Naturally, the news that Web giant Google was getting in on the action in mobile by acquiring AdMob created an atmosphere of excitement and optimism at the Global Mobile Marketing Forum last week in L.A. But it was more than a mood; it was a quantifiable trend. Mike Wehrs, President & Chief Executive Officer, Mobile Marketing Association (MMA), reported that mobile marketing shows an increase of 40 percent over last year.

What’s more, mobile is a line item in more budgets. Mike gave us the example of German carmaker Volkswagen, which is “doing things exclusively with iPhone Apps independent of other media channels”.

Another sure sign that mobile marketing has arrived full-force was the announcement by Microsoft (just prior to the event) that it had decided to join the MMA. In fact, Microsoft became the organization’s inaugural Premier Member, reflecting Microsoft’s commitment to both the association and the mobile marketing industry. As Charles Johnson, General Manager, Microsoft Mobile Advertising, put it in a press statement: “As mobile advertising has grown in significance, the time is now for carriers, OEMs, publishers and advertisers to join forces to capitalize on that growth.”

REAL RESEARCH

Peter Johnson, VP Research, Mobile Marketing Association, provided us the latest findings from the Research and Metrics Committee.  A highlight: leveraging coupons and loyalty programs are winning customers. It is found to be the most successful of all the mobile marketing approaches (!).

Another surprise is spending. To date the average media spend by agencies on mobile is still only 1.8 percent of the total spend.  However, those agencies that have experienced successful mobile marketing have already moved mobile up to account for 2~3 percent of their overall spend.

In 2009 spending on mobile marketing was $1.7 billion in total. But there was a potential for $2.5 billion, if we think back to the boost in spending shown by companies successful in mobile marketing.

Success breeds success – and encourages more spending. To get there from here the industry needs more education and a sharing of best practices. To this end the MMA is working to encourage knowledge sharing worldwide and making sure best practices are better evangelized.

BRAND SUCCESS

But the real proof that mobile is at the top of the agenda comes from the major players pushing the envelope.

COCA-COLA COMPANY: Tom Daly, Group Manager, Strategy and Planning, Coca-Cola Company, revealed what it looks for in mobile agencies. It may not be easy to get into Coca-Cola, but it’s worth it. According to Tom, Coca-Cola is “working with over 400 brands in 200 countries with a minimum of $8K per brand per country, and it is growing and we are looking for new partners.” His checklist for agencies: The company looks for three things.

1) Talent and environment
2) Thought leadership
3) Account management process.

As he summed it up: “We look for best in class to take Coca-Cola to the world leaders in creative mobile marketing and transparency is key.”

AT&T INTERACTIVE: Matt Crowley, CMO, AT&T Interactive, argued local and search are the real drivers for mobile advertising. As he put it: Today the total of mobile ad spend is about 70 percent (display and SMS) compared to 30 percent search. But he expects this will change to 25 percent (display and SMS) and 70 percent search in 2013. In fact, local search is the driver.  “We have seen over 250% YOY mobile search network growth and our goal is to pre-load the YP mobile app with local search on every device.” Matt added that AT&T counts 79 million subs and 22 million on Medianet, AT&T’s mobile portal. “There is over 22 percent access of Medianet daily.”

CNN: Louis Gump, VP of Mobile, CNN, talked about the future of news on mobile. He asked the audience how many look at news on their mobile before they get out of bed in the morning and about 30 percent answered they did. No wonder mobile is at the center of their strategy. CNN has a freemium model (offering the mobile website free and a paid CNN app).

The company debated the pricing for this, but decided on the $1.99 price as a way to keep mobile moving forward as a profit center to propel initiatives across all the mobile strategies of CNN. As Louis put it: “We wanted a dual revenue stream, and at $1.99, yes, there was debate over prices from $0.99~9.99. But we chose that price as we doing this for marketing. We want mobile as a sustainable business platform.  He continued: “We need not only the one-way free route, but a way to sustainability 3.5 and 10 years down the road.” To date 34 percent of users access CNN news only on their mobile phones. This means over one-third of users are only getting their news from CNN and only via mobile. Connect the dots, and “mobile is now the channel for CNN to reach a different demographic of people.”

Interesting to note: CNN doesn’t limit its focus to the iPhone. Instead the mobile strategy is holistic and covers four platforms:

1)    Mobile website (with 11~12 million users  per month – free and ad-supported)
2)    Text messaging (breaking news alerts)
3)    Video- on-demand and streaming (to distribute clips much more widely)
4)    Apps (and here the news is the September 27th  release that has changed the way news is consumed on the iPhone)

FUTURE OF MOBILE

Charles Johnson, Head of Mobile Advertising for Microsoft led an engaging panel on the future of mobile advertising. Ken Wilner, CEO,  Zumobi, stated that that key to mobile is “engagement”. Yes, acquisition is important, but once you obtain a consumer, the on-going engagement is second to none as mobile is with the consumer all the time, everywhere. Frank Babieri, CEO,  Transpera, was particularly bullish about the outlook for video. In his view, of the users that access online video that also access mobile video, “more then 62 percent of the time they will access it from mobile.” Another data point to keep in mind (from Charles): We replace our phones every 12~18months and we’re due to make those purchases soon. Smartphones will likely be the ones we chose, attracted by all their cool features and the great mobile Internet experience. Thus, 2010 will be the year of mass-device transition, and that will accelerate our industry even further.

