Control Freak Operators Hindering Mobile Ad Market?
By Dianne See Morrison - Thu 06 Dec 2007 05:13 AM PST
In the battle to control mobile advertising, operators are being painted as control freaks. Bloomberg reports that web search companies Google, (NSDQ: GOOG) Microsoft (NSDQ: MSFT) and Yahoo (NSDQ: YHOO) are hoping to “generate billions of dollars in new revenue” with mobile advertising, but that operators don’t want to give up control of their networks. Operators counter that they are interested, but are moving slowly to protect customers.
Chad Stoller, head of mobile practice at San Francisco ad agency Organic, told Bloomberg, ``The carriers are too busy trying to protect the money they are making now to look at the next way to make money. [They] want to control every aspect of the relationship between the consumer and the phone.’’
Web search firms and advertising agencies want to sell banner ads on mobile internet pages, but say that operators are holding the market back by keeping mobile Internet rates high to preserve other revenue forms that advertising might undermine. For example, operators generate extra earnings selling ringtones, internet access, and often their own content services such as news, weather updates, and driving directions. Cheap access to the web might see customers bypassing operator services completely, and while networks would get a cut of ad revenues, there is a question mark as to whether they would make up the loss in other earnings, and of course, there’s the loss of control over the customer.
But it may be that advertising will prove to be an easier way to squeeze revenues from the mobile internet. While carriers such as Sprint (NYSE: S) charge subscribers $30-$40 for browsing the web, they charge another $10 for a shop-finder service. Microsoft’s head of mobile services Brian Arbogast noted, “Once you already have a customer spending a lot of money with you every month, it’s hard to get them to spend another $10 or another $5 or another $1. The incremental dollar in advertising revenue might be a lot easier to get.’’
Posted in: Companies, Google, Operators, Yahoo, Mobile Adv & Mktg
