Carriers cautious about mobile advertising

By Jason Ankeny Given the inextricable relationship between hype and advertising, it is only fitting that mobile advertising is itself the subject of so much ballyhoo. From ad-supported video content to in-game marketing to idle-screen pitches, advertising opportunities are sprouting in most every segment of the mobile data ecosystem, and everyone—from new-media behemoths such as Google, Yahoo and MSN to old-school broadcast and print giants—wants a piece of the action. Despite the hype, mobile advertising is still in its infancy, generating roughly $871 million in 2006, according to Informa Telecoms & Media. For that figure to grow commensurate with more established advertising platforms, carriers must reconcile their concern for consumer privacy with their interest in the bottom line. Carriers are key “We’re fueled by an understanding that you cannot make or create an advertising inventory of immense value without carrier involvement,” says Roger Wood, senior vice president and general manager, Americas, for messaging infrastructure technologies provider Amobee Media Systems. “The real gold lies in getting the carriers involved, because of the level of precision you can bring into the advertising process.” Carriers control not only the distribution channels but also the subscriber data that promises to distinguish mobile advertising from previous marketing platforms. Consumer profiles encompassing even basic subscriber data such as age and location promise to enable laser-targeted campaigns designed for maximum relevancy—the dilemma facing carriers is how much customer information they want to hand over, regardless of its potential value. “Operators are being appropriately cautious with the speed they enter mobile advertising,” says Jason Spero, vice president of marketing with mobile advertising network provider Abmob. “They need to be careful—if they start pushing things at the user, they could alienate their audience. That’s why the work being done to standardize ads is so important. Operators understand they hold valuable information—they don’t necessarily have to serve and sell ads, but the ability to expose targeting information uniquely belongs to them.” The carrier thought process is starting to turn in advertising’s favor, however. “Carriers see they need to be central,” Wood says. “While their brand is the most significantly affected in terms of the relationship with the consumer, they understand they cannot ignore this much longer—advertising is happening, and their brand is in the middle whether they like it or not. Carriers are beginning to understand the time is now to assert themselves as media entities—part of being a media company, and having a deck and content, is the ability to harness ad revenue.” Brands waiting in the wings When carriers are ready to fully commit to mobile advertising, there will be no shortage of suitors ready to capitalize on the opportunity. Multinational brands including Coca-Cola, Intel and Adidas are already advertising on mobile, and countless others are waiting in the wings. “This year has brought a dramatic increase in the amount of advertising supply in the market—in general, supply outstrips demand, but we’re seeing a fair amount of action,” says Jeff Janer, chief marketing officer for mobile advertising software and services provider Third Screen Media, which last month was acquired by AOL. “Fortune 500 companies are now beginning to build out their mobile presences. In essence, it’s much like the way the Internet built out.” If nothing else, the holding pattern enables mobile advertising service providers a chance to determine which types of ads are best suited to the wireless platform. While click-to-video ads and in-game sponsorships are promising, for now the industry is sticking to the basics—i.e., text and graphical ads as well as direct response messaging campaigns, like sweepstakes and coupons. But for all the hiccups, the overwhelming consensus is that mobile advertising is merely a question of ‘when,’ not ‘if.’ “Last year, we had a lot of bigger media players come in—this is the year where you’ll see the type of content that defines mobile advertising, and a lot of that will come from the social media space,” says Heidi Lehmann, Third Screen Media’s vice president of content acquisition and strategy. “You have the phone as an interactive device—now we’re starting to intertwine that with data and create targeted ads. Advertisers are waiting to see how to get even closer to the user and their activities, and that’s all tied to social media. We’re also seeing a lot of cross-media content buys. A mobile advertising campaign needs reach, or else it’s just a sponsorship.” Leaders in the mobile advertising space will speak at the “Mobile Advertising—Exploring the Possibilities” panel on Friday at 1:45 p.m.