Mobile advertising may be packing them in at conferences, but the industry will need more than unbounded optimism to drive positive results. Ad agencies and brands need new platforms to reach audiences and mobile companies need someone to fund expensive and fledgling data services. How will we get there from here? A recent white paper by MultiMedia Intelligence, sponsored by iHollywood Forum, provides an essential read – if you read between the lines, that is.

Put simply, the advertising and mobile worlds need each other, but there is a laundry list of problems to overcome before mobile advertising can meet expectations and offer any real deliverables. With beautiful understatement the report suggests that “while the revenue potential [for mobile advertising] is enormous, the path to the ideal advertising platform is nontrivial.”

These ‘nontrivialities’ include the all too often over-looked issue that “the process of delivering content requires that companies participating in this segment have an in-depth knowledge of the entire ecosystem.” More importantly, successful execution rests on the power of the analytics – in this case deep knowledge of the consumer base and the profiles, preferences and purchasing intent of the individual user. Mobile operators have this ace in their hand and it will interesting to see if they use this data as a bargaining chip in their bid to be a smart pipe – rather than an unimportant one.

But media companies wield brand recognition that allows them to get more mileage out of mobile – if they choose.

Fox News, for example, announced Q1 2007 that it is partnering with Third Screen Media to help it inject advertising throughout Fox’s mobile properties. Third Screen will initially insert banner advertising on Fox News’ mobile Web site.

MultiMedia Intelligence sees this as a beginning of a trend, and Fox News will likely add video advertising and other forms of advertising. Given the acquisition of Third Screen Media by AOL, it is not certain Fox News will use the Third Screen Media platform or an internally generated platform. News Corp, the parent of Fox, is aggressively pursuing the mobile advertising revenue streams. In September 2007, News Corp took he wraps off an ad-funded MySpace Mobile Web.

Does ad-funding deliver? The report leaves us to wonder. But empirical evidence from Swiss mobile operator Swisscom speaks volumes – literally.

It has conducted an ad-funded music video pilot with Ad Infuse, launching two ad-enabled streaming video channels on their Vodafone live! portal. The first was an ad-funded channel with free comedy videos, called “Nur zum Spass” and the second was an ad-sponsored channel with premium music video clips from international music artists such as Eminem, Fergie and Jay-Z, available for purchase at a reduced price, called “Musik Videos für 50 Rappen.”

Among the findings:

• 80 percent of users rated this ‘free video content in return for advertising’ experience positively

• 50 percent of users say they would not have viewed the videos if they weren’t free

• 82 percent of the users viewed the pre-roll ad

• Up to 67 percent watched the post-roll ads in their entirety, depending on the advertisement

• Ad recall rates were as high as 29 percent

• WAP banner click-through rates averaged 8 percent, driving customers to Swisscom’s premium services

• 85 percent of the music videos published on the ad-funded service logged more click-throughs than the same videos posted on a premium rate streaming service running at the same time on Swisscom’s own portal

Between the concepts introduced in the white paper and the concrete figures offer by Swisscom, the industry is building a solid model for ad-funded. The verdict, from the punters at least, seems to be thumbs up. Ad-funded content clearly whets users’ appetites, but does giving it away for free make them want to come back for more? Moving forward, the issue will certainly shift from how to deliver the message to where to draw the line.

This entry was posted on Tuesday, December 11th, 2007 at 4:37 pm and is filed under Mobile Advertising, Mobile Content, Mobile Music, Personalization. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.