the sake of simplicity in demonstrating the impacts of different usage situations to the auction process, a small application for maintaining a so-called virtual mo-bile user has been developed. It instantly allows the generation of fictional usage contexts in relation to varying locations, changing their personal attributes and privacy settings. Consequently, no real identity and location information are ac-quired from the mobile network operator.


7.6.2 Performance and Security Limitations

One of the main engineering recommendations regarding the ICT-infrastructure concerns the real-time processing performance of market transactions for mobile attention (cp. Section 6.4.3). Due to the prototypical nature of CoMPaS, this as-pect cannot be guaranteed. However, the CoMPaS prototype provides a per-formance test and monitoring feature in order to gain knowledge about the in-creasing processing complexity that comes with each advertiser and mobile user joining the mobile media market.

In addition, the CoMPaS prototype generates information flows about personal information of mobile users and targeting profiles of advertisers. Those can im-pose security issues, which can be classified based on the four types of classical security goals (Rannenberg 2000a, Rannenberg 2000b):

• Confidentiality: Confidentiality is concerned with the prevention of unau-thorised access to data (e.g. customer data or business secrets).

For the information flow between all mobile media market participants no se-cure communication channels (e.g. via HTTPS) have been explicitly estab-lished. Consequently, a potential attacker could intercept and gain access to the transferred information.

• Integrity: Integrity is denoted by the protection of stored or transferred data from unnoticed modification (i.e. intentionally or unintentionally).

The integrity of personal information about mobile users and those of the ad-vertisers is not explicitly protected. The unauthorised modification of mobile attention or targeting profiles may lead to mobile users being exposed to ir-relevant Mobile Advertising campaigns. Consequently, mobile users could be disturbed and advertisers may suffer financial loss due to ineffective Mobile Advertising campaigns.

• Availability: Availability denotes the undisturbed functionality of a system (e.g. availability of an online web shop).

The availability of a mobile portal for mobile users cannot be guaranteed. On the one hand, access to the mobile portal requires mobile network and Internet coverage, which cannot be influenced by the Mobile Marketing Provider. On the other hand, the CoMPaS prototype is not protected against internal system


failures or even denial-of-service attacks, which prevent the access for mobile users and advertisers to the mobile media market platform.

• Accountability: Accountability means that a responsible person or system can be definitely identified. This security goal especially becomes relevant in business relations, where information and financial flows are exchanged elec-tronically, and the involved need to be identified without any doubt.

The accountability of mobile users or advertisers cannot be guaranteed. This may lead to click-fraud58. Whereas click fraud currently cannot completely be prevented (Bennefeld 2008, p. 596 f.), the availability of context information about mobile users allows the alleviation of this issue. Compared to tradi-tional Mobile Advertising campaigns, click-fraud with their context-sensitive campaign equivalents is much harder to accomplish. In order to generate costs for an advertiser, the momentary usage situation of a fraudster has to match the context to which a Mobile Advertising campaign has been targeted (e.g. in close vicinity of a POS). By contrast, for fixed Online or traditional Mobile Advertising campaigns, a fraudster can be anywhere in the world clicking on an online or mobile advertisement.

Although the outlined security goals are valid in reality, they are not necessarily required to demonstrate the general feasibility of implementing a mobile media market platform, based on the developed engineering recommendations.

7.7 Summary

The CoMPaS prototype demonstrated the technical feasibility of applying the developed MoMeMa framework to implement a mobile media market platform for context-sensitive mobile attention. In this regard, it supports four use cases, which relate to the mobile user, advertiser, and the Mobile Marketing Provider.

Completely relying on Microsoft software technology and standard consumer PC hardware, the prototype implements a client / server concept, structured along the three-tier architecture. On the data tier, all application data required to conduct transactions for mobile attention are stored. One level up, on the logic

58 For instance, click-fraud could comprise competitors clicking, instead of mobile users, on

the displayed mobile advertisements. Thereby, draining the advertisement budget of an ad-vertiser to the point at which he is no longer able to participate in the auction process. Con-sequently, the Mobile Advertising campaign is not further displayed.


tier, the application processes for conducting market transactions has been im-plemented. Finally, on the presentation tier, GUIs for the interaction with the market participants have been developed. The GUI of mobile users constitutes a mobile web-based portal, whereas advertisers and Mobile Marketing Providers have been provided with a local desktop application.

Like most prototypes, the CoMPaS application exhibits several limitations with regard to conceptional, functional, performance and security aspects. Although conceptional and functional aspects are candidates for further research, perform-ance and security aspects are not explicitly addressed. Nevertheless, they are relevant in practice, but not required in order to demonstrate the feasibility of the MoMeMa framework.

Since the implementation of a software prototype does not replace an evaluation of the developed IT artifact, the following chapter presents a conducted empiri-cal evaluation of the MoMeMa framework with regard to its general utility for the practice.

Empirical Evaluation of Engineering Recommendation Framework 219

8 Empirical Evaluation of Engineering Recommendation Framework

The evaluation of the utility of the developed IT artifact represents an important activity in the design science process. Thereby, the appropriate evaluation crite-ria and respective assessment against these criteria has to be identified (March and Smith 1995). Therefore, this chapter presents the empirical evaluation of the MoMeMa framework to document its utility for the practice.

Section 8.1 introduces the applied evaluation methodology. In order to assess the utility of the developed MoMeMa framework, expert interviews have been conducted and the acquired data has been analysed using the qualitative content analysis.

Thereafter, Section 8.2 develops four hypotheses to be tested based on the expert interviews. They represent selected core aspects of the MoMeMa framework.

Then, Section 8.3 continues with an outline of the interview design and data ac-quisition from the interview partners. Thereby, the main four sections compris-ing the interview guide are introduced and some background on the types of ac-quired data is given.

Conducted data analysis and its interpretation to demonstrate the validity of each developed hypothesis with respect to the MoMeMa framework is presented in Section 8.4.

Based on the previous interpretation of the interview results, corresponding im-plications of the IT artifact evaluation are derived in Section 8.5. Then, Section 8.6 complements this by highlighting the limitations of the methodology in gen-eral and the limitations of the interview results specifically.

Finally, Section 8.7 summarises the chapter whilst illustrating the main evalua-tion results with regard to the validity of the MoMeMa framework.

8.1 Evaluation Objective and Methodology

The evaluation objective of the MoMeMa framework as an IT artifact is to as-sess the utility of its key aspects for practice. Consequently, the suitable evalua-tion assessment methodology has to be identified. In this regard, Hevner et al. (2004) distinguishes between observational, analytical, experimental, testing and distributive evaluation methods.


Since context-sensitive Mobile Advertising campaigns hardly exist in practice (cp. Section 2.4), the utility of the proposed engineering recommendations can-not be evaluated on an observational basis (e.g. case study). Furthermore, ana-lytical and experimental approaches are also not appropriate since the MoMeMaframework neither constitutes an IS architecture to be analysed nor an algorithm, whose utility could be simulated – the same applies to the testing methods.

Finally, a descriptive evaluation seemed appropriate. Application scenarios could be constructed in order to demonstrate the utility of the IT artifact. How-ever, this imposes two issues. Firstly, due to the novelty of the IT artifact, it is unclear what representative scenarios in practice are and how the IT artifact has to support these to demonstrate its utility. Secondly, the proposed engineering recommendations have been developed solely based on a theoretical analysis. Consequently, the evaluation has been accomplished by acquiring empirical data through conducting expert interviews.

