MSearchGroove

Fox Interactive Media (FIM), a division of News Corporation, gives a better idea of what to expect from MySpace on mobile. The social networking platform, along with several other web properties, will be ad-funded and available to users for free. To sweeten the offer, MySpace Mobile Web and additional FIM sites will offer users a “considerable amount” of free content, tools and services that were previously available only to paid subscribers. The company counts 80 million Internet visitors per month.

John Smelzer, Senior Vice President and GM of Mobile for Fox Interactive Media, is particularly bullish on the outlook for ad-funded schemes. He said in a statement: “It’s our belief that this mobile Web experience should be ad-supported and free to users.” Chris DeWolfe, CEO and co-founder of MySpace, is likewise upbeat on the power of ad-funded to boost both mobile traffic and revenues. “An ad-supported MySpace offering is a major component of our mobile monetization strategy and we look forward to broadly offering this industry leading roll-out to advertisers.”

To this end, FIM has partnered with Millennial Media, a cross-platform mobile advertising company that covers the gamut providing features and functions aimed squarely at major brands to Decktrade, a performance-based auction service and marketplace for advertisers and publishers. (We deep-dive into the company in this exclusive podcast.)

In the tie-up with FIM, Millennial will both sell and serve mobile-based ads, a push that will include “custom sponsorship packages within MySpace and more traditional display-based ads” with other FIM properties, such as IGN, FOXSports.com, AskMen and the network of MyFOX local television sites. Millennial Media and FIM will also sell a limited number of charter sponsorships within MySpace’s new mobile site over the next months and open all advertising inventory by the end of the calendar year.

I had a pre-briefing with Paul Palmieri. Millennial Media President & CEO, to get the inside track on this milestone announcement. (The mobile site beta launches mark the first time that FIM has delivered an advertising solution to marketers looking to reach Internet users on mobile devices.) Special thanks to the Abelson Group for pinning Paul down on short notice, and thanks as well to Paul for agreeing not only to the following Q&A but also to circling back in October with some exclusive mobile advertising stats and results.

The deal is significant as a mobile advertising deal, but it’s also providing your advertisers an inroad into the social networking place and platform on mobile. Is this the most exciting part of the deal for you?

It’s exciting to have that reach (in MySpace), but other news around this announcement is the linkage with the other FIM properties and their rich targeting information. With this deal we have the opportunity to really understand the demographic profiles that exist in social networking. Bringing that audience, and those learnings, to our advertisers is key to the growth of mobile advertising and the overall mobile [content & services] market. It’s also an important vote of confidence for ad-funded and we believe FIM’s lead will inspire other companies to say ‘Yes, this is a validated way to go to market and build my business.’ Now that we’ve proven this model is the one, the focus moving forward will be on creating valuable products that enable FIM to target multiple [customer] demand sets as they look to grow this business for everyone involved.

You mention targeting and that ties in with the chief goal of delivering the right ads to the right users. How do you propose to do this?

It’s not part of the press release but we are also working closely with MySpace to enable a better understanding of the demographic profiles of MySpace users and the best ways to target them. It’s not about ad-serving; it’s about decisioning. Deciding what ad to show at which time, for example, is an area that we are expert in. Adding [factors like] age, gender and zip code into this powerful decisioning increases the ability of advertisers to execute their campaigns against the right audiences. And when we talk about mobile, we can factor other demographic elements into the equation, more than has generally been done online.

The ad-funded strategy makes sense on paper, but in practice we don’t see evidence that users will appreciate – let alone accept – advertising on their mobile phones. Is this industry celebration a bit pre-mature?

I think we’re all getting the wrong picture of the space because the surveys are asking the wrong questions. If you ask users if they want ads, they’ll say they don’t want them. Funny thing though. Consumers accept advertising in print, radio and television media without a second thought. No one asked if they would accept it; they just did. I think we have to rethink the question and make it clear what users get in return. Tell them that accepting advertising on their phones is going to essentially fund something that is useful to them and I think you’ll get your real answer. There are only thousands of mobile services, but millions of websites that they are able to access thanks to a free and ad-supported business model. If there is a barrier to uptake of mobile data it’s not user acceptance, it’s the consumer’s upper limit of what they are willing to pay for mobile content. This model solves that problem and that’s a real win for consumers – as well as all participants in the industry. .

Speaking of barriers in the industry, is inventory the problem? Put another way; is there a serious lack of it and how might this impact your deal with MySpace?

There are some issues around inventory - but not in this case. The size of inventory for MySpace in the U.S. is going to be huge. It certainly is online and that will translate to mobile. As Msearchgroove, you probably know that MySpace is already a leading mobile search term. Consumers are already looking for MySpace and wherever they may land, on the deck or off-deck, I think they are going to take to this product very quickly.

You mention mobile search, which dovetails perfectly with the debate about search and advertising. In a nutshell, search is the traffic driver and mobile advertising is the money-maker. But the slew of acquisitions exposes a new dimension to this model: traffic drivers are now in charge of mobile advertising. Will search companies control advertising in the end?

Our opinion is that display [advertising] will be a much bigger business in mobile than search will be. Search is powerful, but targeted and relevant display advertising is also compelling – particularly for those companies who are mobile-direct marketers. Display advertising allows them to deliver a richer experience and the chance to be discovered as users explore the content. In a word, display ensures that they get visibility and not just exist somewhere at the bottom of a menu or below the fold somewhere. We have to keep in mind that these are early days for mobile search and remember search on a mobile phone is complicated by a tiny screen, a tiny keypad and a number of usability shortcomings. It’s certainly a much more engaging and effective experience to be shown a display advertisement and have the consumer decide whether to act on it.

That’s a very interesting and controversial position. You are essentially saying display is the best way to get to the consumer. Mobile search is more subtle and therefore more risky because it doesn’t guarantee the advertiser will have a top-notch spot in the results. Are you looking to work with companies that offer the active-idle screen or the on-device portal to capture eyeballs and drive traffic?

Yes, display is in many ways more attractive than search. I think we’ve got an opportunity here to partner with and we will seek to partner with those companies who are delivering display media via idle-screen based plays. We’ll also look to partner with the leaders in the mobile search industry like Google, Yahoo and others.

• Posted in
• Mobile Search, Mobile Advertising

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