BANKING: Bruce Withers, Head of Mobile, Wells Fargo, shared his mobile banking vision. He should know. Wells Fargo has been nominated as one of the top mobile banking solutions in North America and part of that success is linked to their sharp focus on youth (Gen Y and Millennials) that are part of the larger group of mobile professionals that need banking services on the go. Some key stats illustrate the success of a multi-approach mobile strategy.

•    Text messaging alerts: the user averages about 19 requests per month
•    Mobile website and iPhone application: users engage in about six sessions per month.
•    Location: Wells Fargo has added unique features in their iPhone App, including an ATM finder and direct links to wellsfargo.com.

CROSS-MEDIA: Mike Carter, CEO, MyThum and Tiffany Gerhard, Sr. Manager, Marketing- Emerging Capabilities, BestBuy, had a great session on the success of cross-media marketing for a retail brand.  For me it was one of the highlights of the day – particularly if we consider that BestBuy was doing NOTHING in mobile two years ago. Now, they have holistic strategy and results that speak volumes (literally). The strategy includes mobile as part of the marketing mix, but it is also core strategy to the company’s CRM strategy. Tiffany pointed out that mobile is a key link in clinching the sale – and everything that follows. “The use case quite good for us is when many of our customers come into the store that find when a product is out of stock. They can just go to their BestBuy application and click-to-buy in one action and then have the product delivered right to their home” But it doesn’t stop there. Mobile allows the company to support the buying process with information and interaction with customers. “Everyday now is a learning process for us to get better with mobile.”

FOOD FOR THOUGHT

Throughout the event execs and speakers raised a variety of interesting points and challenges.

•    Zaw Thet, CEO, 4Info, brought our attention to the need for an industry-wide initiative to establish a mobile cookie.  Today the next best thing is the user’s telephone number or UID on the iPhone.  By using this we can recognize and build cross-media campaigns for targeting users from platform to platform.
•     Chetan Sharma, Chetan Sharma Consulting, stated we are finally seeing the growth of the networks. Now, mobile has surpassed the data card (!).
•    Michael Shim, Head of Mobile Sales, Yahoo, reported that Yahoo’s growth of 54.8 percent is greater then the average for the industry of 45.4 percent with the mobile Internet.  Yahoo is doing unique ad solutions for apps and working on a slew of cross-media campaigns (with clients such as Subway) that link the Web to mobile.

INSIDE INNOVATION

The MMF event also recognized companies and campaigns pushing the envelope and spearheading mobile adoption. The MMA received hundreds of submissions in 12 categories from companies across the globe and winners for the Fifth Annual Global Mobile Marketing Awards were selected by the MMA Awards Selection Committee, a body comprised of global industry leaders from wireless carriers, technology and content providers, agencies and industry publications.

I had the honor of sitting on the panel of judges, a privilege that gave me a first-hand look at the campaigns. The campaigns that were real eye-openers for me in terms of real ROI and creative excellence came from agencies such as: Mobile Dreams Factory (Mini Mobile Dealer), AKQA (Gap Style Mixer), F.biz (Trident Fresh) MyThum (Rogers/Live Nation live ticketing solution) and the Pizza Hut iPhone App from Pizza Hut.

My takeaway: We kicked off the MMF event asking ourselves if 2009 was the “year of mobile” – again. Maybe not. But 2010 is going to be an adventure.  With budgets coming back, mobile showing up on marketing budgets and the advance of smartphones, the stars are aligned for 2010 to (finally) be the year of mobile is 2010. With the stars aligned it’s up to the industry to deliver – with solutions that scale and turnkey cross-media strategies with mobile at their core.

Editor’s note: Matthew Snyder is CEO and Founder of ADObjects-Inc, a cross-media strategic consultancy focused on revenue-generating, customer acquisition, brand building and business development solutions for clients determined to make the most out of mobile. Clients/Partners include: Bing, CBS Radio, Canadian Music Week, Nokia and Mobility Ventures, as well as a variety of media companies and major brands. During his career at Nokia, where he held a number of positions including Device Program Manager and Global Director of Strategy in the Multimedia Group, he architected Nokia location-based services strategy and mobile search application. MSearchGroove is proud to be an associate of ADObjects, joining a vibrant team of professionals including Chetan Sharma, Founder and President of Chetan Sharma Consulting, a management consulting and strategic advisory firm, and Roman Kikta, a renowned venture capitalist, wireless pioneer, seasoned entrepreneur and author. Feel free to contact Matthew directly (matt@adostrategies.com) or follow him on Twitter (matsnyder2001).

Mobile Groove, the monthly podcast that focuses on the news and companies that matter most in mobile — is back with a great line-up of topics and the usual mix of insights and outspoken observations from co-host Inma Martinez, my über-connected and always professional partner in crime. (We missed posting on Friday, but the reason for the delay will be clear when I take the wraps off an all-new MSearchGroove, so watch this space.)

Mobilize, the conference Inma attended in September, left a lasting impression. Her SWOT analysis: a great line-up of startups and a high level of energy and VC activity in the Valley. Where does this leave Europe? Inma (also based in London) connects the dots in some recent investor reports and concludes Europe may see its best and brightest in mobile “defect.” Is the U.S. the place to be if you are a mobile entrepreneur? Listen in and let us know what you think.

