Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
There is a ride in Disneyland called “Fantasy Land.” The ride consists of park guests loading into a boat and floating down a mystic river, admiring miniaturized models of scenes from fairy tales. One can see Cinderella’s castle, the houses of the three little pigs, and the cottage of Snow White. Some might view the ride as a metaphor for the mobile advertising world, as fantasies of game changing applications are imaginary, never seemingly coming true.
The cynicism is understandable. With subscribers numbering in the billions worldwide, advertisers have been salivating for years regarding the potential for serving ads to handsets. Almost everyone in the wireless industry, including yours truly, is guilty of over hype. There has never been a lack of innovative ideas; however, the devil is always in the details. The innovative mobile advertising applications never seem to become real. However, we are seeing strong signs that one of the applications has strong signs of coming to life, a mobile version of Pinocchio, the wooden doll that became a real boy.
No dispute with video on the handset
With MobiTV’s recent announcement of 4 million subscribers and MediaFLO’s roll out, one thing cannot be disputed by even the most pessimistic. Mobile video is very real. Except for the end-viewing device, mobile TV subscription services are remarkably similar to cable TV or IPTV services. With growing consumer demand for mobile entertainment, mobile TV and video subscription revenue promises to reach almost $3.5 billion worldwide in 2008. By 2012, mobile video and mobile TV will exceed $14 billion. Although the revenues are in the billions, video on a handset was something easily seen coming. Continuing the Pinocchio metaphor, it is significant, just not as surprising as making a wooden boy real.
Mobile video and TV advertising
With mobile video becoming real, mobile video advertising becomes real. Unlike many other forms of mobile advertising, the familiarity of the broadcasting advertising model makes mobile video advertising very easy for advertising buyers to understand. According to one mobile advertising executive, ad buyers used to “have trouble spelling WAP, even if you spot them the ‘W’ and the ‘A.’ However, they get TV.”
MultiMedia Intelligence believes the advertising model for mobile TV will be significant. Total mobile TV and video advertising revenue will exceed $1 billion by 2012. It is definitely significant, but not quite a fairly tale come true.
Interactive mobile advertising; Pinocchio becomes a real boy
The area in which promises seem to finally be coming true is in the mobile interactive-advertising arena. The cellphone is inherently an inferior entertainment platform when compared with other media devices like TVs. However, the cellphone is inherently superior communications platform. Leveraging this competency allows the cellphone to compete with other media devices.
One such implementation is taking the phone viewing experience down the path to interactivity and is enabling a “call to action.” Call to action is a feature that allows one to get more information or to communication with the advertiser while the advertisement is playing. For example, if you see an advertisement for the latest BMW, you would press the call-to-action button and an SMS text could be sent to your phone with the nearest dealership or a dealer send you more information.
The benefits of calls to action are two-fold. First, the user does not view the call to action as obtrusive advertising. It is viewed as a service. Many would find directions to the nearest Starbucks as a benefit if an advertisement stimulated a craving. Second, and in some cases more importantly, the CPMs go up; in fact, they go up a long way. It turns advertising from abstract marketing to trackable lead generation.
Call-to-action advertising is available in both mobile video and mobile TV offerings. The call-to-action functionality is early in development. MobiTV has been running trials in 2008 with some promising results. Other platforms such as MediaFLO have the capability built into the platform with features such as clipcasing; the functionality is just not commercially implemented.
Call-to-action advertising was virtually non-existent in 2007. By 2012, this specialty advertising market will grow to $419 million in worldwide advertising revenue, giving faith to those true believers that dreams do come true.
Questions or comments about this column? Contact Frank at [email protected] or contact RCR Wireless News at [email protected]