The device now known as the cellphone, which makes on-the-go conversing so convenient, is morphing into a content device, a kind of digital Swiss Army knife with the capability of filling its owner's every spare minute with games, music, live and on-demand TV, Web browsing, and, oh yes, advertising.
For marketers and media companies, it's a new distribution channel with a built-in billing mechanism, allowing subscribers to pay for purchases through their carriers. And, if treated gingerly at this early stage in its growth, mobile may become the best ad delivery device known to mankind. Not this year, and maybe not next year, but sooner than you think.
It all starts with content, the stuff that will attract consumers and advertisers seeking to reach them. "Content is currency," says Jim Manis, global chair of the Mobile Marketing Association and senior VP at content aggregator M-Qube.
The Weather Channel, for example, offers weather services on mobile phones and has upped its monthly subscription price to $4.99.
"Studies show consumers are willing to pay up to $6 [for content] with very little drop-off," says Louis Gump, VP-mobile business at the Weather Channel. Mr. Gump says his cable network has almost 1 million subscribers, and asserts: "This is a real business ... Mobile is not a weaker dot-com."
HERE COME COMPETITORS
The new opportunities are spawning new competitors. Mobile ESPN, planning to start up this fall, will really put access to content front and center. Its phone "sideline" software allows easy access to personalized sports content.
"The quality of content is about to get dramatically better," says Manish Jha, Mobile ESPN senior VP-general manager for emerging media. Mobile ESPN and others operate through other carriers via an arrangement known as an MVNO, for mobile virtual network operator.
Advances in technology are also making mobile handsets more alluring to marketers. A common short code system has been established facilitating text messaging programs for polling, contest response or even true mobile commerce. A marketer wanting, for example, to conduct a sweepstakes for a trip would purchase the text messaging code "trip," or the numbers 8747 on the phone, and would advertise that text messaging code in other media.
Mark Kaplan, partner at Anomaly, says his New York agency is working on a plan to allow marketers such as Nike's Jordan brand to use these codes for what he calls "real" mobile commerce. The vision: A prospective customer seeing a pair of shoes advertised on a billboard or in a TV commercial would simply punch in the code and have the product delivered in days.
Mobile TV also is charging ahead. MobiTV, which provides live mobile television for Sprint and other carriers, has topped 500,000 customers. Carriers such as Sprint have begun to carry live TV channels on the phone. Those programs can include conventional commercials.
The option of on-demand TV clips is starting to see some subtle advertising, such as text-only "bumper" ads, while some marketers, such as Visa International, are sponsoring alerts.
Mr. Manis tempers this air of limitless opportunity by warning marketers that "mobile is a channel, not a strategy," and mobile marketing programs take "more lead time than you think, and sometimes more money."
Adds Courtney Acuff, associate director-wireless specialist at Starcom IP, Chicago: "Wireless should never be a stand-alone medium. It's a robust piece of an integrated media plan."
Dialing for dollars
Number of wireless minutes used in June 2005.
Number of text messages sent monthly as of June 2005 (up from 1.2 billion in September 2004).
Amount consumers paid for wireless data in 2004. (By comparison, U.S. movie box-office spending hit $9.5 billion.)
Number of wireless subscribers as of June 2005 (up from 203,000 in 1985).
Percentage of all mobile games downloaded for first half 2005 that were revenue generators (the other 36% were free).
Average monthly wireless bill as of June 2005 (down from $95 in June 1985).
Average price mobile consumers paid for a puzzle/strategy game.
Sources include CTIA-The Wireless Association, Telephia, IDC