8.1.1 Expert Interviews

The acquisition of empirical data aims at describing an excerpt of reality as ac-curately as possible based on distinctive characteristics (Bortz and Döring 2006, p. 138). In this regard, quantitative methods seek ways to quantify these charac-teristics. The corresponding evaluation leads to statistical processing of the ac-quired data. By contrast, qualitative approaches aim to describe these characte-ristics verbally and evaluate the acquired data by interpretation (Bortz and Döring 2006, p. 296).

One common method for the acquisition of empirical data in social sciences constitutes the conducting of interviews. This technique is mostly driven by the subjective perspective of the interviewee and becomes particularly appropriate when acquiring empirical data about new and innovative problems (Bortz and Döring 2006, p. 308). Consequently, interviews have been conducted to evaluate the potential and utility of the MoMeMa framework.

Thereby, the appropriate group of interviewees has to be determined. Since the MoMeMa framework is supposed to be evaluated from the perspective of a Mo-bile Marketing Provider, its interdisciplinary nature imposes the conducting of interviews with experts, which cover the main parts of a mobile media ecosys-tem. Those individuals exhibit specialised knowledge in a specific domain and


substitute many other individuals to be questioned, to acquire the same insight on a certain topic. At the same time, a common understanding about the relevant concepts and aspects between these experts can be assumed (Gläser and Laudel 2009, p. 11 f.).

8.1.2 Qualitative Content Analysis

In order to conclude from the acquired empirical data of the expert interviews on the utility of the MoMeMa framework, this data is evaluated using the qualita-tive content analysis (QCA). It provides means for the analysis of material, which originated from any kind of communication (Mayring 2008, p. 11). Ac-cording to Mayring (2008, p. 42 ff.), the main characteristics of QCA can be summarised as follows:

1. QCA is strongly founded on the concepts of the communication theory. The analysis and interpretation of content always takes place in the context of communication in which the content is acquired.

2. QCA always follows a redefined set of rules and process models to ensure a systematic and comprehensible approach. However, a standard does not ex-ist. Instead, a new process model always has to be developed in accordance with the contents to be analysed.

3. The central component of the QCA is the category system. It structures the content according to the specific criteria, which serves for the next interpreta-tion steps.

For the evaluation of the IT artifact, an interview guideline has been formulated containing multiple questions regarding the main aspects of the MoMeMa framework. In order to build a QCA category system from this interview guide-line, each question is considered a distinctive category, which aggregates all in-put from the experts for this question59.

For the subsequent interpretation of the category contents, the QCA distin-guishes between three types of basic interpretations60 (Mayring 2008, p. 59). In this case, Summarising QCA as an interpretation method has been applied in or-

59 There several other QCA analysis approaches available. For an overview refer to Mayring

(2008, p. 59ff.) 60 For two other basic interpretation methods, refer to Mayring (2008, p. 57).


der to extract a general expert opinion for each category. It aims at reducing the empirical data to the extent at which only the relevant contents remain. The re-sult represents a content corpus, which still relates to the original material.

For an existing content category system, this interpretation approach constitutes the following three steps (Mayring 2008, p. 61 ff.):

1. Paraphrasing: A content category is paraphrased to a form solely represent-ing its essential contents. The resulting paraphrases are supposed to be for-mulated using a uniform language.

2. Generalisation: For the generated paraphrases, a specific abstraction level is defined and consequently applied. Thereby, paraphrases above the abstrac-tion level remain untouched, whereas those residing below the baseline are generalised.

3. Reduction: The meanings of the remaining paraphrases are compared. Simi-lar or duplicate paraphrases are removed; irrelevant paraphrases are deleted. Finally, the remaining paraphrases are aggregated to statements representing the contents of the analysed category.

Table 8.1 illustrates the result of this basic interpretation process in the form of a fictitious example, which is concerned with the integration of context informa-tion into Mobile Marketing campaigns.


Table 8.1: Fictitious Example of a Summarising QCA

Inter-viewee

Answer (Category)

Paraphrase Reduction Generalisation

1 I think Mobile

Marketing utilis-

ing context in-

formation has a

high potential for

the future.

Mobile Marketing

utilising context

information with

high potential

high potential a) Context-sensitive

Mobile Marketing

has high potential in

the future

b) Costs of Context

Information are still

an issue for Mobile

Marketing Cam-

paigns

2 The acquisition

costs for context

information have

to drop before

Mobile Market-

ing can take off.

Context information

acquisition costs

have to drop

Acquisition

costs still an

issue

3 Context-

sensitive Mobile

Marketing Cam-

paigns are an

important

weapon against

information over-

flow of mobile

users.

Context-sensitive

Mobile Marketing

campaigns are

weapons against

information over-

flow

Allows high

personalisation

Three interviewees were asked about the potential of context-sensitive Mobile Marketing campaigns for advertisers in the near future. In the analysis process, their answers were reduced to their essential content and generalised afterwards. Finally, answer (1) and (3) could be reduced to one statement and answer (2) by itself to another one.

8.1.3 Evaluation Process

Expert interviews constitute a method used to acquire empirical data about a cer-tain topic from experts in a specific domain (Gläser and Laudel 2009, p. 9 f.), whereas the QCA analyses and interprets the contents generated by any form of communication (Mayring 2008, p. 11). Consequently, combining both methods allows analysing the empirical data acquired from the expert interviews with the


QCA (Mayring 2008, p. 62 ff.). Figure 8.1 depicts the link between both meth-ods with the scope of this work.

Figure 8.1: Evaluation Process based on Expert Interviews and Qualita-tive Content Analysis

The evaluation process begins with the design and conducting of the expert in-terview guideline. At first, the research question to be addressed in the expert interviews is specified. Then, hypotheses supporting the main aspects of the re-search question are developed. For each hypothesis, several questions are de-rived based on the analysis of the impacts of context information on the tradi-tional commercialisation of mobile attention (cp. Chapter 4) and the IT artefact design (cp. Chapter 6).

Equipped with this interview guideline, the expert interviews were conducted61. The defined questions served as categories for the QCA (1). For each answer in a category, the steps paraphrasing, generalisation, and reduction were conducted (2). The process was repeated for each defined category (3). Finally, the evalua-

61 It has to be noted that the interview guideline was in English, whereas the interviews were

conducted in German. Furthermore, the naming of some terms has been translated to terms more likely to be used in practice (e.g. the term “mobile attention” became “mobile user contact”).

Derival of Interview

Questions

Interview Conduction

& Results

Hypotheses

Development

Spefication of

Research Question

Interview Questions as

Categories

Paraphrasing

Generalisation

Reduction & Statement

Development

Expert Interviews QCA

2

1

3


tion process was concluded with a review of the results for each hypotheses and a discussion of the implications for the initially specified research question.

8.2 Evaluation Research Question and Development of Hypotheses

The objective of the MoMeMa framework evaluation is to demonstrate the util-ity of the developed IT artifact (MoMeMa framework) to address the identified impacts of context information on the traditional commercialisation of mobile attention. Consequently, the respective research question is specified as follows:

Research Question: Are the proposed engineering recommendations for mobile media markets of context-sensitive mobile attention appropriate?

Based on this research question four hypotheses have been developed to support the defined research question. These hypotheses are supposed to cover the key aspects of the MoMeMa framework as well as the validity of assumed pre- and post-conditions.

Since context-sensitive Mobile Advertising campaigns are still hardly available in the industry (cp. Section 2.4), the first aspect to be evaluated constitutes whether or not Mobile Marketing Providers are actually planning to integrate context information into Mobile Marketing campaigns (precondition). The result of evaluating H1 helps to determine the relevance of the MoMeMa framework in practice.

