Santa Monica, CA—Last night I attended an opening event at Digital Hollywood, namely the party celebrating nominees for the upcoming Mobile Excellence Awards. At the Loew’s Hotel on the beach, guests were treated to a spectacular sunset, a view of the neon-lit Ferris Wheel on the Santa Monica pier and, of course, drinks and hors d’oeuvres. Enthusiasm is high for the actual Mobile Excellence Awards, coming up on December 8th.
Today, I attended a panel on Mobile Commerce & Content, moderated by Steve Bradbury, GoTV vp of content strategy and business affairs and featuring panelists Cheng Wu, Azuki co-founder/chair; Brian K. Johnson, senior vp, Americas and Asia Pacific for mBlox; Larry Berkin, vp of ecosystem and corporate business development for ACCESS Systems Americas; Virgin Mobile USA director of brand development & partnerships Ron Faris and AirPlay Network chair/CEO Morgan Guenther.
Sorry to say I missed the first part of the panel but came in at a perfect moment: when the discussion turned to advertising. Moderator Bradbury asked panelists what advertising model will work in the next 6 to 18 months. “Now it’s the original model of TV: we’ll give you content to get you from one set of ads to the next,” he said.
Guenther agreed with the “TV model” assessment and pointed out that his company’s model was focused on the live event. “When there’s a pause in the action, you look at the mobile phone and match it up with what’s happening in movie theatre or TV screen,” he said. “It’s all abut pacing and what the customer is anticipating.”
Virgin Mobile USA’s Faris admitted that his company doesn’t have the scale, but instead has a niche focused on youth. “Reach and frequency are tenets of advertising, but to bring relevance we’ve had to bring depth of experience,” he said. “We’ve looked at different ways of advertising. When we launched Sugar Mama, a model where you watch content in exchange for free minutes, we didn’t thave the scale to be able to compete. We were up against Google, AOL and so on. We tried to bring in WAP banners and text blasts to bring up the numbers. They were great for reach, but for depth of engagement, which is what we’re using, we were reincarnating things that annoyed us on the web. The WAP banner is nothing more than a banner ad. Text blasts are nothing more than spam. Geo-targeting is great but why do I care? If I get a text blast for Nyquil and don’t have a cold, why should I care? From our perspective, you have to understand what’s relevant and create a deep engagement. I don’t want to keep going in this direction – we have to move into a sponsorship model.”
Berkin pointed out that everyone is in the early stages of mobile advertising. “I come from the download pay- for-application model. It’s a scale business.” He also revealed that ACCESS Systems Americas has created a widget platform that’s ad supported that will roll out on smart phones across the world.
Johnson noted that the text message ad-supported model has taken off. “We’re watching that carefully,” he said. “We see a big increase in free-mium, where you get something for free but maybe you’ll pay something more if you like it. Micro-payments are our biggest growing segment, for example to pay 99 cents to send someone virtual flowers. A mixture of micro payment and ads will pay for content.”
Azuki’s Cheng said that “the mobile ad ecosystem is completely fragmented and totally isolated from advertising.” “Mobile is different from desktop,” he said. “You can’t put 30-second ad for 30-seconds of content. Advertisers have an inventory of 30-second spots, so their resources aren’t fitting the mobile ecosystem.”
One panelist noted that “before we see a truly ad-funded content model, I’d like to see a flourishing one online. “We’re closer to having that scale in the online context, for music in particular,” he said. “There have been attempts for fully ad-funded models but the numbers don’t work. Content costs are steep, and we’re a ways off until we see truly ad-funded mobile content.”
The last word came from Bradbury who spoke about metrics. “Metrics in the online world stink. The numbers are inconcistent. Metrics have to be much more standardized and effective. The same thing in the mobile space, so you can go to a media buyer used to seeing things in a certain way and give them numbers they understand in order to justify putting money into a mobile buy. Then you’ve got a viable campaign. But, for now, metrics are still a big issue.”