Speaking of startups, Inma also outlines the highlights from Seedcamp, a program created to jumpstart the entrepreneurial community in Europe by connecting next generation developers and entrepreneurs with over 400 mentors from a top-tier network of company builders; including seed investors, serial entrepreneurs, product experts, HR and PR specialists, marketers, lawyers, recruiters, journalists and venture capitalists. One company that stood out: VouChaCha, a U.K. startup that delivers vouchers to your mobile phone. Where is the hold up in Europe and why aren’t coupons a de facto part of our daily mobile routines (as they are in the U.S.)? You tell us!

Other success stories Inma shares: Flirtomatic, iScoot and eBuddy.

CONTEXT MATTERS?

Will location-based services excite women? Well, we beg to disagree.

Listen to the lively podcast here [23:54].

What about women who are interested in bargains are willing to drive miles in pursuit of discounted designer clothes, for example. (Think of the success of outlets in the middle of nowhere?!) Will an app that tells women what’s on offer nearby fly or fail? And where are the female-focused apps anyway? Men may have their iPhone app that celebrates flatulence – but where are the apps that target women? Talk about leaving money on the table!

BLYK MEDIA & SOCIAL MEDIA

In a follow up to the last podcast Antti Öhrling, Blyk Co-Founder, joins Inma for lunch and the opportunity to explain Blyk’s real business objectives. It’s not about mobile advertising; it’s about mobile media. Inma tells us it is an ambitious model – but one that could work well for Blyk. Listen in and find out.

And we discuss the buzz around social media, giving Vodafone (and the fast-followers sure to make headlines in the next weeks/months) huge credit for Vodafone 360. Why is social media big in mobile? Inma tells us that part of the reason could be the popularity of Twitter on mobile. (She should know; when it comes to mobile London is the Twitter capital.)

We also revisit Spotify and dissect its mobile ambitions. Is it gearing up for a showdown with Apple? Listen in and let us know what you think.

RAISING OUR GOBLET

This time Inma salutes Mark Curtis, the mastermind behind Flirtomatic, a phenomenally successful freemium flirt and fun service.

Fresh from several mobile advertising events, I raise my goblet of rock to Dagmara Brylack for sharing a milestone mobile advertising case study during Mobile Marketing Forum Europe (which I analyze here). I also recognize Mark “Mr. Mobile” Wächter, for his work to launch MMA Germany. When it comes to mobile advertising, Germany is a potential powerhouse (!)  and future posts here on MSearchGroove will highlight the stats, campaigns and companies that make this market the one to watch.

Until next time – keep it fun!

PERSONAL THANKS

Our thanks to the Grant Butler Coomber team (and Billy Burnett) for their continued advice and support on how to build awareness of this podcast series and other MSearchGroove initiatives.  I fully recommend them as our PR team of choice if you want to build your brand in Europe. In the U.S. I am indebted to Jeff Fishburn (“always-on” at OnPR) and Liz Erk, whose agency, The Jaxson Group, also advises MSearchGroove. Her talent: securing major media placements and speaking engagements for client companies.

But most of all – thanks to you, our listeners. We welcome your ideas, suggestions and elevator pitches. DM us on Twitter (@mobilegroove) or email us at mobilegroove AT msearchgroove DOTcom.

Related posts:

PODCAST: Thought-Provoking Mobile Groove Series With Inma Martinez Debuts Today; Offers Inside Track On Industry Disasters, High-Flyers & What’s Highest On Investor Radars

Regular readers will recall that MSG was commissioned to conduct Mobile Advertising UK, a research project research endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA), to expertly document the state of the mobile advertising industry in the U.K. and identify growth opportunities in the emerging mobile advertising marketplace. The report – which combines valuable consumer insights gathered by ÆNEAS Strategy Consulting and Management (coordinated by my esteemed colleagues Tarik Fawzi and Atva van Zanten) and qualitative research based on 20+ interviews with operators, enablers, agencies, and brands contributed by MSG – will be formally released in July.

Pricing is GBP 2,999 ($4,866) for the report. 500 GBP discount for MMA and IAB members, and people who attended the event. For more information, click here. And while we’re at it: A huge around of applause for James, long-time MSG friend and supporter, whose Camerjam Events company successfully brought together 130+ professionals and pundits at this inaugural event sure to spread to other countries soon!

In the meantime, allow me to share some of the key findings and data points based on an online survey of 1,000+ UK mobile users. (And please follow along in the complete presentation below via SlideShare, and listen in to this audio interview (supported by the iPhone blogging app Audio Boo) via The Really Mobile Project, where I put some of the stats into perspective.)

At a glance:

• Today the mobile advertising market in the U.K. totals nearly GBP 30 million ($48 million).
• Mobile advertising accounts for only 0.16 percent of the total advertising market – which is where Internet advertising was in 1998.
• ÆNEAS Strategy forecasts that mobile advertising will see accelerated growth in four years and so account for a significant portion of advertising spending. Drivers include: A calculated growth rate of 99 percent in 2008 vs. 2007; the overall shift towards digital advertising; and increased demand for targeting, reach, and a medium that -like no other – allows advertisers to identify and track unique visitors. (For more on this unique capability and the benefits I encourage you to read my own road test of mobile analytics solutions.)
• Only 32 percent of those surveyed have a positive attitude about receiving advertising on their mobile phone. However, 64 percent said they would accept advertising is they are properly incentivized, and 70 percent said they would accept mobile advertising if they are incentivized AND in control.
• The majority of those surveyed felt 5 advertising messages per day was the limit of what they would accept.