Hypothesis H1: Mobile Marketing Providers are planning to integrate context information into Mobile Marketing campaigns.

Based on H1, hypothesis H2 assumes that context information generates impacts on the traditional commercialisation of mobile attention for Mobile Marketing Providers. If those impacts exist, they will affect all the key design aspects of a mobile media market platform (i.e. business model, ICT-infrastructure, and re-source allocation mechanism).

Hypothesis H2: Context information will create impacts on the traditional commercialisation of mobile attention and will affect all constituting parts of a mobile media market platform (business model, ICT-infrastructure, and alloca-tion mechanism).


Subsequently, the feasibility of appropriately addressing the identified impacts of context information by the MoMeMa framework for all the stakeholders Mo-bile Marketing Provider, advertisers, and mobile users, was evaluated.

Hypothesis H3: The occurring impacts of context information, with regard to the allocation of context-sensitive mobile attention, can be addressed by the de-veloped engineering recommendations for a mobile media market platform.

Finally, the main proposed engineering recommendations were evaluated for their technical and legal feasibility to be implemented in practice whilst consid-ering state-of-the-art ICT-infrastructure technology and existing EU data protec-tion frameworks.

Hypothesis H4: The proposed engineering requirements for mobile media mar-ket platforms are technically and legally feasible.

The interviewees chosen to test the outlined hypotheses and corresponding the data acquisition process is documented in the following section.

8.3 Interviewees and Data Acquisition

To conduct the expert interviews, invitations to several organisations operating in the mobile media ecosystem were issued (cp. Table 8.2)62.

Table 8.2: Organisations, which participated in the Expert Interviews

Name Organisation Type

allesklar.com AG Online / mobile Portal offering content personalised to every

German city

Deloitte & Touche GmbH Consultancy covering the areas of auditing, tax accountancy

and corporate finance

Detecon International IT-Business Consultancy in the ICT Sector

InteractiveMedia CCSP

GmbH

Marketer for Digital Media and Online Advertisements in Ger-

many

Nokia-Siemens Networks Provider of Telecommunication Equipment and Services

T-Systems International

GmbH

ICT Provider for multination Enterprises and Public Institutions

62 Please refer to Appendix B for detailed contact information of these organisations.


This portfolio of organisations covers the relevant aspects of the value network required to develop a mobile media market platform. Although, the expertise of each organisation in relation to the expert interview focused on a specific area, all organisations contributed to all questions to their best knowledge.

Starting from the top, the perspective of a Mobile Marketing Provider (allesklar.com) and of a Mobile Advertising Agency (InteractiveMedia) was covered. Furthermore, identity management and privacy aspects of mobile users were specifically covered by Deloitte. Regarding the validity of business models in the mobile Internet, Detecon offered its expertise. Finally, the aspects of the ICT-infrastructure could specifically be addressed by T-Systems and Nokia-Siemens-Networks (cp. Figure 8.2).

Figure 8.2: Knowledge Coverage of interviewed Organisations

The data acquisition through the expert interviews was comprised of several preparation tasks, the actual interview, and the processing of the interview re-sults. Firstly, initial contact to the organisation and eventually to the interviewee was established by either e-mail or telephone. Only persons working for several years in a specific field or domain were considered experts. Once the potential interviewee agreed to the interview, a common understanding about the inter-

Context Information Provider

(T-Systems)

Mobile Portal Provider(Allesklar)

Telco Business Consultancy

(Detecon)

Telco ICT Provider(Nokia-Siemens-

Networks)

Consultancy onIdentity and Privacy

(Deloitte)

Mobile Advertising Marketer

(InteractiveMedia)


view aspects was established. For this, the interviewee was provided with a PowerPoint presentation consisting of five slides, which illustrated a basic con-text-sensitive Mobile Advertising campaign scenario to be supported by a mo-bile media market platform (cp. Appendix C). Once the interviewee and the au-thor of this work came to a common understanding of this scenario and its de-fined prerequisites, an appointment for the actual interview was arranged.

The actual interview was conducted following a prepared interview guideline (contrary to open interviews), which was comprised of multiple questions de-rived from the developed hypotheses (cp. Appendix A). It consisted of three parts: The first part motivated the interviewee to address the potential of con-text-sensitive Mobile Marketing campaigns in the near future. Subsequently, the second part was concerned with the existence of impacts of context information, the utility of an engineering recommendation framework, as well as the general technical and legal feasibility of developing a mobile media market platform based on the proposed engineering recommendations. Finally, the third part en-couraged the interviewees to address open or not yet covered aspects relevant to this interview.

Following this guideline, either a personal interview at the organisation or a telephone interview was conducted. Interviews never took any longer than 90 minutes. They were not electronically recorded since no interviewee gave their consent. Instead, the author of this work took written notes. These were detailed out shortly after the interview and sent back to the interviewee for review and confirmation.

In total, seven interviews in six organisations were conducted between 1st May 2008 and 1st December 2008. For T-Systems, two employees of different de-partments participated in the interview. In total six interviews were conducted at the organisation of the interviewees, whereas for InteractiveMedia, a telephone interview was conducted. The interviews were solely conducted in German and the interview guideline was developed in English. When applicable, the wording (not the actual questions) of the guideline was refined incorporating the experi-ences of the last interview and finally being conformed to the wording of this thesis.


8.4 Data Analysis and Discussion of Results

The analysis of the empirical data acquired from the expert interviews was ana-lysed based on the quality content analysis (cp. Section 8.1.2). Due to the mana-geable complexity of the acquired empirical data, Microsoft Excel 200763 was used as a software tool to support the analysis process.

In the following sections, the analysis results are presented for each hypothesis in a summarised form and eventually against the background of the research question.

8.4.1 Potential of Context-sensitive Mobile Marketing Campaigns

The first hypothesis was concerned with the planned integration of context in-formation into Mobile Marketing campaigns in order to substantiate its rele-vance in the context of this work (cp. Section 2.5):

Hypothesis H1: Mobile Marketing Providers are planning to integrate context information into Mobile Marketing campaigns.

For Hypothesis H1, the interviewees were presented with three questions. The first question was concerned with the kind of context information provided by the mobile network and currently used by Mobile Advertising campaigns.

For the predominant number of interviewees location information about mobile users is currently the most applied type of context information for Mobile Ad-vertising campaigns. Time and identity profile information was considered rele-vant only in niche applications. Although, not directly provided by mobile net-works, the observable online behaviour of users on mobile websites (e.g. entered keywords or clicked links) was considered as relevant context information as well.

The second question was concerned with the kind of context information planned to be integrated into Mobile Advertising campaigns in the near future. The interviewees predicted a strong trend towards location and identity informa-tion about mobile users. Although other context information was also considered to be potentially beneficial, the market is not considered ready for this yet.

63 For more information on Microsoft Excel 2007, refer to: http://office.microsoft.com/de-

de/excel, accessed 2010-02-04.


Under the assumption of a broad availability of context-sensitive Mobile Adver-tising campaigns, the third question addressed the current drivers and obstacles for the integration of context information. In their response, the interviewees spoke with one voice on the benefits for improving the targeting of Mobile Ad-vertising campaigns through the application of context information. By contrast, the interviewees saw various obstacles on the road to context-sensitive Mobile Advertising campaigns. Expected privacy issues of mobile users were consid-ered a main hindrance. Besides these, costs for the acquisition of context infor-mation as well as the complexity of handling and maintaining large amounts of data generated by context-sensitive mobile profiles, were noted.

