Mobile Advertising

http://news.com.com/Advertising+seeps+into+the+cell+phone/2100-1039_3-6115617.html?tag=st.num

Its payback time and the mobile operators are ready to open up their networks to marketing partners!

For years, the mobile operators had displayed unwillingness to incorporate marketing content into their multimedia services for fear of losing customers. But now with the mobile phone being used to download ringtones and over the air full-track downloads, the opportunities have grown. Astronomical amounts spent on 3G licenses and continuous pricing pressure on voice services have made them more amenable to an advertising-driven business model.

Of course, the nature of marketing that consumer will receive well is still a matter of debate. The popularity of online search-based ads suggests that mobile consumers may respond positively to it as well. These will certainly, in my opinion, be more effective and targeted than the random ads popping into your mobile because you happened to pass a starbucks or another merchant.

Another major source of ads could be the mobile music business which has been a major driver of uptake of 3G usage. As pricing pressure comes to bear on this segment, more and more advertising will start showing up on the mobile phone, as content providers and mobile operators will seek to subsidize the final cost of downloading music to the consumer. Presumably, consumers will be more accepting of ads that bring down the cost of listening to mobile music. And it is in this context that News Corp’s acquisition of Jamba an online music content provider becomes significant. Expect some acquisitions in this space as the big players jostle for their space in the bandwagon!