Mobile advertisement is a very difficult area to get a meaningful result in spite of its potential. Most mobile ads are still delivered by in-app banner or search result like on-line advertisement. And many players are trying to break this limit by connecting their advertisement platform to other features. One of the mainly used platform is location related platform. In terms of ‘SoLoMo’ (Social Location Mobile), location gets more efficient feedback from users compared to general mobile ads such as a banner and search result. But sometimes the data or figure which differentiates location based ads from others doesn’t work in the internet business.
Recently, Chalkboard, a Singaporean location based advertisement company, shut down its business. Chalkboard launched its advertisement service in 2010 and had been growing fast in the industry. As I know, it had over 1,000 active users (retail shops) just last month. Even I interviewed with Bernard Leong, CTO and co-founder of Chalkboard, a few weeks ago. But according to some articles, Chalkboard failed to get fund to develop services and its management level decided to exit the business. We should listen to a real user’s voice from this case. I would like to explain this result through my perspective.
Screen Shot of Chalkboard in CrunchBase
Location advertisement prefers targeting on SMEs to big players. And I think most customers of Chalkboard might be small and mid sized retail shops. Because many big players such as nation-wide franchise or hypermarket want to use advertisement channel which has already shown its efficiency and effect. This conservative viewpoint makes location based ads business difficult to get large-scale customers. So some players closely focus on their target client such as ShopKick. The problem of SMEs for advertisement platform providers is that they are reluctant to pay for mobile ads. As you know, main interest of SMEs is not brand-building but revenue increase based on a clarified business model. Even though we persuade those small retailers with accurate targeting, they are pessimistic that those targeted messages will increase their sales. To solve this problem, it needs to think in other ways.
1. Make it clear and effective
In the case of ShopKick, it uses a differentiated method to lure customers into a shop. And it gives a loyalty program such as points rather than staying at the level that sends its bulk messages to a targeted user. ShopKick is similar to mobile based CRM (Customer Relation Management). So does Google Places.
2. Target other clients.
As I urged previously, advertisement for small retailers is very difficult to get sufficient advertisers. It needs to change its attention from small retailers to mid sized companies and above. Even though it targets at SMEs, you need to control the portion of B2B customers as your own customers. Or you need to make a plan to survive without inflow from SMEs for the time being.
In the end, mobile advertisement has a lot of opportunities while there isn’t a certain business model. Even though Chalkboard closed its business, new services will emerge.
Related Article on Chalkboard – http://tnw.co/Iuz7t6
Intro of Chalkboard