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ON: Mobile Ads

gravatar
 · 
September 13, 2006
 · 
2 min read

Piggybacking on my post yesterday about the NYTimes Wap site...
The newest players in mobile advertising are familiar names: Sprint, Verizon and Cingular.Phone091206_1

The carriers, after years of resistance, are opening their mobile-phone services to advertising.

Ads on deck
Sprint Nextel this week is expected to announce that it will allow ads
on its deck -- the landing page for customers accessing the internet
from cellphones on the Sprint network. In February, Verizon Wireless
Chief Marketing Officer John Stratton said he's testing a program to
open up cell service to advertising using a two-tier model, offering
customers one service without ads and a cheaper, ad-supported service.
Cingular is considering on-deck advertising, and is likely to have some
advertising on its deck as soon as the end of the year.

The ads are hardly an example of the most innovative mobile marketing
taking place right now, but they do signal a willingness on behalf of
carriers to work with advertisers.

It follows years of resistance by carriers to open their decks to ads
for fear that customer complaints would bog down customer-service call
centers and eat away at profit margins.

OK if subsidizing content
But concerns over consumer resistance to mobile ads also appear to have
abated. Nearly half of consumers ages 18 to 35 indicated they would be
interested in mobile ads if they subsidized their "increasing appetite
for mobile data/content," said Yankee Group, which estimated U.S.
carriers generated $10.7 billion, or about 9% of revenue, from
non-voice bills.

Right now ads are available only on off-deck mobile websites,
which are often more cumbersome for users to access. According to
M:Metrics, of the 190 million mobile-phone subscribers in the U.S.,
some 166.9 million have phones capable of accessing the mobile web-but
only 49.6 million of those subscribers used the mobile web in July.

For advertisers, on-deck ads will significantly expand mobile
marketing beyond text messages and short-code promos. The ads on
carrier decks will boost eyeballs and mobile inventory, which in turn
should lower prices.

Spending to reach $150 million
Carriers are starting to
smell the money. Advertising on mobile phones totaled only $45 million
in 2005, but is expected to hit $150 million this year, according to
research company Ovum. Once the carriers allow on-deck ads, they will
get a cut of the revenue -- in contrast to off-deck sites, in which
carriers don't share ad revenue.

Other questions remain:

  1. Will carriers become media companies in their
    own right, perhaps sweetening the pie for marketers by doling out
    additional information about subscribers' locations, mobile habits or
    bill-paying habits?
  2. Will each carrier's customers be different enough
    to persuade a marketer to prefer one carrier as a marketing partner
    over another?
ON: Mobile Ads via @jpenabickley
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