Carriers: We will control mobile advertising

This afternoon Scott Kelliher, the director of mobile marketing at Virgin Mobile USA and Chris Black, a director at AT&T Mobility, explained the nuances of mobile advertising during a panel session at Marketing the Mobile Channel, conference co-located with the CTIA Wireless I.T. & Entertainment Show. The carrier representatives came out with guns blazing:

"I think as a carrier we have always taken the approach that we add a significant portion of value to the whole [mobile marketing] process," Black said. "We are going to do whatever it takes to hold onto that value when it comes to things like mobile banking and mobile marketing."

Negotiating revenue share agreements and deciding who "owns" the billing relationship have been considerable barriers for carriers, banks and brands looking to launch those two services. Black contended that the carriers will still retain much of the power. "While the off-portal world is an interesting one, we have found out that we very much need the carrier in that space to make it grow," Black said. "Even once more mobile users are off-portal than on-portal, the carrier's still going to add a lot of value because of the user experiences they can create and the content that they can acquire."

Virgin Mobile USA's Kelliher is also very optimistic about the growth of mobile marketing and the carrier's continued place at the center of such services. Mobile marketing "is a new revenue source that does not require your customers to spend more money," Kelliher said. "For better or worse, there's no way around the fact that carriers are the bridge between advertisers and the customers." 

Kelliher also touted the success of Virgin Mobile USA's Sugar Mama service, which enables users to listen to advertisements on their handsets in exchange for calling minutes. Kelliher said the average click-through rate for online ads is about 0.3 percent, while click-through rates for Sugar Mama have been 5.5 percent. 

"We are answering to the dual-headed beast: our subscribers and our advertisers," Kelliher said. The service works so well because "the user knows exactly what they're getting" for listening to the ads, he said. "That's why they are much more engaged and much more responsive." - Brian