On the heels of its controversial buyout of BellSouth, AT&T will begin selling ads on cell phones as well as its TV and its Internet service this year, according to a report in The Wall Street Journal. The wireless ad opportunities will be made available later this year, while the Web and TV offerings will be sold sooner.
"Advertisers don't need to be convinced to use the [mobile] medium," said Will Hodgman, CEO of mobile market research firm M:Metrics. "The audience is drawing the marketer, where it's usually the other way around."
An average of nearly 14 percent of U.S. mobile users, or 27.5 million, reported receiving up to five ads on their cell phones between September and November of last year, according to M:Metrics. An average of about 1.7 million were served six to 10 ads on their phones during that time. The research firm found that 4.6 million users surveyed responded to a cell phone ad, and more than 17.4 million of the ads promoted services from the users' current mobile carriers themselves. Most of today's wireless ads are text-based SMS ads, said Hodgman.
AT&T has been building up an ad sales team, and pushing its ad opportunities to potential advertiser and agency clients, according to a separate report. In doing so, the company follows in the footsteps of other large mobile carriers in offering advertising. Sprint announced it would serve ads to its mobile subscribers on its content decks and content menu lists. Verizon Wireless also recently announced it will sell banner ads on mobile Web sites.
Serving wireless ads is "perfectly appropriate now, and in some cases I would have thought it would have happened earlier," said Hodgman. By creating mobile ad revenue streams, carriers are "moving beyond the chatter" about offering wireless ads and doing it, he continued.
The merger with BellSouth brings mobile phone operator Cingular Wireless into the AT&T fold. AT&T will now offer cell phone and Internet service packages to consumers, according to the Journal report. In addition to its Internet and wireless ad opportunities, the company will sell ads on its Internet-based U-verse television service, which is offered in a handful of U.S. cities. AT&T did not respond to ClickZ's inquiries in time for publication of this story.
"The opportunity for advertisers across services provided [including SMS, Web browsing and video] is quite ripe," added Hodgman, who believes video could prove an especially beneficial place for advertisers. Though it's growing, the primarily young audience accessing video content on their mobile phones is small, he noted, in part because of subscription fees that may be cost-prohibitive to some. This presents an opportunity for advertisers to underwrite the cost of video access, Hodgman said.
Indeed, sponsoring video content could be a good way for advertisers to earn the appreciation of mobile users who might otherwise resent being served ads on a platform they pay to use.
V CAST, Verizon's subscription-based multimedia content service, won't be running ads anytime soon, Verizon Wireless Executive Director of Corporate Communications Jeffrey Nelson told ClickZ in November. It will remain an "ad-free zone," he said. The firm announced it would provide select YouTube videos to V CAST subscribers at that time late last year.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
March 19, 2014