Mobile advertising is on the move

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Ty Wang, senior director of product marketing for service delivery solutions at Oracle, posted an entry on the Open Communication Blog at Billing & OSS World touting a Gartner forecast that mobile advertising will generate billions of dollars in revenue by the year 2013. Ty asked a great question, in effect, these figures sound great, but what if anything is really happening in the market? Who’s doing this? As the animated hologram told Will Smith’s character in the movie I, Robot: “THAT, detective, is the right question.” Some big (and small) players are making important things happen that are building the foundation for that promised market growth.

Transverse is a unique open systems OSS/BSS provider that offers solutions via open source GPL license with no license fees, and users pay if they engage the firm for advanced functionality, proserv, training and product extensions. Transverse offers a product module called Customer Asset Management that, simply put, offers a way for wireless operators to monetize their subscriber bases by offering them as an audience to advertisers. The success of that approach, of course, hinges on persuading them to opt in for ads on their mobile devices, usually by offering discounted service rates or promotional affinity programs. To that end Transverse commissioned a survey conducted by iGR, a market strategy consultancy focused on the wireless and mobile industry, which interviewed 810 wireless subscribers ages 18 to 65. The study found that 56% of the mobile users who responded to the survey would view ads on their phones in exchange for a 25-50 percent discount on their monthly bill.

At Microsoft, the mobile advertising team is led by GM Charles Johnson and New York-based Marc-Henri Magdelénat, one of the three founders of ScreenTonic, the mobile advertising pioneer acquired by Microsoft in 2007. Magdelénat and ScreenTonic built the largest European mobile advertising network by partnering with tier 1 operators such as Orange and sold more than 2,000 mobile ad campaigns to advertisers such as Coca-Cola, Nike, Reebok, HP and Peugeot. Microsoft is showing signs of life in that regard: In early 2009 it beat out Yahoo! and Google for the half-billion-dollar contract to provide Verizon Wireless with portal, local, web search and mobile advertising services. More recently Microsoft and Verizon launched a mobile ad campaign for Global Hyatt Corporation designed to boost membership in the Hyatt Gold Passport frequent guest rewards program and drive traffic to Hyatt’s mobile website.

Then in September 2009 Microsoft Advertising launched its Behavioral Targeting initiative, which works by anonymously tracking behaviors of users and classifying them into unique segments using web keyword search behavior from Bing, visits to Microsoft sites, Hotmail newsletters, Xbox subscriptions and Windows Live profiles. [So exciting to know that by virtue of just about every move we make online, we are all now part of Microsoft’s own CAM-like monetized audience.]

The Microsoft and Transverse strategies are conceptually (if not actually, yet) related because the big money really starts to flow if Microsoft can offer advertisers access not only to its own growing mobile advertising network but to legions of subscribers from multiple large Verizon-like operators, and a solution such as Transverse’s CAM could accelerate that business model.

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