Mobile ad business has potential

Cellular industry has new advantage

The mobile phone could become the biggest medium for advertising since TV, but the cellular industry has a lot of work to do before that happens.

That was the consensus on a mobile advertising panel Thursday at the 3GSM mobile phone conference here, where European carriers O2 and France Telecom Group, owners of Orange, both said carriers and advertisers have to whip up new types of ads that take advantage of the personal and interactive nature of mobile.

Brands including Coca-Cola, MasterCard, BMW, Nike, Canon and Elizabeth Arden are dabbling in mobile advertising. To them, the mobile phone is a potential double bonus: 2 billion users gives them more reach than any other medium, and the phone with all its associated demographic and location information gives them the targeted marketing potential they dream of.However, “It’s not simply a case of taking existing formats and putting them on the mobile screen,” said Tanya Field, head of content development for U.K. carrier O2, which is part of Spain’s giant Telefonica.

Unlike other media, “The mobile is extremely rich in what it allows advertisers to do,” said Jean-Benoit Van Bunnen, director of search and advertising for France Telecom, which runs mobile operator Orange.

While TV-like video ads and Internet banner ads have a place on the mobile, creatives have to put them to use in unique ways while also coming up with new formats.

One of those formats calls for embedding ads inside mobile games. Field said consumers could receive games at a discount if they agree to let advertisers into the games, or for free if they permit even more advertising.

Another form of advertising taking hold is the sponsored video, which is everything from giving consumers a chance to see stylish commercials before they are generally released to more discrete vignettes featuring a brand. Coca-Cola aired a version of its Happiness Factory ad on Orange’s Orange World portal in November, well ahead of its U.S. broadcast debut on “American Idol” in January.

At 3GSM there are dozens of the ad tech specialists emerging to help implement some of the new approaches, including Paris-based Screentonic, San Francisco’s Amobee, San Mateo, Calif.-based Smaato, London’s Celltick and Tel Aviv-based Yadata.The willingness to watch free videos or play free games should help the mobile industry deploy an “opt-in” approach in which consumers agree to watch ads. Field and Van Bunnen noted it’s important not to bombard users with annoying ads they don’t want to see. “Opt-in” avoids this.

Market research firm Informa is forecasting an $11.4 billion mobile advertising market by 2011.

But before mobile advertising moves out of what O2’s Field called its “niche” role, operators will have to adopt technical standards so that ad creators can develop ads that run on different networks. Earlier this week at 3GSM, the GSM Assn. announced a new “Mobile Advertising Forum” to smooth out these differences.