During the early years of any new medium, the majority of attention becomes focused on making the technology pay. 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. Most of the talk at conferences and in the media 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 reach a meeting of the minds about 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,” said 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 United States. By 2009, Visiongain expects mobile marketing and advertising in the same geographical areas to exceed $1 billion, provided certain key elements fall into place. Issues to be resolved include business models and revenue share and 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. Mobile operators and MVNOs will have to walk a fine line between maximizing the revenue potential of advertising and alienating subscribers and increasing customer churn.
San Diego-based BCS Mobile, a purveyor of mobile gay adult content, already incorporates a remedial type of advertising in the products it offers consumers. 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.”
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 said 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,” said 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. With customer permission, advertisers can collect valuable demographic and behavioral information to hone the marketing message.”
Penthouse Media Group Vice President for Business Development Jim Sullivan is counting on that. His company plans to complement its expansion in the brick-and-mortar club world with a cell-phone notification service designed to keep subscribers abreast of what feature dancers and Penthouse Pets will be appearing in which nearby clubs.
Cellular companies in the U.S. and Western Europe currently are either testing various forms of advertising with 3G services or are allowing ads to be served on their portals. A number of 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 them something of real value, and avoids the overwrought, spam-like appearance of much Web advertising.
