Nightmare on Madison Avenue : As wireless Web use surges, advertising fears mount

The Internet is rapidly evolving from a desktop experience into a multi-platform phenomenon available on the go and around the world. Carriers, publishers and marketing firms are just hoping advertising doesn’t get lost in translation.
The wireless Web remains a nightmarish territory, fraught with peril for users brave enough to stroll away from carrier decks. But recent figures from Telephia and comScore indicate that the mobile Web audience in the United States is already nearly one-fifth the size of PC-based surfers, with 30 million consumers using a mobile device to access the Internet in January. What’s more, nearly half of those mobile surfers are 34 years old or younger, and 22% are under the age of 25, indicating the wireless Web is soon going to become an information superhighway loaded with traffic.
Growing pains
The increasing usage is expected to generate massive amounts of money: advertising in the United States is expected to grow from $221 million last year to $4.7 billion by 2011, according to eMarketer, and the global market will reach $11.3 billion in the next five years.
Investors are responding by pouring money into wireless advertising. Time Warner’s AOL Internet division picked up Third Screen Media last month for a rumored $80 million, and Buongiorno S.p.A. recently expanded its mobile marketing business with the $5.4 million acquisition of Flyxt.
Meanwhile, the online advertising space has moved from white-hot to flat-out silly. Microsoft Corp. is planning to shell out a staggering $6 billion for aQuantive, one of the last independent players in a rapidly consolidating market, and Google Inc. last month agreed to buy DoubleClick for a cool $3.1 billion.
But if Internet marketing is just beginning to mature, mobile advertising is still in utero. And, as the team at Greenlight Wireless could tell you, it’s experiencing growing pains.
One of the first players in the mobile browsing field, Greenlight came to market three years ago with Skweezer, a service that automatically formats Internet content to deliver a stripped-down version for mobile phones. The technology often stripped advertisements, though, infuriating at least one publisher who claimed the company was generating ad revenues off the publishers’ content.
“At that time, Skweezer took out all JavaScript. It looked like we were stripping (publishers’) ads and putting in our own,” said Greenlight President Mark Sieve. “It was a very stressful time for us in 2004. We got slammed for this.”
Transcoding truce
Greenlight retooled the technology as well as its business model. The company now generates revenue by offering a white-label mobile browser to carriers and search service providers, and is developing a version of Skweezer that can determine what type of device is being used and strip only the ads that can’t be delivered to each specific handset.
Google Inc. experienced similar turbulence last year with its transcoding technology. The offering drew the wrath of Dave Harper, founder of the mobile Internet services site Wireless Ink, who in an open letter claimed Google’s service was actually “crippling sites, not adapting pages.”
Google responded to Harper and other critics by allowing publishers to specifically identify sites that are either mobile-specific or have detection technology that redirects wireless users to mobile-optimized versions of Web pages.
But while the effort seems to have assuaged some concerns regarding Google’s offering, other transcoding service providers continue to draw fire.
Russell Beattie, a former Yahoo Inc. employee, got scolded in the blogosphere following the launch of Mowser, the flagship offering from his new startup. Mowser integrates with AdMob Inc. to place ads on Web pages that are accessed by wireless surfers using Mowser as a transcoder. But critics mistakenly thought the service took entire Web pages, stripping existing ads and placing new marketing messages from AdMob advertisers, Beattie claimed. Instead of placing ads on full pages, he explained, AdMob-powered messages are placed only at the top of directories and summary pages.
“There is obviously a fine line (in delivering mobile ads), and I got nailed for it coming out of the gate,” said Beattie. “I have a directory of the 2,000 most popular news feeds, and on those we put ads at the very top. Those news feeds are just summaries, just 500-character snippets. There are no links, no images, but basically a summary of the first 500 characters of that feed.
“I used to be a blogger; I know where their line sort of is. I’m not providing their content without their permission and putting ads on it, I’m putting up a snippet and driving traffic to their site.”
Mowser, like Google and most other transcoding services, doesn’t transcode sites that have been earmarked by publishers as mobile-friendly. And a quick trip through the wireless Web illustrates how necessary such services are: many popular Internet sites remain remarkably unworkable on feature phones, delivering illegible content and sometimes causing phones to reboot due to overwhelming amounts of data. Content providers looking to reach as many consumers as possible and cash in on mobile advertising must provide a decent wireless experience or risk losing revenue to developers who will mobilize their content for them-and deliver ads as they do so.
“The general fact is that people want to see MySpace, they don’t want to see a mobilized version of MySpace,” Beattie opined. “If MySpace doesn’t come around and make a decent version for mobile users, people are going to find another way.”