Unsurprisingly, youth are most familiar with mobile advertising channels (specifically rich media such as MMS and in-game advertising (approaches we know from the likes of Unkasoft). What’s more a whopping 84 percent of youth surveyed has a positive attitude toward mobile advertising if incentivized. The bottom line: Acceptance of mobile advertising is right up there with TV and other more traditional media IF we can get our head around what incentives to offer and develop the mechanisms that put people in control.

No clue on the right incentives, but it’s not a given that companies need to offer cash to capture people’s attention. In the fireside chat I recorded with Rory Sutherland, Ogilvy UK Vice Chairman, we discuss the value of branded utilities and life-simplifying services. Will people accept advertising if the pay-off is less stress/more convenience? It sure looks that way!

Expert interviews:

So we know mobile advertising will be big. But what do we do in the interim, and where should we channel our investments/efforts so we can move fast when the market picks up?

No easy answers, but my interviews with companies up and down the emerging mobile advertising value chain speak volumes. Companies – in no special order – included: Orange, Vodafone, 3UK, Alcatel Lucent, Ogilvy, 4th Screen, InsideMobile, Adfortel, MMA, AdMob, IAB UK, RGA, Mobixell, Comverse, T-Mobile, 3, Sponge, Bango, and a slew of brands that wish to remain anonymous.

The bottom line: Text rules! There’s plenty of mileage left in simple SMS, and it represents a hassle-free way to start an ongoing conversation with people on their terms (remember from the findings above, people want to be in control of their advertising experiences).

There are also opportunities in location-based marketing (but not the Starbucks example, please!), mobile coupons, cross-media advertising plays with mobile at their core, and the avalanche of app stores coming online.

I can’t divulge all the results here, but I can share some thought-provoking quotes that highlight where the growth is (and isn’t), and identify the obstacles that stand in the way.

BRANDS

“If measurement was aligned with what we know from the Web or TV, it would help a lot to build confidence.”

Road ahead:

“Just between the two of us, our spend for search is by far not in the digits yet, so therefore it would be not realistic to say we would spend more on mobile advertising than for search.  That’s where we are with digital advertising, so it would totally unrealistic to say that in 2009 or 2010 we make it into the single digit share.  But it’s growing, clearly growing.”

OPERATORS

“I think there’s other opportunities such as advertising actually embedded within a widget. You could have some sort of utility widget, such as one providing weather forecasts, and there’s no reason why certain companies may not wish to have some advertising embedded within that.”

Road ahead:

“As a general principle, operators are in a particularly good position in that we can offer a variety of ways to reach the audience.  If brands want to reach a customer base, we can offer banners and messaging. We also have a fixed line web presence so we can offer traditional web advertising, in addition to magazines and billings (mailings) that we can offer. We are in a position to use mobile not only as a media property, but also as an enabler.”

AGENCIES

“I don’t think there are any real obstacles. I think it’s laziness on behalf of anyone that would suggest it’s difficult to buy. You have 5 buying points and you can hit 80 percent of the market. Call us, Yahoo, Microsoft, Orange, and AdMob. That’s it – and you’ve got the market covered. 80 percent of the inventory covered in five phone calls.”

Road ahead:

“There are a number of studies out there that show exposure to multi-channel advertising gives you exponential impact in terms of response rate and brands awareness. So the opportunity is in mobile, but also in the other channels that evolve with it.”

APPLICATIONS PROVIDERS

“The big opportunity in every country to make mobile advertising really work is to have media sales bureaus or agencies who sit in between the owners of the inventory and the advertisers. It’s in an early stage of development, and it’s also something we are going to focus on as we set up a dedicated mobile sales agency to connect the inventory to the advertising agencies.”

Road ahead:

“There are some great examples of interaction with your phone and a poster, or with your phone and TV, but that will always be a small piece of a bigger advertising picture. Core to mobile advertising is mobile messaging. Mobile is capable of delivering a message and allowing us to interact with the message. There is an interesting opportunity for advertisers to interact via messaging linked to a certain location or time, and that will develop.”

INFRASTRUCTURE COMPANIES

“Currently, we’ve got a plethora of people offering mobile advertising in the market. But when it starts to become mass-market and reaches volume, then many of those players [ad serving companies] now will not be able to translate into that volume. So, you’re going to start seeing those players just sort of die away because when mobile advertising is serious business, then you’re talking about millions of adverts and not just a few hundred thousand.”

Road ahead

“It only starts to become interesting for a carrier when the revenue they can envisage starts off at 2 percent over their overall revenue with an opportunity to grow to 10 percent. That’s the revenue that will make them sit up and listen and we’re not there yet.”

Rory Sutherland audio interview

A highlight for both me and the audience was the entertaining and educational fireside chat with Rory, whose interest in -well – us and the finer points of behavioral psychology brought much-needed balance and big-picture vision to the discussion. As he points out in this recent opinion column in New Media Age: The job at hand is to use ideas to turn human understanding into business advantage. During our interview he made it clear that mobile is a medium perfectly suited to achieve just this goal. (Listen to the audio interview here. It’s 28:40 – but time flies when you’re having fun – and this sheer genius!

