Who's Fueling Demand for Mobile Ads? Mobile

Publishers Snap Up Inventory to Drive Wireless Web Users to Their Own Sites

By Published on .

Most Popular
SAN FRANCISCO (AdAge.com) -- Mobile marketing is taking off in the same ironic way marketing on the PC-based internet did: Publishers are establishing websites and then seeding the new medium by buying ads on other mobile sites to draw traffic to their properties.
Maria Mandel: 'Mobile is less about sheer numbers and volumes, but more about targeting.'
Maria Mandel: 'Mobile is less about sheer numbers and volumes, but more about targeting.'

"A lot of publishers and brands are building their mobile presences just now, and the first thing they try to do is try to drive traffic there and the best way to drive traffic is to advertise in that same medium, just like in the early day of the Internet," said Jeff Janer, chief marketing officer, Third Screen Media, a mobile ad company.

Mobile web ad campaigns tripled
Mr. Janer said Third Screen Media has publishers representing 225 million mobile impressions per month, up from 50 million in the last quarter of 2006. He said the number of mobile web ad campaigns launched in the first quarter of this year tripled from the year-ago period. "They are both growing tremendously," he said. "Supply is growing faster than demand."

Maria Mandel, partner, executive director-digital innovation at Ogilvy & Mather, said the number of impressions per month is not what drives her clients. "Mobile is less about sheer numbers and volumes, but more about targeting," she said, because marketers view mobile as a "channel to break through the clutter and connect with the customer. It's about targeting the right people vs. volume."

Ad rates are holding up at $28 to $30 cost-per-thousand users overall, Mr. Janer said. First-tier mobile sites, such as ESPN, command CPMs in the $30 to $50 range, while secondary publishers are getting $20 to $30. Inventory in the under $10 range also is available.

Nearing six-figure deals
Ad deals in the sector are hitting six figures, he said. But to reach the $1 million-plus level "a lot more data [from third-party research] and targeting" of individual ads would be required, he said.

Third Screen Media currently is serving ads on Sprint phones as well as Verizon Wireless. T-Mobile is running trials, as is AT&T's wireless unit (formerly Cingular Wireless).

The Boston-based mobile marketing firm has been the subject of interest from Microsoft and, most recently, AOL's Advertising.com, with a rumored sale price in the $60 million to $80 million range. Mr. Janer has denied the company is about to sell and instead is focusing on growing through venture capital. Although it has come to represent best-in-class inventory, it increasingly will be challenged by Google, Yahoo and other established ad networks serving PC sites.

Venture capital slowing
And one recent study indicated that VC money pouring into the mobile sector may be slowing. Jessica Canning, director, global research, for Dow Jones' VentureOne, said investment in mobile-marketing companies more than doubled from 12 deals worth $58 million in 2005 to 21 deals providing $165 million in financing in 2006. For the first quarter of 2007, however, there were only five deals valued at $34 million, indicating a pace of investment that's growing, but not likely to double again this year. However, she predicted a strong year for mobile, given the strength of interest in search marketing, and in mobile search in particular.
In this article: