Funambol recently conducted an online survey and found there is good potential for an ad-funded mobile e-mail service – and it doesn’t necessarily need to be free to end-users.

Hal Steger -Funambol VP of Marketing

The survey revealed that end-users are paying as much as $30 a month for mobile e-mail, but the average was $15 a month. Then they were asked how much they would be willing to pay for an ad-based service, and the average was $6. Funambol Vice President of Marketing Hal Steger said he assumed if a service were ad-supported, it should be free. However, “you can use a hybrid pricing model where you charge a nominal fee and still show the ads to get additional revenue,” he said.

Some things clearly are not acceptable, though. Seventy-nine percent of people said they would not be willing to watch a brief video ad daily if it meant a free e-mail service.

Several other results of the survey were surprising. First, users who tested the Funambol service said the ads did not affect the usability of the mobile e-mail much or at all. That’s a good sign as it wasn’t clear beforehand if people would view the ads as spam or irritating, according to Steger.

Second, participants looked at an average 500 ads during a month. “That was a lot more than we thought,” by a factor of three to four times what was expected, he said.

Third, 84% would recommend that other people try an ad-funded mobile e-mail service, pointing to the importance of viral adoption to make a successful service.

Another thing that became evident is the balancing act between showing enough of an ad to make it effective but not so much that end-users feel it’s getting in the way, Steger said. During the survey period, Funambol used micro banner ads and gave users the option to get more information via a mobile Website, SMS or by making a phone call. The most popular option was visiting a mobile Website.

Funambol does not offer an e-mail service directly to consumers; it works through carriers, portals and other companies, but it made its software available for the survey, which involved people using Nokia Series 60 handsets.

Funambol is offering the report “Market Potential for Ad-funded Mobile Email” for free at http://www.funambol.com/solutions/library.php.