A few excerpts that made us think:

YES WE CAN!: Mobile can change people’s behavior – primarily because it takes the heavy-lifting out of doing things we might not do otherwise. Case in point: Charity. A moment of “epiphany” for Rory was the huge response to SMS campaigns asking for donations, although we have assumed that youth is not a demographic to give so generously. As he put it: “If this technology can change behavior that significantly, then who cares how good it is at advertising. Advertising is about changing opinions as a half-way house to changing their behavior.” The bottom line: If you can change people’s behavior from the get-go with mobile, then it deserves a top-notch spot in our campaigns.

LIFE-SIMPLYING: Rory’s message: Don’t dismiss branded utility because it’s unglamorous. Being brandedly useful is key. (And here is an example from Rory’s Twitter feed that illustrates this approach. The IBM Scout is a branded app that helps people get the most out of the Wimbledon 2009 Championships, providing live coverage of just about everything.

COUCH POTATOES: Let’s face it – many of us are. Rory figured this out when he was watching a line of cars at a drive-in ordering fast-food. Not one got out of the car to order at the counter – even though it was empty. Connect the dots, and it’s clear we are all a bit lazy. Apply this observation on basic human behavior to mobile and you have a powerful combination indeed! We will likely reach to the medium at hand (the personal device we have with us at all times) because it’s more convenient. “Channel preference almost trumps brand preference.” Some people may prefer Pizza Hut, but if they can order from Dominos by text, then they will likely switch for this reason. The bottom line: “Modality and modal preferences seem in a weird way to trump other things.”

WHAT’S THE POINT?: We have lost sight of what mobile can do. (A point that also came out in the research I conducted.) We’re hung up on old models and enamored of new technology, and we are missing some big opportunities. Imagine using text campaigns to encourage impulse savings instead of impulse buying. Or how about a brand that simply harnesses mobile to improve listening? As Rory pointed out: “Advertising is talking and listening. That’s a perfectly reasonable form of marketing, and mobile brilliant and you can do it in real-time.”

METRICS: We have become prisoners of our own metrics. To show us how ridiculous our obsession has become, Rory compares media buyers to alcoholics. “Alcoholics buy booze on a single metric: How much alcohol do I get per pound (GBP), and this is how media buyers buy media.”

MOBILE MATTERS:  “Mobile has been the medium of first resort and dangerous to neglect it which is probably why Google has been scared. Search has been the first place you go on the Web and mobile preempts this in some respects.”

I’ll explore mobile search in a post tomorrow, which will recount some highlights of the event, let you in on the results of a new MSG white paper,  and detail my own Mobile Search Masterclass on June 30^th in London.

By way of background, Rory’s bio:

Born in Usk, Monmouthshire in 1965, Rory read Classics at Christ’s College, Cambridge, before joining Ogilvy as a Graduate Trainee in 1988. After 18 months spent as the world’s worst account handler (as a desperate remedial measure he was once booked onto a time management course, but got the date wrong) Rory became a copywriter in June 1990. He has worked on Amex, BT, Compaq, Microsoft, IBM, BUPA, easyJet, Unilever, winning a few awards along the way. He was appointed Creative Director of OgilvyOne in 1997 and ECD in 1998. In 2005 he was appointed Vice Chairman on the Ogilvy Group in the UK in recognition of his improved timekeeping.

By an amazing stroke of luck (his brother is an academic) Rory first used the Internet in 1987. Hence he had the advantage in 1994 of knowing what it was and what it might do a few years ahead of many colleagues. Most people would have combined this knowledge of marketing and technology to make a fortune; not Rory. Instead he became the first Briton to have his credit card details stolen online, thereby losing £22.45.

In his spare time, Rory collects self-aggrandizing job titles. He was President of the Direct Jury at Cannes in 2007, and was elected President of the Institute of Practitioners in Advertising in 2009. He is also the Technology Correspondent of the Spectator, the world’s oldest English language magazine. At quiet moments in the proceedings over the next few days you may like to pay a furtive visit to his blog at http://snipr.com/da9bq

Rory is married with twin daughters of 7 (Hetty and Millie) and lives in the former home of Napoleon III in Brasted in Kent. Unfortunately in the attic.

I am pleased to report this work has also sparked interest at Eyefor Travel Research, a business intelligence firm known as the “leading voice of online travel.” Andrew Merrie, research analyst and Headmaster of the School for Mobile (the firm’s initiative for educating the travel and tourism industries on opportunities in mobile), reached out to me earlier today to collaborate on the firm’s series of free reports (which are essential reads chock-full of case studies, key statistics, and best practice) focused on mobile technology and solutions.

There is a special emphasis on mobile search (which we agree is the linchpin of a range of effective strategies to deliver mobile advertising, commerce, and CRM). By way of background, the Eyefor Travel report series consists of Vol.1 Mobile Technology in  Travel: The Introduction, and  Vol 2,  Mobile Technology in Travel Report: The Detail. Vol 3  Mobile Technology in Travel Report: Consumer Insight is work in progress, but you can sign up here for an alert when it is released later in June.

