Keys to becoming a Euro Mobile Mogul

Bob Johnson

Adapting to change in what has always been considered a “recession-proof” industry has kept many adult professionals ahead of the game. And the smart money today is investing in the goldmine of Europe’s burgeoning mobile entertainment arena that according to some industry executives is a far more lucrative market than the U.S.

Unlike this country, where using handheld devices for entertainment is a relatively new phenomena, Europe has embraced “phones for fun” for nearly a decade. And with that comfort comes a wave of new providers who are sniffing out opportunity.

For those seeking to strike Euro gold, Europe is a far more lucrative market that the U.S. per head of population.

But there are key considerations the budding mobile mogul must consider before taking the plunge.

Christoph Hermes, managing director of Pink Adventure AG, operator of Switzerland-based mobile content portal PinkSim says that he has witnessed more and more new companies entering the mobile space. He says his company always welcomes new partners but notes that the key to success is diversification of services, proven billing methods like Premium SMS or WAP billing, and communication.

“We believe high quality content combined with an attractive pricing is the winning combination for mobile success in Europe and beyond. Furthermore customers don’t want to get ripped off. So a fair communication of terms and conditions is also an important factor. These will bring long customer lifetimes and in the end more turnover,” he says.

Monetizing mobile traffic is always of paramount importance and that means easy billing, according to Hermes. He says that European billing — especially in Germany — must be an “easy, discreet and comfortable” user experience. “Everything is billed on his mobile invoice. Of course, there are alternatives as well, like online billing and premium voice,” Hermes says.

The executive’s choice is Premium SMS and WAP (wireless application protocol) billing.

Kieran O’Keefe, CEO of London-based mobile ad network Reporo agrees. “U.S. premium sites who wish to penetrate Europe should beware of just offering credit card as the payment option. Credit card penetration is not that high in some European countries such as Germany, so many will not be able to pay for content if you do not offer operator billing.”

O’Keefe adds that the European market for mobile adult content is a much larger market by revenue than the U.S. but entrepreneurs must “get your mobile billing right to be able to compete and make profit.”

And although the billing component is a major component of a successful mobile platform, monetizing means more than collecting funds.

Reporo’s O’Keefe says the fundamental difference is the payment methods available to consumers in European nations.

“Most European mobile carriers offer their network users mobile-bill based payment options when buying content. So for example, in the U.K. you can visit a mobile site and with one click you can pay for a piece of adult content, including hardcore content. The cost goes straight to the subscriber’s mobile bill. This is effectively an impulse payment mechanism with no need for the user to go through cumbersome (key in credit card number, expiration date, etc. on a device), passion-killing credit card payment.”

O’Keefe also points out that the more successful mobile carriers often offer users regular payment options like multiple subscriptions to adult premium sites and not just a one-off purchase.

Although each country has its own rules when it comes to billing, O’Keefe maintains that operator billing gives the European user an impulse purchase mechanism that consistently sees European conversion rates to be 10 times higher than that in the U.S.

For those seeking to strike Euro gold, O’Keefe is optimistic, “ Europe is a far more lucrative market that the U.S. per head of population.”

But the executive cautions that high conversion rates mean that advertising rates tend to be correspondingly high. On the Reporo Mobile Ad network — one of the highest providers of mobile traffic in the European mobile market — a typical CPC bid would be 3-5 cents for the U.S. and 30-50 cents in Germany.

One company that’s uniquely adapted to the European billing arena is Top Bucks/Pink Visual. Sales director Kristin Wynters says that the company’s always looking to optimize surfers to their sites, but because the Europeans rely so heavily on SMS billing as a payment option — unlike the U.S. — it behooves her company to filter that traffic to other partners who can covert it better and offer a better experience to the surfer.

“The European SMS billing option allows for smaller charges more frequently, usually 4.95 per week. We notice with our foreign traffic the rebills compound quickly and the members stay quite a long time. Europeans also do not use smartphones as much as North Americans although we are seeing that grow,” Wynters says.

Although crucial, there’s more to the European mobile game than billing and payment methods. Content also plays a major role.

Barcelona-based Private Media Group’s mobile manager Karen Cuilla looks at all of the components of the company’s overall mobile strategy as playing pivotal roles in the European market, which includes a wide range of products.

‘The Private mobile strategy in Europe is to deliver our quality products to users providing the best user experience available depending upon their handset, territory and payment options available. As the European mobile market is extremely fragmented, with adult restrictions and operator payment options changing from operator to operator within the same territory, we have taken advantage of territory specific opportunities in limited territories where available,” Cuilla says.

Wynters echoes the need to satisfy users. She comments, “Each country has specific rules regarding content on mobile, for instance, Germany can only be softcore — on the tour and the members area. We try and use our content on white labels whenever possible and will utilize the provider’s content if needed.”

And would-be European mobile mavens can’t forget about the devices themselves.

Private offers its membership cross platform for both iPhones and the Android operating system with one membership that allows access to both web and mobile services with credit card billing.

The two device options, Cuilla says, have greatly monopolized its smartphone traffic — as much as 75 percent — due to the advanced media players and browser experience in both.

But Hermes sees smartphones running on Symbian OS as the biggest player in Europe right now, admitting however that Apple’s iPhone continues to grow and grab a larger portion of the market.

Hermes adds that Microsoft, Google Phones and Nokia still hold a presence as well.

Another Private strategy employs specific territory sites in local languages with operator billing covering all handsets including feature and smartphones, according to Cuilla.

In addition, the company’s Gamelink and Maleflixxx sister companies are also integrated into the overall European strategy in order to cover all of the bases. The websites are mobilized enabling users to purchase and access content from their PCs, Macs, smartphone devices and tablets.

Being region-smart also pays off for Private. The company uses its affiliate relationships to provide mobile specific galleries and sales tools on a regular basis as well as collaborating with other territory-specific mobile affiliate programs.

Industry news in the last few months indicates that tablets are also becoming mobile market drivers. Although tablets are still in the honeymoon phase both in the U.S. and Europe, they are making headway.

“Tablets,” Hermes says, are still a niche product in Europe as far as mobile use is concerned and too expensive. “The consumer model has to be prepared more user friendly.”

In contrast, feature phones — a staple in Europe longer than in the U.S. — are being slowly being phased out both here and abroad.

Hermes predicts, “Smartphones will replace feature phones more and more. Of course it will take some time, but if you look at some actual statistics you can see the number of smartphones is rising dramatically. In the beginning of 2011 more than 60 percent of all mobile device users are using some kind of smartphone. This number will rise up to 70 percent by the end of the year.”

Cuilla agrees that smartphones are “definitely replacing feature phones” pointing to Private’s regular monthly increase in smartphone users to their sites. But she cautions that the European user base is still slightly behind the U.S. in smartphone usage and the need to deliver to feature phones still exits. Additionally the European market is more hesitant to purchase via credit card on handsets, Cuilla says, which has attributed to Private’s strategy of implementing operator billing options in applicable countries.

Cuilla sums it up saying; “Smartphone and tablet traffic will continue to grow at an important rate over the next couple of years. I believe alternative payment methods will continue to allow growth in the industry. Users will demand superior user experienceand more interactive and geocentric products.”