8.4.2 Impacts of Context Information on Mobile Marketing Providers

Hypothesis H2 was concerned with the potential impacts of context information on the traditional commercialisation of mobile attention in mobile media mar-kets (cp. Chapter 4):

Hypothesis H2: Context information will create impacts on the traditional commercialisation of mobile attention and will affect all constituting parts of a mobile media market platform (business model, ICT-infrastructure, and re-source allocation mechanism).

The first question was concerned with whether or not existing traditional mobile advertising platforms such as Google AdSense (Google Corporation 2009d) or Yahoo (Yahoo Corporation 2009b) were capable of enabling context-sensitive Mobile Advertising campaigns, without offering incentives to mobile users in exchange for their disclosure of context information.

The predominant opinion of the experts was that the active disclosure of per-sonal information requires the provision of directly perceivable incentives to mobile users. In this case, monetary incentives have been considered the most prospective form. However, the experts think that a mobile portal should pref-erably be able to provide benefits intrinsically for the mobile user in exchange for disclosing their personal information (e.g. via the personalisation of mobile content based on context information).

The second question was concerned with whether or not a common understand-ing about the semantic meaning of the applied context information, between all


participants of the mobile media market (Mobile Marketing Provider, advertisers and mobile user), has to be established.

In general, the interviewees recommended the introduction of a standard for identity profiles of mobile users. Furthermore, the need to integrate privacy po-lices into these identity profiles was identified. This identity standard should be based on the evaluation, which context information is actually required to pro-vide for a certain type of Mobile Advertising campaign. This would allow minimising the acquisition and use of personal information relevant for a given purpose.

The third question was concerned with whether or not context information changes the product mobile advertising space offered by Mobile Marketing Pro-viders in any way. Traditionally, advertisers target Mobile Advertising cam-paigns by bundling them to media content, which is typically consumed by their preferred audiences (Ehrlich 2008, p. 269). By contrast, the availability of con-text information enables advertisers to target individual mobile users based on their explicitly described usage situation. Consequently, the decision of adver-tisers to acquire mobile advertising space could be based on the actual character-istics of an individual mobile user, paying attention to their Mobile Advertising campaigns, rather than based on the content potentially attracting a preferred audience.

The interviewees did not agree that context information changes the product mobile advertising space. Nevertheless, there was almost overall consent that context information allows targeting mobile advertisements on a more individ-ual level. Thereby, the experts predicted that individual personal preferences of mobile users would become more relevant for the targeting of Mobile Advertis-ing campaigns compared to the current predominant content-based targeting. Finally, the experts mentioned that privacy issues of mobile users for context-sensitive Mobile Advertising campaigns would increase. This underlines the more personal nature of the mobile medium in relation to context information.

8.4.3 Engineering Recommendations Addressing the Impacts of

Context Information

Based on the identified and analysed impacts of context information on the tra-ditional commercialisation of mobile attention, engineering recommendations


have been developed. Thereby, the central recommendation concerns the re-source allocation mechanism for the mobile media market. Since other recom-mendations (i.e. for business model and ICT-infrastructure) directly depend on the resource allocation mechanism design, the corresponding questions of the expert interviews focussed on the proposed need for the individual pricing of mobile attention as well as the requirement of Mobile Marketing Providers to maintain a certain relevance of Mobile Advertising campaigns for mobile users (cp. Section 6.4.2).

Hypothesis H3: The occurring impacts of context information, with regard to the allocation of context-sensitive mobile attention, can be addressed by the de-veloped engineering recommendations for a mobile media market platform.

The first question involved static pricing mechanisms such as the CPM model and their appropriateness to price offered context-sensitive mobile user contacts. Since context information is able to individually describe the momentary usage situation of individual mobile users, is a traditional auction model (e.g. that of Google) or static pricing still reasonable? Are different pricing models required?

The interviewees uniformly proposed the need for a dynamic, interactive pricing mechanism for context-sensitive mobile user contacts for Mobile Advertising campaigns. This gives advertisers the opportunity to express their individual WTP. However, it was also stated that static pricing models would still be valid to some extent, since Mobile Marketing Providers simply might want to sell context-sensitive mobile user contacts for a static premium.

The second question aims at exploring if advertisers would take the opportunity to express their individual WTP as participants in an auction for context-sensitive mobile user contacts.

The majority of interviewees represented the opinion that advertisers will use context information to determine the relevance of individual mobile user con-tacts. In other words, context information allows filtering out irrelevant mobile users (e.g. those too far away from a certain POS). The remaining mobile users are expected to be acquired at a premium price. However, advertisers are con-sidered to welcome auctioning as a pricing mechanism for less relevant mobile user contacts.


The third question was concerned with the required relevance between mobile users and Mobile Advertising campaigns. Is it reasonable to sell mobile user contacts always to the highest biding advertiser, or does a Mobile Marketing Provider have to weight the submitted advertiser bids for an auction, in order to maintain a certain level of relevance between Mobile Advertising campaigns and mobile users?

Although the interviewees represented the opinion that Mobile Marketing Pro-viders should influence this process to some extent, the ideas for the actual im-plementations were rather diverse:

• Auction bids should be weighted by Mobile Marketing Providers.

• Advertisers should compensate the low relevance of their Mobile Advertising campaigns with incentives for mobile users.

• Mobile Marketing Providers should solely focus on highly detailed profiles of mobile users.

• Mobile Marketing Providers should limit the number of Mobile Advertising campaigns per mobile user and period of time.

In conclusion, this conglomerate of proposed concepts for maintaining the rele-vance underlines the necessity for Mobile Marketing Providers to install a re-spective mechanism, although the actual implementation remains unclear.

8.4.4 Feasibility of Proposed Engineering Recommendations

Finally, the proposed MoMeMa framework was evaluated for its feasibility to be technically implemented in practice. First, this concerned the ability of the ICT-infrastructure to support to the MIdMS requirements of mobile users, with a special focus on the management of context information (cp. Section 6.3.1.2.2). In addition, the processing capability of current ICT-infrastructures in order to deliver Mobile Advertising campaigns within an appropriate time was evaluated (cp. Section 6.4.3). Finally, the legality of processing the context-sensitive mo-bile attention profiles for Mobile Advertising campaigns was analysed from a practical perspective (cp. 6.2.3).

Hypothesis H4: The proposed engineering requirements for Mobile Media Market Platforms are technically and legally feasible.


The first question was concerned with an existing Mobile Marketing Provider’s technical ability to process market transactions for context-sensitive mobile at-tention. In other words, is the recommended mobile media market platform de-sign capable of storing and processing context-sensitive attention profiles based on current state-of-the-art ICT-infrastructures?

The interviewed experts certify that current state-of-the-art ICT-infrastructures in general have the capability to cope with the requirements of processing and managing context-sensitive attention profiles of mobile users. However, most of them still demand either minor or major upgrades. IdM systems operated by mobile network operators are genuinely predestined for this task, since the used primary context information originated from the mobile network. However, their distributed storage architecture makes it currently difficult to compile all avail-able mobile user information into one mobile user profile. In this regard, one expert demanded to separate storage of context information from other identity-related data to minimise the risk of privacy violations. Furthermore, one other expert was not sure how to deal with the huge amounts of data resulting in the storage, processing and monitoring of context-sensitive mobile user profiles. As a possible solution, the expert simply suggested ignoring or filtering irrelevant context information about mobile users.

