Editor’s Note: Welcome to Reality Check, a feature for RCR Wireless News’ new weekly e-mail service, Mobile Content and Culture. We’ve gathered a group of visionaries and veterans in the mobile content industry to give their insights into the marketplace. In the coming weeks look for columns from Laura Marriott of the Mobile Marketing Association, Mark Desautels of CTIA and more.
The potential of ad-funded mobile entertainment (AFME) has been a hotly discussed topic for the past two years, and the Mobile Entertainment Forum (MEF) has been leading the way. A 2006 MEF member survey highlighted the industry’s enthusiasm for identifying ad-funded business models that would support the uptake of mobile entertainment. In this survey, over 80% of executives felt that advertising was a growth opportunity for the industry and ad-funded mobile entertainment was seen as especially good news for content providers (including both traditional media owners and mobile content providers), whom the respondents expected to claim the largest share (42%) of revenues. Operators were expected to receive 27%, according to the respondents.
Since releasing the results of the 2006 survey, MEF has worked to ensure that ad-funded mobile entertainment services have the potential to redefine the way customers engage with and consume mobile content. It is clear that the unique strengths of mobile to deliver targeted, location-based and real-time content has yet to be taken advantage of by the mobile industry.
To explore the concept of AFME, defined by MEF as “revenue generated through mobile advertising to subsidize or fully fund the cost of existing mobile entertainment to the consumer,” MEF is working on a series of regional studies that take a very realistic approach to sizing each market and demystifying the hype and confusion surrounding AFME.
Early this year, MEF took a fresh look at the impact of AFME on the on-portal mobile entertainment market in the United Kingdom. The report contained unique statistics outlining mobile entertainment forecasts with service breakdowns. It defined and contextualized AFME and set out how AFME, in the context of mobile games and video in particular, is set to generate revenues of $286 million by 2012.
Results of the report highlighted that there were approximately 3 billion mobile subscribers around the world and being able to provide them with content for free or at a subsidized cost is certain to drive up mobile content consumption and provide users with targeted, personalized advertising that is meaningful to them. By the end of 2008, MEF believes that AFME will have generated revenue for the UK mobile games market of over $1.2 million. By 2012, AFME will be contributing $81 million to the mobile games industry in the United Kingdom.
Reports in three other regions are due in the coming weeks. MEF is publishing its report on the potential of AFME in France at MEM in Cannes (May 8-9), in the US at MEFCON in Los Angeles (May 28-29) and in India at Communicasia (June 17-20). This is just the beginning. Beyond developing metrics and measurement, MEF is taking a lead in educating the industry by publishing both a lexicon and a guide that defines different types of ad-funded content, examines how services can best be ad-funded and explores what the business models will look like.
AFME has certainly taken quite a while to get this far, and there is still much work that needs to be done. With these results and ongoing research, we are confident that the industry can reach a point where the mobile device becomes the primary method in delivering news, information and entertainment, all supported by targeted and meaningful advertising.
You may contact Suhail directly at suhail@m-e-f.org. You may contact RCR Wireless News at rcrwebhelp@crain.com.
