Acquisitions and mobile advertising campaigns show growing interest in the field.
Phone calls, text messages and access to subscription content, all coming to your phone courtesy of 
advertising.
The interest in mobile advertising by the online community, as well as wireless operators and vendors, continues to grow. Online giants like Google and Yahoo! continue to push their way into the arena. MySpace has launched an ad-supported mobile site and its owner, Fox Interactive, plans to do the same with more sites. Nokia doesn’t want to be left out of the game, and Nokia’s former boss has launched an ad-supported mobile virtual network operator.
With traditional TV, newspaper and radio advertising declining, these companies are all looking at a future of mobile advertising akin to what is happening on the Internet. The research firm TNS Media Intelligence says Internet advertising increased 17.7% during the first six months of 2007, compared to the same period in 2006. Some $5.52 billion went to Website ads. Some analysts think mobile advertising will reach that level in the next few years.
The ad-supported MVNO, called Blyk, launched in the U.K. in late September, with plans to go into other European countries next year. Blyk, co-founded by former Nokia president Pekka Ala-Pietila, provides free voice minutes and text messaging to users if they accept advertising on their phones. Users also agree to provide Blyk with information about their spending habits and planned purchases.
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Nokia recently acquired Enpocket, which
has technology to send mobile ads via
text, WAP pages or using video. |
Blyk isn’t the first ad-supported carrier. Virgin Mobile USA last year created its Sugar Mama program that lets customers earn free minutes by accepting advertising messages. Virgin says 1,000 new customers sign on to the Sugar Mama program every day and that program has given out more than 9 million free minutes.
Gareth McLachlan, COO of AdaptiveMobile, says the technology company is working with an Asian carrier that offers a similar ad-supported model. In that case, on an opt-in basis, SMS messages are converted to an MMS by AdaptiveMobile and an ad is inserted as a video clip or photograph or banner ad. He cites another case where a Middle Eastern operator is providing free mobile voice and data supported by ads.
A large automobile manufacturer wanted to run an ad campaign in the U.K. recently, targeting specific demographic groups with text messages, McLachlan says.
The manufacturer was considering paying to send SMS messages to mobile numbers it had acquired. Instead, the agency used basic customer information through a carrier that customers allowed to be shared, including what kind of phone they had, how much money they spent and what part of the country they lived in.
In another case, Vodafone is using Amobee’s technology in the Czech Republic to offer free text messaging to subscribers if they accept ads on their phones.
A SLICE OF THE PIE
It’s not just operators building advertising steam. MySpace Mobile, which has been available only on a subscription basis through some operators, started providing free access on phones in September. The access is supported by advertising provided through Millennial Media.
Fox Interactive Media, which operates MySpace, says it plans to launch similar ad-support mobile sites for other of its properties, including IGN, FoxSports.com, AskMen and RottenTomatoes.com.
MySpace Mobile has been available to subscribers of AT&T and Helio on a subscription basis, and T-Mobile USA recently announced it would offer the portal for $1.99 a month. Fox Interactive’s decision to use ads opens the portal to any mobile phone for free, although AT&T and T-Mobile USA subscribers can continue to pay for access if they don’t want the ads and to access “premium” services.
Paul Palmieri, president and CEO of Millennial Media, thinks the ad-supported model will be the way mobile services like MySpace will be offered in the future.
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Milennial Media President and CEO
Paul Palmieri thinks the ad-supported
model will be the way mobile services like
MySpace will be offered in the future. |
The ad-supported MySpace Mobile site, which is separate from the subscription site, will carry a limited number of special “sponsorship” ads through the end of the year, with more ads coming next year. Palmieri says there will be fewer than a dozen ads to start.
“Accessing the Internet from your mobile phone will soon be as common as text messaging and voice calling – it’s our belief that this mobile Web experience should be ad-supported and free to users,” says John Smelzer, senior vice president and GM of Mobile for Fox Interactive Media. “With our well-established carrier partnerships and our 80 million U.S. visitors per month, Fox Interactive Media is uniquely positioned to bring the Internet to users on mobile phones.”
