Wireless Execs: Mobile Ads Gain Ground, But Still Face Hurdles

Mobile advertising is starting to gain traction--but won't make up a significant portion of mobile content revenues for at least three more years, say wireless industry executives.

Paid content such as music downloads or data subscription services will continue to be the primary revenue sources for mobile media in the near term, according to executives on the "Weighing Mobile Models for Publishers" panel at the OMMA conference on Tuesday.

But within the last year, marketers have begun to spend noticeably more on mobile advertising, said Tom Burgess, CEO of mobile media ad network Third Screen Media. He said that the company's sales had grown 250 percent over each of the last three quarters, indicating that marketers are directing increasing amounts of their ad budgets to mobile media.

Third Screen has begun to sell $1 million mobile ad campaign packages to media buyers and marketers that may include text links, banners and click-to-call ads, which are targeted based on criteria including carrier, device type, time of day, and region. "Three and a half years ago I was getting laughed at," said Burgess of approaching media buyers about mobile ads.

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But targeting by ads by criteria such as age, gender or income is still difficult because little demographic information is available so far on mobile subscribers, he noted.

The panelists emphasized that mobile content is still in its infancy, and won't become primarily ad-supported in the next three years. Nevertheless, John Styers, the newly appointed general manager of mobile advertising at Sprint, said the carrier is gearing up for a growing ad-driven landscape.

He said Sprint is now offering marketers interactive banner ads on its mobile home page. Over the coming months, Sprint will work on developing key mobile ad metrics and targeting so as not to overwhelm subscribers with a plethora of advertising on the small screen.

"There is substantial interest and support throughout the mobile ecosystem to get this thing moving," said Styers.

Unlike the Internet, the mobile platform isn't likely to be as receptive to viral marketing campaigns, said panelists. Mike Baker, president and CEO of mobile marketer Enpocket, pointed out that text-messaging campaigns on cell phones typically require approval from carriers to keep spam under control. There are also restrictions on forwarding messages to a friend, he said.

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