Vodafone in mobile advertising push

Vodafone is making a big mobile-advertising push across its international footprint, forming dedicated teams at its local subsidiaries and striking partnerships with specialized agencies and contractors.

The initiative has reached Australian shores, where Vodafone's local operating company expects to make A$10 million (US$8.9 million) from mobile advertising in the current financial year, A$30 million next year and A$100 million the year after next, according to David Green, Vodafone Australia's general manager of mobile advertising.

"Vodafone believes it [mobile advertising] is going to be the next big thing," Green says. "It is a big group initiative for Vodafone ... a huge play."

Vodafone Australia launched a mobile-advertising business unit at the beginning of May, with a five-member team led by Green. It has also put in place relationships with agents, contractors and consultants, with the aim of broadening its advertising-sales reach. Its advertising inventory includes banner ads, microsites, click-to-call campaigns and mobile TV commercials, with ad-funded SMS and MMS likely to be added in 2008.

Green says Vodafone Australia's internal research supports its parent's focus on mobile advertising, saying that mobile users have been spending 25 per cent more time looking at their mobile screens this year than in 2006 and that the mobile content market, which in Australia generated A$500 million in revenues in 2006, has grown 30 per cent year-on-year. "The aptitude for consumers to use mobile for things other than voice is increasing," he says.

The time users spend on their mobiles is largely taken up navigating menus, looking at content on WAP sites and reading SMS and MMS messages, he adds.

About 90 per cent of advertising messages sent to handsets are opened and read, and the click-through rate for banner ads on the fixed internet is about half a percent, compared with 6 per cent on mobile, he says. At the same time, TV viewing has gone down 14 per cent in recent years, radio listening 10 per cent and magazine and newspaper reading 10 per cent and 9 per cent, respectively.

Vodafone Australia is not only selling mobile advertising to third-party brands. It's also using it to promote its services.

The carrier has seen a 50 per cent uplift in the number of users viewing its Street TV made-for-mobile TV series on the Vodafone Live portal since sending out a weekly MMS video summary of the show.

Green said the MMS broadcast was "really powerful." About 30,000 promotional MMSes for Street are sent out every week to Vodafone 3G subscribers who have opted to receive advertising messages.

The TV series itself is advertising-funded. It comprises 30-minute episodes, which are filmed each week in the streets of Australian cities and are streamed from the portal. The episodes include music, interviews with local bands and coverage of local events, interspersed with 15-second commercials.

"[Vodafone] wanted to see if there were opportunities to have TV programs, like on the free-to-air channels, but paid for by advertising," says Hugh Spear, CEO of UK-based messaging-platform provider Dialogue, which is enabling the Street TV MMS broadcast for Vodafone.

The Australian carrier is trying out ad funding on just four of the 50 mobile TV "properties" in its portfolio, Green says. It keeps all of its TV commercials to just 15 seconds.

Some of the brands buying advertising space from Vodafone include Coca-Cola, Pepsi, Nivea, Universal Pictures and handset maker LG.

For mobile TV, a brand will typically sponsor a program for a month, Spear says. The brand is entitled to run a short promotional video or insert a click-through banner at the end of the weekly video-clip summaries sent to subscribers via MMS.

Advertisers often use banners to persuade users to opt into their mobile-marketing databases. As an incentive, they might offer users a top-up of phone credit or a free piece of content, such as a ring tone.

One of the companies that Vodafone Australia has linked up with to sell advertising is NineMSN, a joint venture of Microsoft and one of Australia's leading broadcasting and publishing companies, PBL Media. NineMSN has become a local-market leader in online advertising and has aggressively diversified into mobile through the acquisition of mobile marketing pioneer 5th Finger and content aggregator HWW.

"NineMSN are a sales partner, and they provide some content," Green says. "They have about 70 sales people who sell on our behalf."

The carrier also plans to start advertising and selling physical goods on its WAP portal. One of its first partners in this endeavor is Potters Trick Bits, which sells handset accessories, such as flashing phone holders and flashing necklaces that plug into a phone, which cost A$10-15. "We provide the discovery, the advertising of it, and they [Potters] do all the back-end," Green says. "We will take a revenue cut. We also charge for the ad itself."

Mobile Media is a sister publication of telecoms.com

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