Carriers embrace mobile ads

Mobile advertising is eking its way into the mobile content decks in the U.S., helping carriers boost their data revenues without scaring customers with high-priced data plans. Though their efforts are small so far, the impact of these initial trials could be big for the future, ultimately determining who pays for mobile content — the customer or the sponsor.

At CTIA Wireless, both Sprint, and Amp'd Mobile introduced advertising programs targeting different types of content. Sprint launched banner ads on its mobile wireless application protocol (WAP) browser and Amp'd showed off sponsorship clips for its premium video content. Both carriers said the ads will help determine the usage case and potential of future marketing efforts. In particular, they want to gauge wireless as a medium for very targeted ad placement, based on demographic information and buying/viewing patterns to serve up ads with “surgical” precision, said Bill Stone, chief operating officer of Amp'd.

“Advertisers love the idea of being able to target very specifically whom they want,” he said. “We have so much insight into who our customers are, our advertisers can target the specific customers they want.”

For now, Amp'd isn't targeting ads and is proceeding with caution. Instead of a full ad, it runs sponsorship notification for Herbal Essences hair care products for Procter & Gamble at the beginning of specific premium video clips. However, as Amp'd delves further into the market and builds a larger subscriber base, it will start to offer targeted campaigns to its customers. With that kind of power, Stone predicts, advertisers will start getting much more experimental.

Sprint is addressing the oldest of the new media ad formats, the banner ad. Using Enpocket's ad delivery platform, it's sharing a banner ad inventory with its content partners, using specifically targeted, but unobtrusive, Web ads on those partners' content portals, said Paul Reddick, Sprint vice president of product development and innovation. Sprint, which has offered mobile Web services for half a decade, wants to introduce advertising in a compelling way that won't alienate subscribers.

“There are some pitfalls we're trying to avoid,” Reddick said. “We're, for instance, not proliferating 9000 different types of banners.” Also, Sprint is trying to make them varied, Reddick said. After some ad hoc projects, this is Sprint's first large-scale ad effort, and it is timed well, he said. Not only is Sprint comfortable with its customers and its WAP services, Reddick said, but also the mobile Web is moving beyond early-adopters into the mainstream, where advertising is an accepted way to boost revenues.

Wireless carriers must learn from the experience of Internet content providers, which cluttered their sites with ads, said Ranjan Mishra, a Mercer Management Consulting analyst. Although the public doesn't seem resistant to ad-supported content — a Mercer poll at CTIA found an even split between people who would prefer ad-supported versus fee-supported video content — the mobile Web page is another story altogether, she said. Small screen sizes and slow download speeds leave the content on WAP portals limited as it is, and further clutter might be counterproductive, Mishra said.

“You might have the banner revenue there, but you may be losing the bigger battle of making the customer unwilling to go to the site,” he said.

Laura Marriott, Mobile Marketing Association executive director, said the industry is self-regulating to avoid those problems. The association has set strict guidelines for banner ad size and placement and requires that each banner or WAP ad be tailored to the individual phone (see images).

“We have formats developed for all screen sizes to ensure they don't dominate the limited real estate on the phone,” Marriott said.