A trend that stands out is the new popularity of SMS search schemes as a sure-fire way to reach a mass market. As Andrew puts it: “SMS search is a tool that 99 percent of customers know how to use. In a consumer-focused industry such as ours, it [SMS search] represents a good first step in how companies need to move forward.” Another advantage beyond intuitive usability: Proven monetization models around the delivery of related text links and advertising.

This point came through loud and clear in this week’s AdAge article, which outlines the advantages of SMS search, and takes a look at the companies (notably 4INFO, which MSG profiled here, and ChaCha) cashing in on its newfound popularity among users and advertisers.

Rita Chang, who wrote the piece, contacted me for the article, and has since arranged a follow-up call to discuss the mobile search competitive landscape. The intention is to write a comprehensive feature on the models and companies I think set the bar. I gladly support her in this work, and welcome other journalists to reach out to me for comments or just a few company contacts.

The increasing excitement around SMS search isn’t limited to the U.S. (the focus of Rita’s AdAge article). It’s also going full-steam in Asia, where Mobile Content Networks (MCN) – a provider of mobile search and revenue solutions that deliver people connections to content, not links to content, on their mobile phones – has chalked up an impressive list of operator customers for its SMS search, which emphasizes content discovery instead of answers to specific search queries.

Today marks the company’s official launch of Smart Search (aptly named) in partnership with Smart Communications, the Philippines’ leading mobile operator with 36.9 million subscribers. The MCN-powered search service (an SMS triggered search service that lets people use a shortcode to text queries for their favorite downloadable music) complements MCN’s WAP search solution for the SMART Music Store, which launched in 2008 and offers subscribers real-time access to a growing catalog of ringtones and music tracks from local content providers.

Stephen Burke, MCN SVP Sales and Marketing, who pre-briefed me on the news announcement yesterday, also kindly agreed to a spontaneous Skype chat interview to connect the dots in MCN’s evolving search strategy. I produce an excerpt of it below, and will circle back for a more in-depth discussion once MCN formally announces a key customer win later in the summer.

Q: The news is Smart Search. What else is in the pipeline?

A: We will also be adding new WAP and SMS content channels with Smart this month and next, and are seeing steady and healthy traffic growth.

Q: What can you share about traffic and usage?

A: For the Smart WAP Music search, we have seen page views and queries double in the second quarter calendar. We add [the content categories] Games in mid-June and Video in late June, which is projected to increase traffic about 3x.

Q: SMS activity?

A: SMS Search [is] reaching all the non-WAP users in the world’s most active SMS market.We will be ramping advertising in Q3. In emerging markets, the first step is to help build the Mobile Ad ecosystem, which is happening now.

Q: Do they [Smart mobile operator] use allwords [MCN's own PPC mobile content promotion program]?

A: No, not yet. The Philippines’ carrier revshare/ecosystem issues aren’t quite in place yet.

Q: And what can you report elsewhere across your partners/customers?

A: AIS in Thailand, FYI has also tripled traffic as they’ve added our Search to almost every page on the portal in their preparations to launch 3G services. These “emerging markets” are catching fire. Basically, we are seeing growth in all markets (Scandinavia, Turkey, Thailand, Philippines, Japan, etc).

Q: SMS search is certainly on the upswing.

A: In markets where WAP penetration/3G penetration is still lower (than Europe or U.S. or Japan), a transaction oriented, content and personalization oriented SMS service is an important addition. And it’s [SMS search] being specced into RFPs we are seeing elsewhere in S. Asia and Latin America.

My take: SMS search is a case of been-there-done-that? No way! It may be a rather un-sexy category of mobile search, but there is nothing unexciting about the demand for it across markets (and the increasing interest among advertisers). Indeed, comScore reports that SMS ads average a 16 percent response rate, outperforming typical 1-3 percent click-through rates for mobile display ads. While we may be enamored of the iPhone and the pivotal role this device has played in shifting mobile models (and the complete mobile business ecosystem) in the direction of mobile computing (as opposed to mobile communications), we should remember that the mobile device is about connecting us to the people and stuff (information, answers, content, and advertising – because it is content) that matters to us most. What works is what works. As Alex Meisl – Chairman of Sponge, a mobile marketing agency, and Co-Chair of the Mobile Marketing Association – pointed out in a phone interview yesterday, he is not bullish about bells and whistles in mobile. Most of his company’s campaigns harness text and messaging mechanisms people understand. Another advantage of text is the dialog it encourages between people and brands. This level of interaction can also bring a new dimension to mobile search, turning a search query into much more of a search conversation we can all understand.

Disclaimer: ChaCha has sponsored an MSG white paper; MCN has been an MSG supporter.

Is this a banner year for advertising?

No pun intended, but it’s not a laughing matter for Ari Paparo, group product manager for advertiser products for DoubleClick, a division of Google. As he pointed out during the Telecom Council of Silicon Valley event last week, the tools companies use to optimize ad dollars online–such as advertising metrics and planning and executing ad campaigns at scale and across multiple channels– don’t carry over into mobile. To make matters worse, frequency capping, the technique used to control the number of times a user sees a specific ad, is limited.

Paparo said he’s also not satisfied with creative capabilities in mobile advertising. In fact, he described the MMA’s guideline for an extra-large image banner ad as unexciting. It “won’t move dollars,” he said. And his company is still not seeing the type of ad server capability needed to streamline the publication, distribution, and data reporting of mobile advertising at large scale. But it’s not all grim. Paparo said that DoubleClick is encouraged by the availability and adoption of cookie-enabled high-end phones and the better creative delivered over these devices. And Paparo said that in the next 12-18 months, he expects publishing technologies and ad serving, as well as the ability offer even better and more-targeted ads, will all improve substantially.

