Ad-Funded Mobile Content & Services: Crossing the Chasm Soon?

(c) MocoNews

This was one of the questions that dominated the World Telemedia conference I attended in Budapest. The jury is out on whether ad-funded will be the basis for a sustainable content-selling strategy, but the window of opportunity is open wide for offers that use advertising to offset mobile data charges. And keep in mind it's not just about ad-funded mobile content; mobile services are also a crowd-pleaser. In fact, offering users services that allow them to communicate P2P may be a much better way to lure and lock in customers. This is the approach of eBuddy, a Dutch provider of ad-funded IM services. The company provides users free access to all IM services (MSN, AIM and Yahoo) without need of a software download. The business model? Users view advertising on their mobile phones at the beginning of each IM session. To date eBuddy counts 4 million mobile users (the largest user concentration is in Argentina followed by the U.K. and the rest of Europe) and 200,000 + logins daily.

Building on this momentum, eBuddy is gearing up to launch a new ad-funded mobile service in 2007 that Jan-Joost Kraal, eBuddy director of mobile, said will effectively scan chat for keywords and create linkages to relevant advertising. His dream is to collect enough information (based on the users profile and preferences revealed by the chat) to match the right ads with the right people at precisely the right moment. To this end the company also plans to develop ad categories (such as cars and music) and profiles (car lover and music lover) that will assist in triggering an ad-funded response to certain key words. To waylay any privacy concerns the service would be entirely opt-in, and users would be asked to fill out their profiles and provide more personal information. Moving forward, Kraal told me eBuddy may offer the service as a mobile client as part of a subscription service free of ads and other intrusions.

SNAPin, a U.S.-based provider of self-service software, has a different approach. Since it essentially enjoys the undivided attention of users during the lesson, its strategy is to present users advertising related to the services and content they interact with at that moment in time. Tom Trinneer, SNAPin VP of marketing and product management, told me the current model uses advertising to promote operators' on-portal content. Orange in the UK, a SNAPin customer, uses the service to suggest similar content and services to users who have already exhibited an interest in that content/service through their initial choice of training. For example, SNAPin shows users who frequently access the camera function on their phone an ad for Orange's photography service, a subscription service users can download to their phones. Moving forward, Trinneer expects operators to proactively invite brands to the table (this content is brought to you by) and more fully integrate ad-funded schemes into their on-portal content promotions. Again, it’s early days for ad-funded, so we’ll have to watch if these campaigns really drive positive results. But one thing for sure: the clever use of contextual advertising will separate the leaders from the also-rans.