aimm News

By Rory Maguire, Managing Director, AIME

True to the 21st century civilisation that Europeans have developed over the past 100 years or so, a good lynching party has to start with a healthy debate.

The healthy but very heated debate was provided to us courtesy of World Telemedia, and the stage was set with three participants; myself as MD of AIME, Jonathan Levack, the fresh-into-the-company policy maker at UK premium rate regulator PhonepayPlus and in the middle, our beloved Telemedia star Paul Skeldon. The topic for debate: Busting the Affiliate Marketing Issues.

Earlier in the day, several World Telemedia attendees and AIME met, courtesy of Oxygen8’s meeting room at the top of the spiral staircase, to discuss how it would be possible to both utilise affiliate marketing for internet based mobile-charged products, but also to remain operational in the UK. At this point of time, it feels to a large quantity of premium rate merchants that utilising affiliate marketing in the UK brings a very high risk to their companies.

Some of the companies present had been subjected to PhonepayPlus Emergency Procedures in June and July due to malware that had seized their advertising in the hope to make the author a quick buck over a few days. Other companies were genuinely frightened to continue marketing to UK consumers in fear of the same issue and the phrase “the UK is closed for business” came up many times.

The same malware and others, it was reported to me, pop up in other countries, but the advertisers, often notified by the local regulator / trade body or competitor, deal with the malware or rogue affiliate swiftly, will refund affected consumers if any and will notify their affiliate marketing of the issue, sometimes instructing cessation of business with the sub-affiliate. So why is the UK different?

The opportunity to discuss this came up in the mid-morning session. I was given the stage to present my view first, which is that whenever there is money available in the internet environment, there will be scammers ready to fleece both businesses and consumers of that money. The internet provides a great hiding place for low level scammers.

In the case of the charge-to-mobile industry, service providers are putting their marketing money into the internet in exchange for good leads from diverse sites that consumers may visit. Affiliate marketing – pay on results – is very efficient for lead generation, but a scammer will work out quickly that while only a few consumers will buy the product based on its description, even more will buy the product if it comes with a promise of a high value freebie. Shopping vouchers, free movies, free software all seem to work well. The scammer is after the marketing money, not the consumer’s money, but consumers will have been misled and damaged in the process.

As the providers of the services put in place mechanisms to deal with the known scams, the scammers have come up with the next great idea. The latest one is to lock the browser with a virus and offer unlocking only if the consumer signs up to an offer.

As an advertiser, the trick is to ensure that your detection mechanisms are constantly evolving to detect consumers entering your service via false promises or malware, use reputable Affiliate Networks and ensure contracts with them are sound. As a consumer, don’t go browsing around without virus protection (who does?), don’t download dodgy software and if you were promised something at the beginning of your journey that looks different to the offer at the end of the journey, don’t buy! It feels like common sense to me.

Over to Jonathan Levack for PhonepayPlus’s view of the issue. I am not sure that he got a chance! The poor man was there to represent his organisation and personally did not deserve the verbal bashing that he received on their behalf, but the mood was definitely that of an angry mob and not the usual disgruntled individual.

Serious comments came from the floor about the deployment of their Emergency process and the subsequent Tribunal decisions, “why did you not report this to the police?”, “why did you not call us first?”, “the UK is hostile to us now”, “how can I be held responsible for the illegal act of another party?” and many others. At one point, the conversation heat was so high, that it the verbal lynching may have turned to a physical one. All the audience needed was wood, rope and nails to complete the job.

I have never seen such collective anger and it is truly distressing to see the industry and regulator so far apart on this topic. There is a lot of work to do to recover from where we now are.

If you are affected by any of the issues discussed here, you can write to AIME on info@aimm.co

This month the Exchange blog welcomes back Andy Shaw, CEO of Tectonic Interactive, who answers our questions on the latest developments at Tectonic and discusses a recent success which has bought interactive app voting to the XFactor UK audience:

After the huge success of the interactive voting app you ran for the Eurovision Song Content last June, what were the fresh challenges in bringing this interactive voting to the X Factor UK audience?

AS: From a technology perspective, the challenges were similar – handling sudden spikes of interactive traffic elegantly and counting votes with 100% accuracy.

For The X Factor, we worked closely with Tellybug, the developer of The X Factor app to ensure that ITV could control the vote section within the app. Tellybug are great to work with and we now, jointly, have an app platform and framework that can be used for any vote show internationally.

We also tested The X Factor service at load with a variety of user behaviours, so that we were confident that the service would respond well when 100,000’s iOS apps are opened and viewers start to interact on the Saturday night. ITV and Fremantle Media are leading the way in in-app voting and building confidence was key for a “go” decision.

What has been the response to the App so far?

AS: More than 800,000 people have downloaded The X Factor app so far and the live shows have just started, so we are expecting 100,000s more.