While mobile advertising tools, technologies and all-important analytics have their shortcomings, there is mounting proof that mobile advertising can pay-off, particularly for the network operators who – like broadcast operators – stand to gain the most.

Kevin Kim, senior director of corporate development at SK Telecom –South Korea’s leading operator and a well-known innovator of data services– showed that Korea is, as he put it, a “test bed” of a viable and growing mobile ad market. Mobile advertising sales revenues in South Korea were $70 million in 2008, nearly double the revenues from 2007. And a breakdown of the $70 million in 2008 showed that mobile ads garnered a 5.9 percent share of the new media advertising market, not an insignificant figure. (To put all of this data in perspective, Kim reminded us that that South Korea’s advertising market is about 1/18 that of the US.)

SKT has offered mobile advertising since 2000 and has built a growing business because it understands advertiser requirements. In addition to offering attractive mobile data services, SKT has set up an in-house ad agency and advertising platform to help its partners develop and distribute ads. To round out the offer it also helps businesses offer mobile-commerce applications.

SMS- and MMS-related ads offered the greatest opportunity for SKT and its partners initially, but non-messaging ads are growing at a fast pace, increasing from only 16 percent  of ads in 2006, to 28 percent  in 2007 and reaching 37 percent in 2008. Kim said he expects non-messaging ads in the country as a whole to capture more than three-fourths of the market (76.3 percent) in 2010, when mobile advertising in South Korea is expected to exceed $200 million. These non-messaging ads will driven in part by flat-rate data plans, which 40 percent of customers will be using in 2010 (up from about 15 percent today). However, the popularity of SMS ads “will be short-lived,” he said. “It is not a long-term business model.”

Metrics may be a stumbling block for some, but Kim isn’t stymied by this. As an operator, SK Telecom can compile granular data on customer data usage, though Kim did acknowledge that the company has not been able to fully utilize this information and is therefore investing in creating tools to better facilitate this. But ultimately, he said, “the best metric is sales of products.”

To give this point extra emphasis, he offered a very positive and exciting look at mobile coupons – an area of marketing and advertising just beginning to take off outside Korea and Japan:  SKT’s numerous campaigns (conducted in partnership with major brands to attract customers to stores, often with a combination of banner ads, SMS ads, and short codes and other techniques and often integrated to point-of-sale terminals) are proving highly successful, he said, in some cases producing redemption rates above 96 percent.

Paid search was also a hot topic, and we were treated to some fascinating observations on mobile search and advertising usage from early-adopter markets such as Japan and Southeast Asia.

Paul Feng, Google senior product manager for mobile advertising, said Japan is one of Google’s best markets for mobile search. Comparing mobile and desktop search usage and patterns, Feng pointed out that Google is observing a bump in favor of mobile search in the morning during commute hours, an increase in mobile search versus a drop in desktop search during the lunch hour, and more mobile than desktop search in the evening hours.

Further, he said that Google Maps usage on mobile phones increases on weekends, while the use of that application on desktop systems goes down. While all this is favorable for mobile, he acknowledged that early morning mobile search was not as meaningful as his company had hoped. “Commuting is not as big a factor as we expected,” he said. His message for advertisers: Consider mobile and desktop search as complementary to one another and when targeting your ads, keep in mind daily traffic trends.

But could it be that morning mobile search is a significant trend that doesn’t play in favor of Google mobile search?

Phyllis Reuther, CTO of Mobile Content Networks (MCN)–a company that began by providing a platform for federated mobile search and has since extended its reach to providing a combination PPC content promotion and vertical paid search program – stated that MCN is observing a significantly higher jump (than Google) in search traffic in the early morning, around 7:00 to 9:00 a.m., in the company’s Japan and Southeast Asia markets (her data for the two markets is combined). She said the early morning jump on MCN is similar to the lunch-hour peak. Usage begins picking up again around 5:00 p.m.

Reuther attributed the better early morning traffic to MCN’s ability to present search results according to vertical channels, such as music, games and comics, direct from the content provider (as opposed to a link to the content delivered by other mobile search services). In her view, the early morning users are in the under-30 age group and highly motivated to find the latest ringtones and other products before beginning their daily work and school routines.

Another view on the best times of day to advertise came from Cirius Technologies, a Tokyo-based company whose AdLocal service (available in Tokyo) displays local ads to users based on their current location. A Tokyo case study showed some interesting differences in the number of ad impressions delivered during specific hours of the day. In short, ad impressions go up beginning at 7:00 a.m., at lunchtime, and beginning again at 4:00 p.m.  Cirius also delivers substantially more local ads during the weekends than on other days of the week.

For sure, these companies’ observations underscore the extent to which the type and personalization of service impact take-up of search and advertising services and the degree to which “know your customer” must really be understood.

While context and advertising are intertwined, communications – in the form of mobile email–also offers an excellent vehicle for delivering a marketing message.

Funambol, a company that offers a cross-platform, ad-funded white-label push email solution and synchronization technology for mainstream mobile phones, used the Telecom Council event to release findings from a recent survey of 600 users.  (The company began offering its ad-funded email services in October to Nokia 60 willing handset users. The service offers email micro-banner ads supplied by one of its partners, Smaato.)