The second question addressed the capability of current ICT-infrastructures to cope with the increased complexity and performance load imposed by process-ing context-sensitive attention profiles. In this regard, the experts uniformly agreed that ICT-infrastructures of today are completely capable of processing this kind of information. However, the experts stressed that this processing has to be accomplished at a reasonable cost and has to prevent privacy violations for mobile users. In the end, this may always be a compromise between perform-ance and occurring costs, which Mobile Marketing Providers have to balance.

The third question was concerned with the legality of processing context-sensitive mobile attention profiles with regard to the corresponding European Data Protection Directives (cp. Section 6.2.3). The uniform opinion of all ex-perts was that it is legal if a Mobile Marketing Provider complies with the re-spective EU directives and corresponding national implementations, regarding the protection of personal data. Thereby, the experts stressed the outstanding


importance of acquiring the consent of a mobile user in order to use their per-sonal data.

Based on the summarised results for each hypothesis, the following section dis-cusses the implications of this evaluation in the relation to the defined research question.

8.5 Evaluation Implications

By interpreting the result of the expert interviews, the evaluation implications can be assessed based on the defined research question:

Research Question: Are the proposed engineering recommendations for mobile media markets of context-sensitive mobile attention appropriate?

For Hypothesis H1, one can conclude that it has been confirmed by the experts. Context information in the form of location and identity information are already in use. An increasing use of context information is expected by most experts in the near future. Consequently, the expected increasing targeting effectiveness of Mobile Marketing campaigns outweighs the named obstacles.

The evaluation of the potential impacts of context information on the traditional commercialisation of mobile attention in mobile media markets (Hypothesis H2) has been substantiated by the interviewed experts. The central reason for this constitutes specific characteristics of context information. It results in the neces-sity of Mobile Marketing Providers to provide incentives for mobile users in ex-change for context information. This contrasts with traditional mobile marketing campaigns in which the online behaviour of mobile users is solely passively ob-served. Furthermore, a common understanding about context-sensitive attention profiles of mobile users has to be established among all market participants through – for instance, based on an identity standard. For traditional mobile at-tention, there was no need to archive this understanding for mobile users since they are simply being observed rather actively disclosing personal information to Mobile Marketing Providers. Finally, with the availability of context informa-tion, the value of mobile user contacts for advertisers is increasingly determined based on the relevance of an individual mobile user, rather than on the mobile content a mobile user is consuming. Consequently, the individual attention of a mobile user becomes increasingly the preferred economic good in mobile media markets once context information is available.


The proposed main engineering recommendations for a mobile media market platform (Hypothesis H3) have also been supported by the experts. They ac-knowledged the need for a dynamic, interactive pricing mechanism (i.e. auction) in order to enable advertisers to express their individual willingness-to-pay for context-sensitive mobile user contacts. At the same time, this allows Mobile Marketing Providers to increase their profits through extracting an increased buyer’s surplus from advertisers. In this regard, the experts do not confirm the advertiser’s willingness to accept this form of pricing mechanism for all mobile users, but at least for the less relevant ones. Finally, the experts agree to the ne-cessity of maintaining a certain level of relevance between mobile users and Mobile Advertising campaigns – however, with a large variety of different ideas for the actual implementation.

Finally, Hypothesis H4 aimed at the technological and legal feasibility of the proposed engineering recommendations. As far as the current technological fea-sibility of ICT-infrastructures enabling the necessary IdM systems are con-cerned, the experts did not find any obstacles, which could not be overcome. Nevertheless, they saw the need for minor as well as major architecture up-grades. In terms of processing power, the current ICT-infrastructures are consid-ered capable. However, the reasonability of costs and the protection of personal data have to be kept in mind. Finally, the experts considered mobile media mar-ket platforms which process and offer context-sensitive mobile attention legal, as long as they comply with the EU-directives and national implementations. Thereby, they highlighted the need to acquire user consent for personal data us-age.

Regarding the open issues section of the interview guideline, some experts men-tioned that they are concerned about the feasibility of context-sensitive Mobile Marketing campaigns across country borders. Experts doubted the availability of context information roaming across country borders and the sufficient data pro-tection outside the jurisdiction of a domestic Mobile Marketing Provider. Al-though, these aspects are relevant in practice, they are outside of the scope of this work.

In conclusion, by evaluating the key aspects of the proposed engineering rec-ommendation framework, it can be stated that the interviewed experts consider context information relevant for Mobile Marketing campaigns of today, and es-


pecially in the near future. Furthermore, they acknowledge several central im-pacts of context information on the traditional commercialisation of mobile user contacts or mobile attention respectively in mobile media markets. Finally, the proposed engineering recommendations, in order to address these impacts, were found to be reasonable as well as technically and legally feasible.

Although, the evaluation substantiated the utility of the MoMeMa framework from a practical point-to-view, several limitations of this evaluation have to be disclosed in the following section.

8.6 Limitations of the Evaluation

The acquisition and analysis of empirical data always imposes insufficiencies (Bortz and Döring 2006, p. 16) which have to be considered and disclosed when assessing an evaluation result64. This evaluation exhibits several conceptual limitations and further limitations with regard to the acquired and analysed con-tent.

Starting with conceptual issues, although the expert interviews addressed certain aspects of the mobile media domain, all the interviewed organisations use a cer-tain terminology within their focus of work. Therefore, despite the fact that ex-perts have been interviewed, a certain level of common understanding still had to be established using the initial application scenario. This may not have been accomplished to its full extent. Furthermore, the derived questions asked to sub-stantiate the developed hypotheses, may not have been completely accurate for this purpose, since there is not a standard process to generate these questions and define QCA categories based on them (Mayring 2008, p. 42).

Regarding the content related issues, the first limitation to be disclosed is that experts were questioned about the utility of a generic engineering recommenda-tion framework, rather than a concrete implementation of a mobile media market platform. This makes it more difficult for experts to assess the utility of the pro-posed engineering recommendations. Furthermore, context-sensitive Mobile Advertising campaigns, as discussed in the scope of this work, currently do not exist in practice. Consequently, the developed questions have been based on the experts’ assumptions of the future. Finally, only selected but nevertheless central 64 For a general overview about the limitations of empirical research methods, refer to Bortz

and Döring (2006, p. 16ff.)


aspects of the proposed MoMeMa framework have been evaluated rather than the complete framework concept.

Summarising the outlined limitations, one can conclude that the evaluation shows that the experts did not see any unreasonable engineering recommenda-tions and technical or legal obstacles, which could not be overcome by Mobile Marketing Providers. However, the utility of the entire MoMeMa framework could not be demonstrated. This will be possible once context-sensitive Mobile Advertising campaigns start to take off in practice and empirical case study-based evaluations or user surveys become feasible. Thus, the MoMeMa frame-work, as an IT artifact, outlines a proposed possible set of engineering recom-mendations for Mobile Marketing Providers to commercialise context-sensitive mobile attention.


This chapter documented the empirical evaluation of the developed MoMeMaengineering recommendation framework for the commercialisation of context-sensitive mobile attention in mobile media markets. For this, seven expert inter-views were conducted and the resulting empirical data was analysed using QCA.

Although the evaluation exhibited several limitations, the experts substantiated that context information will be become relevant for Mobile Marketing Adver-tising campaigns and will generate several significant impacts on the commer-cialisation of traditional mobile attention. The proposed MoMeMa framework is considered feasible to address those impacts by offering a corresponding engi-neering recommendation framework for mobile media market platforms.