“The MySpace Mobile Web significantly lowers the barrier of entry for all MySpace users to access their profiles on-the-go,” says Chris DeWolfe, CEO and co-founder of MySpace. “An ad-supported MySpace offering is a major component of our mobile monetization strategy and we look forward to broadly offering this industry leading roll-out to advertisers.”
The ad-supported MySpace Mobile site allows MySpace users to send and receive messages and friend requests, comment on photos and profiles, post bulletins, update blogs, find and search for friends and view and change mood status.
Yahoo! recently acquired Actionality, a German company specializing in inserting ads into mobile games and other content, while AOL purchased the mobile advertising company Third Screen Media and Microsoft bought another advertising company, ScreenTonic. Google has started selling ads on Web pages that are viewed on phones, using its new AdSense for Mobile. Google also has told all of its AdWords advertisers that their ads could appear on search results on phones.
Cap that off with Nokia’s recent acquisition of Boston’s Enpocket, which has technology to send mobile ads via text, WAP pages or using video. Enpocket already has relationships with Sprint Nextel, Vodafone Group and India’s Bharti Airtel. Nokia has said it plans to integrate advertising with many of the services it is going to offer, including its new Ovi music and game downloading service.
Some people think the carriers still have the upper hand in mobile adverting. Among them is Roger Wood, general manager for North America for the advertising technology company Amobee Media Systems. Amobee has a carrier-centric model, with trials with operators like Orange France.
Wood thinks the carriers have the advantage in mobile advertising because they control the network and know their subscribers. He says the Internet will provide substantial advertising to mobile phones, as will the brands themselves, but don’t have the subscriber link the operator does.
| M:Metrics Provides Mobile Ad Audits |
The advertising industry may be interested in getting their ads on phones, but they also want to know that the ads are being seen by their target markets. That kind of personalized advertising is one of the biggest attractions of the mobile phone.
Mark Donovan, a vice president with the research company M:Metrics, says information about consumers’ use of mobile Websites is vital to advertisers. That’s why M:Metrics has developed technology to audit these Websites, so advertisers can place their ads more appropriately.
M:Metrics recently used its audit capabilities in research it did with the mobile advertising company AdMob and the 2,000 sites it serves. A report on the research shows that about two-thirds of the people who view mobile ads are in the desirable 18- to 34-year-old age group, Donovan says.
The auditing process, which is done by surveying visitors to those WAP sites, also provides more granular information about those visitors, he says. That includes ethnicity and sex.
The study found that sites targeting African-Americans have an audience composition of more than 50% of that ethnic group, even though the group makes up just 6.3% of mobile users. Similar findings were discovered for sites aimed at females, Hispanics and other profiles, Donovan says.
Omar Hamoui, CEO of AdMob, said in a statement that audited information means advertisers can reach their target audience with greater accuracy.
“By working with M:Metrics and leveraging our vast network audience across the site, carrier and handset level, we now enable advertisers to target their buys in ways that they have come to expect with traditional Web advertising,” Hamoui said. “Most importantly, they can reach their audience on the mobile Web with scale.”
Donovan says the M:Metrics auditing technology will be offered to other mobile advertising companies and could be valuable to aggregators and even specific WAP sites.
M:Metrics also says research it did in July shows SMS advertising can be productive. While only 17.2% of American mobile phone users have received text messaging ads, the study shows, 12% of the subscriber respond to the ads.
Text-based mobile advertising is nearly ubiquitous in Europe, where three-fourths of mobile subscribers report receiving them, M:Metrics says, although most of the ads come from companies that don’t have permission from the subscriber.
“The early days of SMS advertising are similar to the advent of e-mail, which was initially a very effective, high conversion advertising platform,” says analyst Evan Neufeld. “However, e-mail’s value decreased over time because of over messaging and spam. Hopefully, the personal nature of the mobile phone will be a barrier against marketers killing the goose that lays the golden egg by taking a similar tack.”
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