Eager to exploit the vast potential presented by media's rapidly converging and ever changing landscape, leading Hong Kong telecommunication player SmarTone-Vodafone is determined to capitalise on the new possibilities.
he charge is headed by chief executive Douglas Li, who recently aligned the telco with MyClick, a mobile marketing company which allows consumers with 3G camera-enabled phones to click on an ad across a number of media channels, redirecting them to promotional sites for a growing list of brands, which so far include the likes of CNN, Pizza Hut, Estee Lauder and Pacific Coffee.
Although not inherently new— the technology is similar to the QR code sweeping Japan — it reflects a growing desire from SmarTone-Vodafone to pursue the telco's ultimate goal — to become a media owner.
Li points out that much of the telco's shift in strategy has been based around news services, with other content like music videos and games playing a supporting role. Other telcos offer similar services, but SmarTone-Vodafone has taken things a step further, compiling news feeds, repackaging and producing what has effectively become its own text and video news service.
"For example, we are the only company which takes a raw Reuters feed and translates it into Chinese, and we are producing video segments on news and interviews, and putting it live onto our system for our customers to enjoy," says Li.
"In that sense you might say we have very gingerly moved into production, therefore moving into an area you might describe as media ownership," he says. "These are the first steps that we had to take."
Li notes that this direction has been partly driven by a determination to not be left behind, but also partly by advertisers, who are increasingly realising that the intimacy provided by a user's handset allows for a much deeper relationship between brands and their target consumers.
But the 'new media front' as Li describes it, is having some teething problems, perhaps most significantly in the development of a suitable business model that can be effectively adopted across the board, giving greater cohesion to the industry's offer to advertisers and media agencies.
And with lengthy stints in investment banking for a number of institutions and a CPA qualification under his belt before joining the telco as the founding CEO, Li is able to present himself as a man qualified to judge the viability of potential models.
According to Li, the key issue is how much advertising space they can realistically sell on a small screen, before it begins to adversely impact the consumer experience.
"We are very careful of having too much on such a small screen. It's not like a broadsheet newspaper. There is very limited space there, and we are very focused on the customer experience, so you have to be very careful about how to place advertising on these spaces," notes Li.
Li also points out that currently, it is difficult for advertisers to know exactly how many people they're reaching, a situation which he says must be rectified if the industry is to evolve further.
The core of the problem, Li believes, lies in the levels of knowledge and comfort consumers have in their mobile phones. He explains that, in many cases, consumers may have suitable handsets through which advertisers can deliver their messages, but often the consumers have their phones set up and enabled with the wrong protocols, which ultimately means audience reach can be difficult, if not impossible, to track.
Finally, there is the sophistication of the handsets themselves, along with operational issues.
"There's a complex web of issues here," says Li. "Firstly, if you look at the raw device, until it is of sufficient quality, it isn't going to work particularly well" .
"Nokia has only just started adopting the higher resolution QVGA screens," continues Li.
"The operating system, the processor speed, the internal memory management has got to be pretty good. Then the network has to be sorted out, because people have forgotten that it is actually the server that is hosting the content as well."
But for all the challenges Li is facing, there is clearly no place he would rather be.
"I'm a great believer in dealing with the present. Our industry is moving so quickly, not just in terms of technology but also in terms of business models, that the potential is seemingly so vast."
"I don't think you need to be a technologist, but you shouldn't be afraid of it either," he says.
"But you do need to have a very good understanding of what it means for the customer and what it means for the business."