Conclusion and Further Research 239

9 Conclusion and Further Research This thesis has provided new findings in the field of Mobile Marketing research. It provides new knowledge about the impacts of context information on tradi-tional commercialisation of mobile attention in mobile media markets. For this, it developed and documented an IT artifact, which guides Mobile Marketing Providers enabling context-sensitive Mobile Advertising campaigns to benefit from context information, whilst being able to cope with its challenges.

In the following Section 9.1, the thesis is summarised based on the taken re-search approach. Section 9.2 continues to highlight the main research contribu-tions of this work and Section 9.3 focuses on presenting the major implications for practice. Finally, this chapter concludes with Section 9.4 giving an outlook on possible further research, which the contributions of this thesis have enabled or raised.

9.1 Summary of the Thesis

The tremendous success of mobile data communications in recent years has led to increasing competition for the commercialisation of the attention of mobile users for Mobile Marketing campaigns. Consequently, Mobile Marketing Pro-viders are seeking means to differentiate their service. At the same time, adver-tisers push for more effective Mobile Marketing campaigns whereas mobile us-ers demand relevant contents on their mobile devices. Thus, the attention of mo-bile users increasingly becomes the scarce resource in today’s information soci-ety.

The availabilty of context information about mobile users allows Mobile Mar-keting Providers to address this market situation by offering advertisers access to this context information for the targeting of their Mobile Marketing cam-paigns. However, context information is assumed to have impacts on the tradi-tional commercialisation of mobile attention in mobile media markets. Conse-quently, Mobile Marketing Providers have to address these impacts in order to gain benefits from the distinct features of context information. Therefore, this work has aimed to explore, analyse, and address these impacts. By following the design research paradigm based on Hevner et al. (2004), a corresponding IT arti-fact, in the form of an engineering recommendation framework, has been devel-

240 Conclusion and Further Research

oped and evaluated. It provides the foundation for the understanding of this problem field and contributes to feasible solutions.

At first, Chapter 2 gave an overview about the state-of-the-art advertising-financed media applied to marketing campaigns. Along with the historical de-velopment of this media, the distinctive features of advertising-financed tradi-tional, online, and mobile media as vehicles for conducting marketing cam-paigns are presented.

In particular, mobile media constitutes the latest communication channel to ad-vertisers for their recipients. Its main feature currently exploited by Mobile Marketing campaigns is that it is more personal than any other media. Besides this intrinsic feature, context information provided by the mobile network offers knowledge about a mobile user’s current location, identity and time of day. Therefore, advertisers are enabled to target Mobile Marketing campaigns to the momentary usage situation of a mobile user. However, the potential benefits for advertisers (effectiveness) and mobile users (relevance) have to be bought, at the expense of several impacts of context information on the traditional commer-cialisation of mobile media performance from the perspective of Mobile Market-ing Providers. These impacts originate from the specific characteristics of con-text information in relation to Mobile Marketing campaigns. Although, several basic context-sensitive Mobile Marketing campaigns already exist in practice, these impacts had not been comprehensively analysed yet.

In order to explore and analyse the impacts of context information on the tradi-tional commercialisation of mobile media performance, Chapter 3 presented the development of a conceptional analysis framework. For this, a paradigm shift away from mobile media performance towards mobile attention, as scarce re-source in mobile media markets, was introduced. Based on this perspective, all aspects relevant for the commercialisation of mobile attention have been incor-porated into the analysis framework. It comprises the characterisation of mobile attention as an economic good in mobile media markets, the characteristics of a Mobile Marketing Provider’s mobile attention value chain as well as the influ-ence of mobile attention in mobile media markets, from the perspective of net-work economics.


Chapter 4 applied the previously developed conceptional analysis framework to explore and analyse the impacts of commercialising context-sensitive mobile attention in mobile media markets. Its main findings were:

• The intrinsic value of context-sensitive mobile attention significantly depends on the mobile user’s willingness to disclose context information.

• A common understanding for mobile attention profiles among all market par-ticipants (i.e. mobile users, advertisers, and Mobile Marketing Provider) is re-quired.

• The valuation of context-sensitive mobile attention is unique for each adver-tiser.

In order to address the previously explored and analysed impacts, Chapter 5presented an engineering reference model for mobile media markets based on the Market Engineering Framework of Weinhardt et al. (2003). It allows devel-oping and documenting engineering recommendations for mobile media markets along a proven model for electronic markets. Since the Market Engineering Framework was originally designed to suit electronic financial markets, some of its aspects were aligned and detailed out to fit the characteristics of mobile me-dia markets.

Based on the adapted engineering reference model for mobile media markets,Chapter 6 presented the development of engineering recommendations frame-work for mobile media markets (MoMeMa), which explicitly addresses the ex-plored impacts of context information on the traditional commercialisation of mobile attention. Its central aspect constitutes the implementation of a suitable resource allocation for context-sensitive mobile attention to address the distinct characteristics of context-sensitive mobile attention as an economic good in mo-bile media markets. Derived from the need to implement a dynamic, interactive pricing mechanism (business model), the application of a multi-attributive auc-tion format was recommended (resource allocation mechanism). On the one hand, it allows advertisers to express their individual WTP. On the other hand, it allows Mobile Marketing Providers to maintain a certain level of relevance be-tween Mobile Advertising campaigns and mobile users by incorporating this relevance into the auction or bidding process respectively. Finally, it is recom-mended that the underlying ICT-infrastructure of a mobile media market plat-


form has to be able to process transactions for mobile attention in real-time, to prevent content delivery delays of mobile users.

In order to demonstrate the technical feasibility of the proposed MoMeMaframework, Chapter 7 documented the implementation of a prototypical mobile media market platform. It featured a mobile portal as an interface to the mobile user and a mobile media market component for the trading mobile attention with advertisers. Thereby, the prototype follows a classic three-tier architecture and has been implemented using Microsoft software technology and programming languages.

Finally, the empirical evaluation of the MoMeMa framework as an IT artifact was documented in Chapter 8. For this, several interviews with experts from the mobile media domain were conducted. These experts substantiated the relevance of context information for Mobile Advertising campaigns in the near future, and supported the proposed engineering recommendations as feasible to address the impacts of context information on the traditional commercialisation of mobile attention from the perspective of a Mobile Marketing Provider.

9.2 Research Contributions

In the sense of the design science paradigm based on Hevner et al. (2004), this work aimed at solving a specific problem in the Mobile Marketing domain by creating and evaluating a novel IT artifact. The resulting major contributions of this thesis are summarised as follows:

• Analysis of Context-sensitive Mobile Attention: The analysis of context-sensitive mobile attention in mobile media markets has revealed several sig-nificant impacts on its traditional commercialisation from the perspective of Mobile Marketing Providers. It documented that context information is more than solely additional data about mobile users. Its distinctive features signifi-cantly change the characteristics of traditional mobile attention as an eco-nomic good in mobile media markets. This acquired knowledge constitutes an analysis theory of Type I in the sense of Gregor (2006) and contributes as foundation for the development of the IT artifact in form of the MoMeMaframework by providing an understanding of the problem field, which has been addressed by this work.


• Engineering Recommendation Framework for Mobile Media Markets of Context-sensitive Mobile Attention: The developed and evaluated IT arti-fact, represented by the MoMeMa framework, documents generic engineering recommendations for a mobile media market platform. It covers the design of the business model, resource allocation mechanism, and ICT-infrastructure component of a mobile media market platform and enables the addressing the impacts of context information on the traditional commercialisation of mobile attention.

