Mobile advertising – Who’s got a Ticket to ride?

In a recent blog post, we wrote about how online service providers (OSPs) are taking control of user data, threatening to lessen the value of the operators’ massive subscriber registries. Most OSPs’ business models are still based on advertising, and some of them are taking the lead when it comes to transferring this model into the mobile world. AdMob has become Google’s acquisition target, and Apple has just announced iAd; a solution to enable the placement of interactive advertisement into mobile applications.

Chances are that other mobile OS vendors will implement similar support in their software and developer programs. Such development may in fact cement the position of OS and handset vendors as the prime distribution channels for mobile applications. These players are already dominant in the mobile app space, and a wider offering of free apps will lead to more users and more downloads, which in turn may attract further advertising partners looking for scale and wider consumer reach.

As a positive note for some, this trend may somewhat counter Google’s dominance in the area of conventional online advertising – but is there still a place for mobile operators when it comes to mobile advertising? It depends. Some large operators like Vodafone are competing – and partnering – with OSPs through their own mobile web propositions, but others lack the resources and/or an attractive scale to play a significant role. Partnerships between operators – such as the recently announced Wholesale Apps Community – is an alternative, but may be too slow to take off to lead to satisfactory results.

But, don’t renounce just yet, operators who want to engage into mobile advertising still have further options: By partnering with competitors or by using an aggregator, a more attractive scaling and single point of access can be offered to advertisers enabling advertisers to reach the entire subscriber base of a country with one campaign (which in theory is 100%, more than can be obtained with any other channel). Another option is to avoid the OSP competition by focusing on other media, and couple them with user data. There are advertising channels and use cases that operators control better than anyone else: SMS, MMS, voice response units, written customer communication, or indeed the retail store network. For example, operators could target such users that have outdated phones, postpaid subscribers whose contract is up for renewal, or subscribers using international roaming.

So, get out there and fight and let’s ensure a healthy competition in the mobile ad space – operators have a role to play if they want, but need to figure which strategy that is most attractive to both advertising partners and end user segments.

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