Is advertising the key to making mobile content pay?
That’s the question that speakers and attendees of Billboard’s Mobile Entertainment Live conference in Las Vegas were asking themselves March 31, where the hype over the mobile entertainment potential was noticeably lower than years past.
The consensus is that the revenue opportunity for mobile advertising remains low today, but it’s growing and making possible new forms of mobile distribution.
Take the mobile web. Keynoter Greg Clayman, MTV’s executive VP of digital distribution, told attendees that just two years ago MTV had no mobile websites live because there was no business model for it. But mobile advertising has allowed it to create such sites, which collectively get “tens of millions” of page views a month.
However, as Bob Gessel, VP and head of technology and network strategy from Ericsson notes, “75% of people have never accessed the mobile Internet.”
Certainly mobile Internet usage is up on more sophisticated devices like the iPhone, but that device only represents about 2% of the broader mobile market. So the focus is on applications available specifically to mobile phones. YouTube’s Taylor Cascino noted that the streaming video service had a 500% growth in mobile video streams last year, for instance.
“We know there’s an audience,” he said. “Hopefully advertisers will recognize that.”
When companies pair up the right mobile advertising campaign with the right mobile content, the results are dramatic. Pandora’s VP of advertising Cheryl Lucanegro said clickthrough rates for mobile advertising is “much higher” than that of online. Kia’s VP of marketing for North America Michael Sprague noted its budget for mobile applications and advertising doubled since last year after it launched a mobile music application on imeem.
Which is why new devices like the iPhone and other smartphones are being treated with such respect. Those phones allow for the creation of more sophisticated applications, which in turn creates not only a more premium experience for advertisers to participate with, but also drives greater usage among customers.
“The iphone has opened the door of the client asking us for mobile,” says Jamie Wells, U.S. mobile director for advertising firm Ignition Factory.
Nielsen’s Jerry Rocha filled in the details. While only 6% of all mobile users reported downloading music in the fourth quarter of last year, 19% of smartphone owners did so, while 38% of iPhone users jumped on board.
And the final panel, a focus group of teen mobile users, found that the kids will accept advertising on the mobile phone if it means they can get something they want for free, as long as it’s presented in the right way. “After all, free is free,” said one.