• Implementation of Mobile Media Market Platform Prototype: The CoM-PaS prototype demonstrates the technical feasibility to implement a mobile media market platform for the commercialisation of context-sensitive mobile attention. This proof of concept constitutes a foundational IT artifact and con-tributes to the IS knowledge base (Hevner et al. 2004), and thereby can be the foundation for further behavioural research.

9.3 Practical Implications

The design science paradigm aims at solving problems in organisational con-texts by developing novel IT artifacts (Hevner et al. 2004). Because of that, these problems have to have a certain practical relevance. The contributions provided by this work for practice are summarised as follows:

• Generation of Problem Awareness: The analysis of context-sensitive mo-bile attention in mobile media markets provides understanding for the poten-tial impacts of context information on its traditional commercialisation. Con-sequently, Mobile Marketing Providers can become aware of the specific re-quirements for mobile media markets of context-sensitive mobile attention, and can search for means in order to meet them.

• Development Guideline for Mobile Media Markets: The MoMeMa frame-work demonstrates the feasibility to address the impacts of context informa-tion with specific design aspects for mobile media markets. At the same time, it provides a guideline for Mobile Marketing Providers to implement these mobile media market platforms in a systematic and less error-prone manner. For this, it documents the relevant cornerstones to be considered and ad-dressed in the development process.


• Prototype as a Foundation for the Implementation of Mobile Advertising Campaigns: The implemented CoMPaS prototype demonstrates the technical feasibility of mobile media market platforms enabling context-sensitive Mo-bile Advertising campaigns, whilst complying with the proposed engineering recommendations. Due to the novelty of context-sensitive Mobile Advertising campaigns, it can be used to empirically evaluate Mobile Advertising cam-paigns based on different mobile media market configurations. Furthermore, it allows testing, simulating and estimating required computing, and process-ing performance for market transactions of context-sensitive mobile attention.

Based on these presented contributions, the next section concludes this work by summarising problems unsolved in the context of this work. However, they are supposed to be addressed by further research.

9.4 Further Research

Based on the previously outlined contributions for research as well as practitio-ners, indicators and directions for fruitful contributions beyond the scope of this work (cp. Section 1.4) are discussed. With respect to the outlined limitations of the MoMeMa framework as the main contribution of this work, the following selected opportunities for further research are considered relevant:

• Development of Mobile Media Market Engineering Recommendations for Non-European Countries: The developed engineering recommendations are targeted to support Mobile Marketing Providers in Europe. However, Asia currently represents the leader in spending on Mobile Marketing campaigns (ABI Reseach - Technology and Market Intelligence 2009). Consequently, the MoMeMa framework should be evaluated against the Asian mobile media markets.

• Analysis of the Commercialisation of Mobile Attention in a Competitive Environment: The scope of this work focused solely on the analysis of con-text-sensitive mobile attention offered by a monopolistic Mobile Marketing Provider. This scenario may be realistic during its entrepreneurial days. How-ever, under the assumption of their success, competitors may arrive in the market. Consequently, research approaches addressing the behaviour and de-velopment of mobile media market platforms in a competitive environment can aid Mobile Marketing Providers to position themselves in this market ap-


propriately. Thus, the potential impacts of the market competition on the tra-ditional commercialisation of mobile attention or its characteristics as an eco-nomic good, can be considered prior and during the development of the mo-bile media market platform.

• Analysis of the Commercialisation of Mobile Attention for Mobile Mar-keting Campaigns in Mobile Communities: Equipped with rich mobile user profiles in combination with a high attention of mobile users, Mobile Com-munities Providers own a prospective position to commercialise the mobile attention of the users for Mobile Marketing campaigns. However, due to the fact that mobile users access community sites in order to communicate with other individuals rather than getting informed, the corresponding Mobile Marketing spendings do not live up to these exceptations. Nevertheless, the business model for most mobile community sites strongly relies on this kind of revenue streams. Therefore, the question has to be raised how one can tar-get the attention of mobile users mainly spend on communicating with other users rather than spend on consuming traditional mobile content bundled with Mobile Advertising campaigns (Kahl and Albers 2010).

• Aggregation of Distributed Mobile Attention Profiles of Mobile Users: Due to the potential existence of competitors in the market, it cannot be as-sumed that Mobile Marketing Providers can acquire and own all relevant con-text information about a mobile user. By observing the fixed as well mobile Internet, one can state that mobile users typically have multiple partial identi-ties. These represent only part of their real identity, which is currently re-quired in the prevailing application context (FIDIS 2006, p. 20). This imposes additional research questions on how Mobile Marketing Providers can acquire these distributed identities of a mobile user, and aggregate them to a mobile attention profile commonly understood by all mobile media market partici-pants.

• Analysis of Context-sensitive Mobile Attention in the Supply Chain: The analysis of context-sensitive mobile attention has been conducted along with the mobile attention value chain, which was derived from the way value crea-tion in two-sided mobile media markets is conducted. Thereby, mobile users have been considered as attention suppliers, Mobile Marketing Providers as attention manufacturers, and advertisers as attention consumers. The aim of


Mobile Marketing Providers is to acquire as much relevant context-rich mo-bile attention as possible and subsequently sell it on at the optimal price to advertisers. Consequently, this supply chain analogy offers the opportunity to apply knowledge from the domain of supply chain management (Arndt 2008), in order to analyse and optimise the activities of Mobile Marketing Providers in this value creation process.

• Empirical Evaluation of specific Mobile Media Market Platform Imple-mentations: The proposed engineering recommendations for mobile media market platforms provide a feasible generic approach on how to commercial-ise context-sensitive mobile attention. This means that engineering recom-mendations have to be highly abstract (e.g. “use multi-attributive auctions as allocation mechanism”). Consequently, empirical research is needed, which aims at acquiring knowledge on the utility of specific implemented mobile media market platforms. This may start with the identification of relevant context information for a category of Mobile Advertising campaigns. Fur-thermore, it is also interesting to evaluate the value of combining actively dis-closed context information (e.g. location information) by mobile users, with passively acquired online behaviour data (e.g. click-streams). Additional re-search could be conducted in order to empirically evaluate feasible matching concepts for attention and targeting profiles. Finally, this leads towards the empirical evaluation of different multi-attributive auction formats and con-figurations.

• Development of Negotiation Mechanisms for the Disclosure of Context Information: The value of mobile attention significantly depends on the will-ingness of a mobile user to disclose their personal information. Consequently, Mobile Marketing Providers have to provide mobile users with incentives to do so (cp. Section 3.2.1). Therefore, research regarding the preferred incen-tives of a specific mobile user could help Mobile Marketing Providers apply the most effective incentives for a specific offering. In this regard, it would also make sense to develop a negotiation mechanism for personal information of mobile users. This enables Mobile Marketing Providers to negotiate the in-centives for the disclosure of the required context information to target a Mo-bile Marketing campaign. Thereby, this negotiation mechanism allows both parties to express and communicate their demands and negotiate an agree-ment.


• Evaluation of Design Aspects of Context-sensitive Mobile Advertising Campaigns: One of the aspects of context-sensitive Mobile Marketing cam-paigns, which have been completely excluded from the scope of this work, constitutes the design of the Mobile Marketing campaigns itself. Conse-quently, research approaches are needed to order to explore if novel design concepts for context-sensitive Mobile Marketing campaigns are required. For instance, Radmacher (2007b) stresses the need to make the mechanism behind mobile products or service recommendations transparent to the mobile user. This allows to establish trust as well as to aid the mobile user in assessing the value of the provided Mobile Advertising message.