The response from viewers is really positive. We see high levels of engagement at key points throughout each show. We are doing lots of data analysis to understand how viewers use the app and in-app voting behaviour. We will learn a lot from this years X Factor.

How do you think interactive apps such as The X Factor voting app will change the way audiences interact with participation TV shows?

AS: People interact with TV shows if you make it easy for them. Broadcasters are running trials ranging from broadcaster-wide companion apps, show-specific interactive apps and show-specific html5 sites.

The Tectonic Platform can work with any of these approaches (via APIs). We are encouraged by the level of experimentation taking place.

From a format perspective, there is lots more potential: all quiz shows could have a home audience play-along via mobile and tablet – imagine kids running home after school to compete in a real-time school vs. school quiz; TV debates could involve a real-time approval rating from the home audience; talent shows could include IP voting as standard.

We have made it easy for broadcasters to launch new services and for app and web developers to plug into our platform.

Do you think App voting can shake up the paid participation landscape or will it just be an ancillary access route underneath phone-in and text votes?

AS: Premium-rate phone, Voice Short Codes and SMS are great because they are easy to use, payment is wrapped-in and everyone can do it.

But, where’s the growth? What new opportunities do phone and SMS create for the broadcasters, media creatives, brands or viewers?

There are an increasing number of frictionless payment methods – iTunes for iOS, GooglePlay is rolling out direct carrier billing and it won’t be long before you can simply click to add a payment to your broadband bill. Sponsors get greater value from consumers who are directly engaged with their brand. So, there are an increasing number of ways to monetize audience interaction easily.

I think that phone voting will be around for a while, but the future is audience interaction on the device that’s lying next to them on the sofa – their mobile or tablet.

What’s next for Tectonic Interactive?

AS: Our ambition is to make it quick and easy for TV and radio broadcasters to set up and manage any interactive service on any device.

Interactive technology can be complex, so we have plenty to work at and we have a number of projects on the go. We’ll let you know as they go public.

Andy Shaw is CEO of Tectonic Interactive, an associate member of AIME. For more information, please visit Tectonic Interactive’s website here.

Dear AIME Colleagues,

It’s true; the holidays are officially over and it is back to business for the Industry. While the warm weather might be heading over the horizon, the long

list of initiatives and Industry issues AIME is tackling is staying put, as we begin to look forward to a busy upcoming period with new managing director Rory Maguire now at the helm.

Waving goodbye to Summer with one hand and waving hello to Members with the other, our annual Summer networking drinks at the start of this month saw Oxygen8 and Cellcast kindly returning to sponsor what is always a great event to catch up with Industry peers.

Two potentially significant issues have crept onto AIME’s radar during what is supposed to be the relatively quiet months of Summer. A redraft to the European Payment Services Directive (PSD) has seen a threat to large sections of the existing mobile and fixed line services market that would no longer be exempted from being a Payment Service.  AIME produced a whitepaper to summarise the issue for members and analyse the potential implications of the PSD redraft. We’ll be meeting with the Financial Conduct Authority (FCA) at the beginning of October to lay plans of action.

Another potential issue that has been bought to AIME’s attention that could cause problems for some Members is the recent decision for the MNO’s self- regulated digital content rating system to be transferred to the responsibility of the British Board of Film Censors. This could potentially result in a ratings change for some of the digital content currently available – something AIME and members will be discussing with the BBFC during a workshop on the 26th September.

We will be meeting with PhonepayPlus this month for our quarterly meeting. Top of the agenda for us are the continuing issues to members and consumers caused by affiliate marketers and how our members can deal with this issue as well as discussion on prior permission process and the upcoming review of the 12th code in light of the Ofcom changes to unbundling.

Two forums will meet before the end of this month. The Voice Services Working Group will be discussing Voice Short Codes, Higher rate PRS and AIME’s response to government proposals to ensure customer service numbers are aligned in price to standard rate price points, and the Payforit/In-app/Mobile Payments Forum discussing successful environments for Payforit, updates on PFI v 4.1 and the changes to in-app charging on Android announced by Google.

I am sure it will be a busy few months for Rory, the AIME team (David Ashman, Ryan Hall, Fleur Bowles and Catherine Easton) and the industry, so please keep an eye out for AIME’s announcements and alerts in your inbox and make use of the new AIME online calendar here to keep abreast of upcoming events and forums.

I would like to extend AIMEs welcome to new members, SLA Mobile, GoVerifyIt, Perfect Information and Empello and a special thank you to ImpulsePay who have upgraded their membership to Sponsor Member.

Yours,

Edward Boddington

Chairman

By David Ashman, Director of Industry Affairs, AIME

At the same time that many European leaders are tentatively celebrating the first signs of economic recovery, a redraft to the EU Payment Services Directive sees the bureaucratic pen threatening to wipe-out 50% of the existing mobile and fixed line services market, whilst slamming the door shut on one of the sector’s growth opportunities.

