Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Patrick Maurer is no techie. “I can barely work my toaster,” says the lanky 29-year-old sales rep with the self-described “tennis player” hairstyle. But Patrick may represent the most promising aspect of mobile marketing and mobile video advertising. While checking his mobile Yahoo account, Patrick watched a video from Jaguar that eventually led to a dealer test-drive. “I hadn’t really looked at the Jag before that,” he said. The opportunity for brands to tell their story with sight, sound and motion has agencies and advertisers eager to experiment with mobile video advertising. This nascent sector probably has the necessary technology to grow. What is lacking now are clearly defined business processes.
Walk into any Sprint, Verizon or AT&T store and most of the phones will have video capability. According to NPD, 60% of multimedia handsets sold to U.S. consumers in the first quarter have video functionality. Although some consumers are watching paid subscription services like MediaFLO, MobiTV, Sprint TV and Vcast, comScore M:Metrics notes that three times as many – over 15 million people – watched video clips forwarded by friends and family. The proportion is similar in Europe.
Consumers are definitely interested in premium video content; they just don’t want to pay for it. The challenge is to identify what type of ad unit can be used to subsidize premium content. In July, Dynamic Logic announced the results of a study that seems to favor the the pre-roll. Nearly nine in ten (88%) of mobile phone users on 02 Active, particularly males aged 18-24, said they are happy to receive pre-roll mobile ads in return for high quality, free content. Further, 59% said the mobile ads made them more interested in the advertised brand and 62% said it gave a good impression of the brands being advertised.
Potentially immature
Not everyone agrees. John Burbank, chief marketing officer at Nielsen and an alumnus of Procter & Gamble and AT&T, commented at the IAB Mobile Leadership Forum, “I don’t think anyone is about to buy pre-roll on mobile video. It is still too immature.” Elgin Kim, head of Western sales at Nokia Interactive Advertising, notes that, “Unless it is a highly emotional category like auto or film, pre-rolls don’t work.” The carriers themselves have other priorities. Jordan Berman, executive director for media innovation and mobile advertising at AT&T, noted at the IAB Mobile Forum that “our focus is very much on launching our MEdia Net banner ad business in 4Q and so there isn’t much activity in the video area.”
MobiTV favors the creation of branded channels and interactive response components. For example, unique branded channels for Navy and Toyota include click-to-WAP call-to-actions while Schwab encourages click-to-SMS. Jack Hallahan, VP of advertising and brand partnerships at MobiTV, believes “the handset is an extraordinary tool for direct response”.
Hoping to combine aspects of branding and direct response is a variety of technology enablers. MyWaves, for example, claims to have 5.5 million unique monthly visitors to its free, ad-supported mobile video service for premium content like MTV and CBS News. In addition, they launched an ad platform in the first quarter. According to CEO Rajeev Raman, “Advertising is moving towards the 15-second spot, whether on TV, online or mobile. We see zero drop-off when the length of the unit is extended from 10 to 15 seconds.” Versaly Entertainment is a smaller free, premium video network that is available on Sprint.
Santa Monica based Transpera enables content owners like Associated Press and CBS News to stitch targeted pre-roll and overlay ads on top of their mobile video content. Viewers might see multiple ad impressions, each 10 seconds or less, during the average 7.5-minute session on AP’s Mobile News Network. Frank Barbieri, CEO of Transpera, is providing publishers with “a similar experience to what they are used to online. That means impression-based CPMs, click-to-call and other direct response media, just like online media.”
Nexage builds click-to-video capabilities with interactive components into mobile Web sites for ad agencies. Dev Gandhi, CEO of Nexage, believes it is about “more than the video. Brands can incorporate aspects like ratings and comments for interactive feedback. It has to be a more comprehensive solution than just video. Having video with pictures, chat, groups, profile and interactivity/community aspects is exciting to brands.”
These technology enablers will have to align with strong consumer brands that share their commitment to mobile video. One such brand is ESPN. Oke Okaro, VP of mobile and international at ESPN, is “very bullish on mobile video advertising. We see the mobile platform as a natural extension of television. There are so many creative things we can do but the problem today is that too many people are approaching ad-sales in mobile as if it is the same thing as the Web. It isn’t.” The sector will remain nascent until the emergence of larger video audiences that stimulate more interest from ad agencies who finally request more RFPs.
What is certain is the interest from consumers, brands and agencies. Land Rover, Ford, Paramount, Sony, Dell – a variety of respected brands that have implemented targeted mobile video ad campaigns. Ad Infuse, the mobile advertising network, hosted senior executives from agencies and brands in LA and New York and found that mobile video was in the top portion of each city’s key interest areas. While the risk in a nascent sector is significant, the innovators in mobile video advertising can help define an entirely new medium.
Contact Levi at levi.shapiro@gmail.com or contact RCR Wireless News at rcrwebhelp@crain.com.
