During the early years of any new medium, the majority of attention is focused on making the technology profitable. The most direct way to generate funds is to develop platform-appropriate content that consumers are willing to buy. The mobile space is no exception, and most of the talk these days is about how to format content so it can be delivered easily, how to charge for that content, and how to get users interested in it.
That may change this year, according to trend watchers. The increasing availability of mobile multimedia content is creating an opportunity for sophisticated forms of mobile advertising. Consumers already are accustomed to viewing ads on television and hearing them on radio, and as mobile content that resembles traditional media makes its way to mobile handsets, brands and mobile entertainment providers are beginning to see the viability of multimedia advertising sponsorships.
“3G technology enables the delivery of richer content to mobile phone users, but there is a limit to how many additional charges and subscriptions mobile phone users will accept,” says Marcia Kaplan, a Visiongain analyst and lead author of the report “Mobile Advertising and Marketing: Market Analysis and Forecasts 2006-2011.” “At some point, content will have to be sponsored or partially subsidized by advertising. We are also seeing the emergence of ad-subsidized [mobile virtual network operators], which plan to offer free airtime in exchange for targeted advertising to subscribers.”
According to the Visiongain report, in 2005 the nascent mobile advertising market garnered $255 million in Europe and the U.S. By 2009, Visiongain expects mobile marketing and advertising in the same geographical areas to exceed $1 billion, provided certain key elements fall into place, such as business models and revenue share, as well as the type, length, and frequency of ads. Consumer attitudes will play a major role, too: According to an RCB Capital Markets report published in March, only 23 percent of consumers expressed an interest in watching TV or movies on their mobile devices, and only 20 percent said they would tolerate advertising if it lowered costs.
San Diego-based BCS Mobile, a purveyor of mobile gay adult content, already incorporates a remedial type of advertising in the products it offers. In addition to streaming hardcore video to cell phones, BCS offers “glamour” gay video clips free to anyone who signs up and asks to receive them. Each free clip opens and closes with the name of the production company, the title of the video, and a Web URL, thereby encouraging users to visit the production company’s website to “see more like this.” The advertising scheme works well, according to BCS President Timm Dietschak, who says his company is investigating other roles advertising might play in both the adult and mainstream spaces.
Ian Aaron, president and chief executive officer of Waat Media Wireless Entertainment, is another proponent of mobile advertising. Waat is engaged in producing and distributing “mobisodes” – short, television-like videos and live streams for mobile devices – for brands like Vivid, Playboy, and Girls Gone Wild, and Aaron says the mobisodes just now appearing in Europe already are generating interest among potential advertisers because they offer a uniquely targeted market.
“The mobile phone is a very personal device that most people carry with them 24 hours a day,” says Visiongain’s Kaplan. “It affords advertisers an opportunity to present very targeted and time-sensitive information that is of interest to the user. That is a key advantage.”
Cellular companies in the U.S. and Western Europe currently either are testing various forms of advertising with 3G services or are allowing ads to be served on their portals. Numerous mainstream multimedia companies will launch advertising within their multimedia offerings during 2006. Although there is some skepticism about how successful the initiatives will be, adult companies eyeing the space feel certain that consumers of adult entertainment will be amenable to the practice if it’s non-intrusive, offers something of real value, and avoids the spam-like appearance of much Web advertising.
