What’s in it for me?

How mobile operators can drive early revenues from mobile advertising that promotes their own content

Brands and mobile operators alike are testing mobile advertising as a new way to reach consumers and increase revenue. But mobile operators are finding that building a new market for brands takes time.

Operators are trying now to build their mobile advertising businesses. But the market is still in its infancy stage. While operators are waiting for the market to take off, they can get some practice in their own backyards – promoting their content and services to their subscriber base through promo – or house – ad inventory.

Promo advertising inventory is unsold inventory used by a mobile operator to sell other offerings and content, like full-track music downloads and games. By leveraging unsold ad inventory, operators can solve the discovery problem that inhibits content uptake, while also increasing average revenue per user (ARPU).

With banners that advertise specific content, a subscriber can click directly through to that content, remedying the ease-of-use and content discovery problem. And with the right mobile advertising enabler, these banners can be targeted based on demographics or purchase history through predictive analytics, making it more probable that consumers will purchase the content. One operator found that targeted promotions resulted in more than 4 times more content purchases.

Strategy Analytics predicts the mobile advertising market will reach $14.4 billion by 2011, and many of us are banking on the fact that advertiser revenue will be a substantial line item on an operator’s earnings statement.  But until the big brand dollars come in from advertising, the smart operators are leveraging their advertising infrastructure investment to target relevant promotions to their subscriber base to increase ARPU.  That is a business case that any operator can appreciate.