Nokia announced plans to purchase Enpocket, a Boston company with the technology to display ads on cellphones, including adding video and banner ads to mobile web pages. Enpocket counts Pepsi, Sprint, MasterCard and Match.com among its clients and provides services ranging from planning and creative to delivery and analytics.
The agreement, details of which were undisclosed, is expected to close later this year.
Going up against the portals
It's a move that pits the handset maker directly against rival carriers as well as more traditional ad sellers such as Google, Yahoo and other PC portals. Content providers and media companies, such as Weather Channel and MTV, also hope to rake in additional revenue from mobile ads.
Tom Henriksson, director of Nokia's emerging business unit, said that with Enpocket, Nokia will have "some core competencies which can help us propel that whole market forward." Mike Baker, who will continue in his role as Enpocket's president-CEO, said he expects that with Nokia, mobile marketing will take a leap forward. "If one company can establish a standard, it's Nokia," he said.
Nokia, which has been moving beyond hardware and into software and services, earlier this year announced it was planning to sell ads on mobile phones. It also rolled out Ovi, a service which will include social networks, games, music and maps.
Not sitting by quietly
Earlier this year, Enpocket competitor Third Screen Media was purchased by AOL; Microsoft acquired ScreenTonic. Google, meanwhile, last week said advertisers using its search listings on the PC will also see those ads showing up on mobile phones.
Currently, advertising on mobile phones has been limited. Banner ads have been running on publishers' mobile websites and on Sprint's "deck," or landing page. Marketers also have been testing some early forms of mobile advertising, such as text messaging and coupon campaigns.
Overall, most consumer surveys show strong resistance to advertising on mobile phones, particularly if it comes as spam text messages or old-fashioned telemarketing. Proponents of mobile ads say the marketing will be so highly targeted and useful that consumers will find it valuable, particularly if it's a coupon for a discount at a store nearby. The industry's oft-cited example of this Starbucks using a phone to offer a discount for a latte on a cold day as a consumer nears one of the coffee chain's locations. Naturally, privacy advocates have expressed concerns about ads that determine a cellphone's location. Many surveys indicated consumers will go along with mobile ads only if they receive some monetary value.
According to Informa Telecoms and Media, marketers spent $871 million in cellphone advertising globally in 2006. Kelesy Group estimates search revenue alone on mobile phones will grow from $33.2 million this year to $1.4 billion by 2012. Overall mobile phone advertising has been projected by Informa and others to range from $5 billion to $19 billion in 2011.