Hal Steger, vice president of marketing at Funambol, said the company surveyed users after the first month of service. It found that users viewed an average of about 500 mobile ads each, clicking on about 1.5 percent of those ads. The company calculates that on the basis of CPM and CPC, the service generated about $10 per user per month.

Most were generally happy with the service, he said. About two-thirds (63 percent) recalled seeing the micro banner ads. Nearly three-quarters (74 percent) said the adds did not interfere with their ability to access email and 85 percent said that ads did not affect usability of the email client. About 21 percent said they had “clicked” on ads to visit mobile sites. And 84 percent said they would recommend the service to others.

Funambol users also said they’d be willing to pay about $6/month, inclusive of data fees, for an ad-funded mobile email service in order to help subsidize the cost of mobile email. Steger believes the service is ideal for mobile phone customers who want the convenience of push-based email but who may not be able to afford the types of devices or data plans associated with the BlackBerry and similar devices.

***

Peggy Anne adds: The market opportunity for ad-funded email was also the subject of a recent white paper I wrote on behalf of Funambol, aptly titled Free For All: The Untapped Opportunity For Mass Market Mobile Email. In it I present some intriguing evidence that an ad-funded or ad-subsidized go-to-market model is the only approach that will drive service adoption among cost-conscious mass market users. Put simply, an ad-funded business model is the only approach that gives people the service they want at minimal or no cost, while allowing mobile operators and service providers to generate significant revenue. You can download the white paper or listen in to the podcast Hal Steger recorded with me here.

Download the whitepaper here.

In fact, Michael Becker, EVP of iLoop Mobile and editor of the MMA International Journal of Mobile Marketing, has asked me to write an article based on my findings. I am honored to be a contributor to this high calibre publication and very pleased to report that a Vol. 2 white paper is also in the pipeline. This one (slated to be released about Mobile World Congress) will document mobile advertising campaigns I will run in three mobile social networks (which I will choose at random).

A special thanks to my esteemed colleague Maria Sanchez, a multi-talent who just today designed this wonderful holiday edition white paper cover. Maria is once again on board to help develop the campaign and document the results on the official Mobislim blog. (Regular readers will recall I chose to set up the campaigns covered in Vol.1 using Mobislim, a small-scale mobile site created by Bango, and post the raw data at Maria’s blog.)

Maria’s blog is always a good read – but there’s an extra-special reason to visit the site over the holidays – and bring your best content/ideas with you! Mobislim is collecting content for future campaigns, so please feel free to send your ideas/images/jokes/recipes directly to Maria at maria@bango.com. Bango will host the content (promoting content and running campaigns on your behalf free of charge) and track the results using Bango Analytics, allowing content contributors a chance to see the results. In the spirit of the season, Bango will donate all micro-payments it collects by selling content on the Mobislim site to the charity, Save the Children. Bango will also match the money it collects.

It’s good fun for a good cause, and I encourage you to do your part and get involved.

Warm wishes for a wonderful holiday season and a successful 2009!

Disclaimer: Bango is an MSG supporter. Maria Sanchez is a blogger and Bango marketing manager.

The valuable primer walks us through the opportunities and challenges for mobile operators, marketers and portals/publishers. The document takes a balanced view, reminding mobile operators that they are “ideally positioned to provide their customers with search tools” and outlining the options they can chose from to offer mobile search services. However, I miss a discussion of the pivotal importance of brand (for mobile operators) and reasons why mobile operators should employ all mobile search tools/services at their disposal – as long as they brand the most valuable piece of real estate: The mobile search results page. (I believe this control is a critical component of an effective mobile search strategy, a topic I address in my analysis of what’s really at stake in the Verizon-Google deal in another post later today.)

The section of the white paper on mobile search business cases is particularly valuable. A case study from JumpTap, for example, tells us how intelligent search increased ROI for Sega Mobile. In the first month of the campaign (no details on where/when etc…), Sega reported a 9 percent CTR, and 7 percent of these clicks resulted in a sale. The bottom line: Sega tallied up its sales and divided that by the total amount spent on buying keywords to calculate a 320 percent ROI. After re-running the campaign with new keywords, Sega saw a 530 percent ROI in the second month and 11 percent of clicks resulted in a sale. Not so much stellar figures – but a confirmation that success in mobile  should be measured in quality and quantity.

The case study from Medio Systems stresses the importance of keyword advertising, and illustrates how the right choices can generate high-quality leads and high conversion.

By way of background, 4INFO, a mobile search and advertising company that operates a mobile alert service delivering up-to-date information on sports, news, movies, etc… purchased advertising on Medio’s MobileNow search network targeting keywords and keyword categories. The outcome: “Initial results were extremely good; a 29 percent CTR and a 5 percent conversion rate. Simple but direct creatives such as NBA Score Alerts and NHL Live Updates compelled 29 percent of users to click on the ad, with 5 percent of these converting to subscribers.” 4INFO continues to advertise with Medio MobileNow.

My take: A helpful document for beginners – but not a roadmap. A bit thin on methodology. Nonetheless, it is a welcome primer and precisely what we need to get everyone on the same page and move this industry forward. You can download the white paper here.

Disclaimer: JumpTap is an MSG supporter.