<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

The Mid-Year Mark
Thomas Burgess
CEO, Third Screen Media

With six months of 2006 behind us, it’s a perfect time to provide a mid-year status report on the state of the mobile advertising industry. A quick view of the landscape reveals that momentum is building.  From increasing advertiser demand to a new wave of rich mobile content, the industry is abuzz with activity.  Partnerships and possibilities—including innovative content delivery methods— abound, while each integral player of the mobile advertising ecosystem continues to solidify its position, signaling a move toward a synergy we only imagined a year ago.

Let’s take a moment to see how far we’ve come, while examining each leading player in the industry, defining their position in the market, and determining where they’ll go as 2006 rolls along.

An advertising society

Content.  If one idea has encouraged the growth of mobile advertising, it’s that consumers are looking to find much of what they value on their computer on the go, via their mobile device.  Over the past five years, wireless data revenues have doubled year-over-year, signaling the mobile subscriber’s appetite for news, sports, shopping, entertainment and games on their wireless device.

Traditionally, in the quest for content, the consumer has always accepted advertising as a means to obtain information.  Television and radio have customarily delivered their programming to consumers through the subsidies of advertising.  Online content providers learned that banner ads and innovative advertising techniques were an effective model for bringing their offline content to the Internet and providing it free of charge.  And now the mobile platform has seen a glimpse of how things could be.  Consumers are ready to embrace advertising on the mobile handset if it means that the content they seek will be made available, cheaper.

Eco-player: The Agency

In 2006, we’ve already seen advertising campaigns that have taken advantage of mobile content proliferation, bringing tailored messaging to targeted audiences.  When we look at our first of three major players in the ecosystem—the advertising agencies—already they’re reporting success in initial mobile ad trials.  The folks on Madison Ave.—and the brands they represent—see mobile as a strong engagement channel and proof lies in the commitment.  Budgets for mobile advertising over the last year have gone from 10’s of thousands of dollars to more than $100,000 per campaign.

Eco-player: The Publisher

For each agency placing its brands on the mobile platform, there is no lack of major content providers—the second element of the mobile advertising ecosystem—taking to the mobile platform.  Existing Web publishers such as USA TODAY, Weather.com, CBS Sportsline and ESPN are actively extending their properties into the new channel.  New publishers have also come onto the scene, creating a name for themselves in an arena where competition is still low.  Collectively, mobile publishers—simultaneously executing both on and off deck—are seeking to increase their inventory and have placed a call for advertisers and carriers to join in the collaboration.  While publishers continue to deliver advertising to the consumer off deck, on-deck advertising remains an elusive reality.

Eco-player: The Carrier

The carriers have heard the call in 2006 and are actively—albeit, cautiously—engaging in on-deck trials.  Campaigns featuring mobile Web and video aspects have already made their way to the consumer’s mobile device.  The carriers are a crucial element in the ecosystem and much of the pace of mobile advertising depends on their participation.  With that said, the major carriers are currently examining possible pricing models and pricing points, all the while seeking to preserve the consumer experience at all costs.  With their recent participation in on-deck advertising trials, the signs are good. When carriers up this precious real estate for large-scale campaigns, we’ll soon see mobile advertising inventory levels skyrocket.

Eco-player: The Technology

Somewhere between the growing number of advertising agencies, content providers and carriers joining the mobile advertising mix, the technology providers are making sure that it all works…seamlessly.  We saw earlier in 2006 the release of mobile advertising technologies that brought the standards of advertising buying and selling to the mobile platform.  These technologies have proved instrumental in delivering advertising to the consumer through mobile media channels such as Web and video, with downloadable applications and MMS campaigns on the near horizon.

Where to now?

The response to advertising on the “third screen” has been overwhelming.  Major brands from the automotive, hospitality, technology and financial industries—to name a few—have taken to mobile to promote their product, while publishers continue to launch new ad-supported content, daily.

While many are still testing the waters, and some mobile technology has yet to become a part of continual campaigns (MMS and downloadable applications), the rapidly emerging mobile advertising market has opened its doors.  As we move steadily into the second half of 2006, we’ll soon find ourselves looking back on a year that proved instrumental for the industry, one in which mobile advertising became the reality we once dreamed it to be.