• Analysis of additional Context-sensitive Mobile Marketing Campaigns: This work solely analyses pull-based context-sensitive Mobile Advertise-ments as a subclass of Mobile Marketing campaigns. However, Mobile Mar-keting comprises more concepts such as mobile direct response marketing, mobile permission marketing (e.g. push messages) or mobile customer rela-tionship management (cp. Section 2.4.2), which are worth analysing for im-pacts of context information.

The outlined further research directions document the early stage of the research on the commercialisation of context-sensitive mobile attention in mobile media markets. The explored impacts of context information on the commercialisation of mobile attention and the provided means to address them (i.e. MoMeMa framework), is supposed to stimulate the number of Mobile Marketing Providers enabling context-sensitive Mobile Marketing campaigns in practice. If this suc-ceeds, it could open the door for new behavioural science research towards a better understanding of the impacts of context-sensitive Mobile Marketing cam-paigns on the behaviour of mobile users and advertisers.

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Appendix A: Expert Interview Design 269

Appendix A: Expert Interview Design

Research Question

Are the proposed engineering recommendations for mobile media markets of context-sensitive mobile attention appropriate?

Related Hypotheses Framework

H1: Mobile Marketing Providers are planning to integrate context information into Mobile Marketing campaigns.

H2: Context information will create impacts on the traditional commercialisa-tion of mobile attention and will affect all constituting parts of a mobile me-dia market platform (business model, ICT-infrastructure, and resource allo-cation mechanism).

H3: The occurring impacts of context information with regard to the allocation of context-sensitive mobile attention can be addressed by the developed en-gineering recommendations for a mobile media market platform.

H4: The proposed engineering requirements for a mobile media market platform are technically and legally feasible.

270 Appendix A: Expert Interview Design

Part 1: Integration of Context Information into Mobile Marketing cam-

paigns

• Which kind of context information provided by the mobile network is cur-rently used to target / personalise Mobile Advertising campaigns? General priority of context information integration? Any lessons learned?

• Is there any context information, which is supposed to be integrated into Mo-bile Advertising applications in the near future?

• Which are the current drivers and/or obstacles for integrating context informa-tion into Mobile Advertising campaigns?

Part 2: Impacts of and design requirements for Context-Sensitive Mobile

Attention in Mobile Media Markets

• Can plain advertising platforms such as Google AdSense or AdMob.com pro-vide context-sensitive information for Mobile advertising campaigns? Or does a Mobile Marketing Provider need to offer ID centric services which attract mobile users? Do mobile users reveal personal information only in exchange for content, services, or incentives? What kinds of incentives are required?

• Has a common understanding between the mobile user, advertiser and Mobile Marketing Provider, about the underlying identity (attributes) of a mobile user, need to be established? Do we need a new identity concept?

• How does context information change the product of a Mobile Marketing Provider? Do advertisers no longer acquire virtual advertising space? Or do they instead compete for the attention of mobile users in their current context?

Appendix A: Expert Interview Design 271

• Do static pricing mechanisms (e.g. CPM) still apply to context-sensitive at-tention of mobile users? Are traditional auction models (e.g. Google) suffi-cient for such business models? Do we need new auction models? If yes, have you already implemented some of those models?

• Can or will advertisers evaluate the individual (monetary) value of mobile attention according to its current context, and apply this value as a bid in an auction (adoption of concept)? Or can context information only be used to improve the targeting / personalisation of Mobile Advertising campaigns?

• Should Mobile Marketing Providers evaluate/weight bids of advertisers for the attention of a mobile user, in order to ensure a general level of relevance for this mobile user? I.e. contact to the mobile user is not necessarily given to the highest bidder.

• Can transaction for context-sensitive attention be processed on current Mobile Marketing Provider ICT-infrastructures? Or does it additionally require an Identity Management System to manage context-sensitive Customer Contacts and comply with the legal framework?

• Are ICT-infrastructures of today able to cope with higher complexity and per-formance load caused by context information?

• Are transactions regarding context-sensitive mobile attention for all partici-pants feasible from a legal perspective? Especially, regarding the European Data Protection Directive.

272 Appendix A: Expert Interview Design

Part 3: Open Issues of the Interview Partner

• Did I miss anything? Do you have something to add? Which topics are also relevant from your perspective?

• Are there any open issues we should discuss?

Appendix B: Interviewed Organisations 273

Appendix B: Interviewed Organisations

Name Contact Address

allesklar.com AG Am Turm 40

53721 Siegburg

Germany

Deloitte & Touche GmbH Franklinstraße 50

60486 Frankfurt am Main

Germany

Detecon GmbH Oberkasseler Straße 2

53227 Bonn

Germany

InteractiveMedia CCSP GmbH Fischerstraße 49

40477 Düsseldorf

Germany

Nokia-Siemens Networks Sankt-Martin-Straße 76

81541 München

Germany

T-Systems International GmbH Hahnstraße 43d

60528 Frankfurt am Main

Germany

Appendix C: Expert Intervi

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ew Introduction Slides 277

Aus unserem Verlagsprogramm: � � Christian Schlereth Optimale Preisgestaltung von internetbasierten Diensten Hamburg 2010 / 200 Seiten / ISBN 978-3-8300-5259-3 Natalie Kink Methodologie der empirischen Wirkungsanalyse von Informations- und Kommunikationstechnologien Analyse des Methodenpotenzials von Fallstudien, Experimenten und Surveys Hamburg 2010 / 248 Seiten / ISBN 978-3-8300-4779-7 Mike Radmacher Transparente mobile Empfehlungssysteme Gestaltung und Einfluss auf die Kundenbindung mobiler Dienste Hamburg 2010 / 372 Seiten / ISBN 978-3-8300-4736-0 Frank Mohr Empirische Untersuchung und Metaanalyse zur Akzeptanz der elektronischen Gesundheitskarte für Deutschland Hamburg 2010 / 624 Seiten / ISBN 978-3-8300-5280-7 Andreas Prieß Ganzheitliche Informationssystemarchitektur als Basis des strategischen Informationsmanagements an Hochschulen Hamburg 2009 / 404 Seiten / ISBN 978-3-8300-4684-4 Thomas Balzer Fernabsatzrechtliche Informationspflichten im M-Commerce Eine rechtsvergleichende Studie am Beispiel Handyklingeltonvertrag Hamburg 2009 / 180 Seiten / ISBN 978-3-8300-4112-2 Dietmar Georg Wiedemann Entwicklung und empirische Überprüfung einer Theorie zu Mobile Viral Marketing Ein Methoden-Mix Hamburg 2009 / 366 Seiten / ISBN 978-3-8300-4614-1 Monika Kriewald Situationsabhängiges mobiles Customer Relationship Management Analysen – Wettbewerbsvorteile – Beispiele Hamburg 2007 / 328 Seiten / ISBN 978-3-8300-3150-5 Arne Meyer-Ramien Strategische Gruppen in der Mobiltelekommunikationsindustrie Eine globale Wettbewerbsanalyse der Mobiltelekommunikationsoperatoren Hamburg 2007 / 614 Seiten / ISBN 978-3-8300-2981-6 Stefan Figge Innovatives Mobile Marketing Kontextabhängige Kundenansprache mit Hilfe mobiler Portale Hamburg 2007 / 392 Seiten / ISBN 978-3-8300-2652-5

Documents

Commercialisation of Context-Sensitive Mobile Attention in Mobile Media Markets