Mobile Entertainment

DURING the last 18 months there’s been an explosion of interest in mobile advertising. So much so that two of its biggest hitters, ScreenTonic and Third Screen Media, were acquired (expensively) by Microsoft and AOL, respectively.

Most of the attention has been on serving banners to mobile internet sites. However, an equally fascinating means to put ads in front of mobile subscribers is to embed them in content products themselves.

Which is just what a small number of specialists are doing. To recap, these companies embed pics or small video clips into the loading screens of mobile games, videos or even music tracks.

There are three main benefits: there’s little or no need to get involved in the production process (as there would be required for product placement within a game, for example); brands can use existing media assets; and advertisers can specify precisely how many products an ad appears in and which territories it covers. The last point may be the most salient of all, given that the biggest single criticism of mobile banner advertising so far has been its imprecision.

Because of this, the embedded ad ‘sector’ has grown fast in the last year: Germany’s Actionality, which specialises in gaming, claims to have many live services available; Amobee has run four trials with major operators and is lining up three launches; Ad Infuse and Minick have launched a free comedy channel with Swisscom Mobile; Rhythm New Media is powering 3UK’s free video service.

The latter also worked with EMI Music and T-Mobile UK on a trial of ad-supported mobile video from artists such as Lily Allen, Gorillaz and The Kooks. Advertisers include Coca Cola Zero, General Motors, Gillette, Land Rover, Toyota and others. EMI and Rhythm have conducted similar trials in North America.

These are just a few of the more public announcements. But there’s something about embedded advertising that brings out the Greta Garbo in operators: they come over all mysterious and silent. However, interest is certainly growing.

Scott Cullinane, Actionality’s CEO, says the operators appear convinced. It’s the advertisers that remain cautious: “It was like someone flicked a switch in 2007, especially across Asia and Europe,” he says. There’s been tremendous interest. The challenge remains the advertiser. The case for mobile still has to be made for many of them. It will take a while, but we’re getting a positive reaction.”

Broadly, there are two approaches to serving embedded content ads. Some companies – Amobee for example – ask developers for source code in order to ad-enable their products. Others – Actionality, GreyStripe – automate the process so ads are injected at the network level. There are merits to both. The latter requires less from the advertisers, certainly.

But according to Amobee CMO Patrick Parodi, his company’s approach returns control to the operator. He says: “We’ve built one ad server that supports all mobile ads whether in games, video and SMS or on WAP banners. Operators can target based on behaviour, frequency cap and so on. The idea is to give them a dashboard. They remain in control rather than let a company like Yahoo come along, take the market away from them and commoditise it.”

At present, advertisers fall into two camps – those that are strategically attached to mobile such as handset and content companies, and youth/innovation brands that offer lifestyle products consumed on the go or at home. In the case of, say, the embedded ad service offered by Swisscom and powered by Ad Infuse, the advertisers include Sony Ericsson, Napster, Canon and others.

This service, like that of the 3 UK video offering run by Rhythm New Media, enables operators to offer content for ‘free’. But the question of ‘free’ is a vexed one. Free is certainly the way to go as far as Hovr and GreyStripe are concerned.

These two US companies each offer games at no cost and request that consumers sign up to a community. The former claims 100,000 members, while GreyStripe says users have downloaded seven million games from 70 publishers in a year.

Others are less keen. According to Patrick Parodi, CMO of Amobee, ‘free’ guarantees high download numbers, but not necessarily views/plays. “If you charge, the consumer is more likely to play or watch. But it’s that old balancing act – the advertiser wants the reach, the operator wants the revenue.”

His views are echoed by Cullinane who actually believes you can have it both ways and charge the full price where the ad is contextual. He says: “A golf game could feature an equipment ad that actually makes the game closer to the TV experience of watching golf than if it was missing.”

Of course, this implies the use of existing ad assets – which is great news for brands as it saves money and reduces the need to learn new mobile-specific skills. This also explains the focus on ad-embedded video from many in the sector.

Stephen Upstone, Ad Infuse’s MD of European business development, explains: “Video is easier to understand for the advertiser because they’ve already seen it go beyond TV and into Tube stations and taxi cabs. Games are different because we’re still figuring out what works best and how to use assets that already exist.”

That said, some advertisers have been more creative. The Economist, for example, supported a Sudoku mobile game by arranging the words ‘never be puzzled’ on the grid.

Over the next 12 months, embedded ads look set to continue their momentum. Much attention will be focused on emerging mobile markets where disposable income is lower. It’s worth noting, for example, the partnership between Amobee and India’s Hungama, which is not just a content giant but also a huge presence in mobile marketing and has close links with dozens of consumer brands. Then there’s music. In-song advertising sounds like a contradiction in terms. But when there’s a screen involved, as in mobile, anything’s possible.