The Damocles Sword of regulation may be nothing new. Since the recession began in 2008, AIMEs action has narrowly averted the closure of the Participation TV sector, following EU changes to advertising definitions; as the Telecoms regulator drags its heels AIME has fought hard for recognition that ancient spending caps have strained margins eroded by inflation; whilst AIME has fought a constant stream of battles with pot shots being taken at individual verticals in turn, the corral has been tightened on the herd, rather than the lasso on the rogue.

However, as painful as these episodes have been, they pale in significance to the impact that the current draft of the exemption for network operators inside the Payment Services Directive would have if ratified by the EU.  This threat is different for three especial reasons.

Firstly, the scale. Assuming that network operators do not wish to become registered Payment Service Providers with the changes to accounting, financial reserves and billing architecture this would involve, AIME has identified 14 content verticals, across both Mobile and Fixed Line access mechanisms, which would likely be unable to continue.  These include some of the bedrocks of the sector, such as charity donations, TV voting, competitions entry, virtual currency, gaming and chat.

Secondly, the pan-European application.  Previously threats have been confined to nationally set regulations, or an erroneous interpretation of an EU directive by a single member state.  The impact, whilst significant within that territory, has been marginal within a company’s global operation. The threat on this occasion would be hardcoded into European law, forcing its adoption, with no opportunity for dilution, into the legislative framework of 28 countries.

Finally, the window for reform is limited. Irrespective of the will of a member state’s own Parliament, European law, with very few exceptions, takes precedent over nationally set laws or standards. Member states have scope to raise, not lower, the bar set by the EU. Any subsequent amendment to the exemption would therefore require change at a European level, a complicated and indefinable slow process to pass the EU Commission, European Parliament and Council of Ministers in turn.

To avert this damaging blow, action is necessary now, or the industry across Europe will be locked into a binding framework for many years to come.  AIME ‘s relationship with the UK Treasury and sector regulators has given us a good foundation, though to be successful we must now spread the word amongst their European counterparts and unite industry providers across Europe in a collective campaign to save the market. It is imperative that those companies who traditionally sit on the sidelines, now take a stand, join AIME and ensure we have the backing necessary to send a very clear message.

AIME has produced a white paper on the changes proposed to the Payment Services Directive, which is available for download from the AIME website.

This month, the Exchange blog is joined by Matt Charles of Showcaster and Grabyo, who’ll be answering our questions on the recent launch of Grabyo; an exciting new way to share TV clips through social media.

What is Grabyo and how do viewers use it?

In short, the idea is that with one click viewers can grab the last 20 seconds of what they are watching on television and share it with their own comments on Facebook and Twitter.

We’ve developed this with our ShowCaster team, so we have put plenty of experience from working with a number of broadcasters into the launch of Grabyo with Britain and Ireland’s Next Top Model and the show’s sponsors TRESemmé on the Sky Living channel.

Users do not need to download an application and Grabyo works in whichever way they are watching television. They simply go to the website, select the programme and click to record a clip, which can then be instantly shared through a link on social networks.

The clips incorporate promotional messages and advertising, allowing sponsors to extend their association with the show to the social conversation, in this case by promoting hair care products.

Can this used in any Broadcasted show or are there limitations?

Conceptually, Grabyo could work with any televised programme or platform, but of course there are always issues to consider around rights.  Working with all parties in the broadcast value chain is the best approach, from broadcasters, production companies, right through to brands.

What are the main commercial opportunities and applications for Grabyo?

It’s a new ad revenue stream for broadcasters. The idea is that viewers will naturally want to share their favourite moments with their friends via social media, increasing the visibility of the live show and exposure to the broadcasters programmes and on demand platforms with a better experience provided via video clips.

Tagged onto the start and end of the clip, brand stings and advertising from the broadcaster and show sponsor can be added to extend their brand reach and association with the show, as well as increasing the online conversation around the show. In BINTM’s case, show sponsor TRESemmé took the promotion of their hair care products into the digital age.

Won’t viewers be put off by advertising messages being added to the clips they share?

We don’t think so. Whether users will tolerate sponsorship of clips is something that only time will tell, but it’s important to remember that the show sponsor is partnering with the show because the audience demographic is relevant to their brand – therefore the adverts attached the clips are also relevant to the audience, making it less likely viewers will be put off.

For Grabyo to realise its potential, it needs to achieve scale – something that is possible with the power of social media. With Grabyo’s capabilities, added to the rise in adoption of smartphones and tablet devices, it seems that the use of video clips will only continue to rise, so Grabyo is well placed to add an extra level of engagement as well as a new experience to popular broadcast content.

More information on Grabyo can be found on the website here: www.grabyo.com or to contact Matt, just leave your contact details here: http://about.grabyo.com/