Can Yahoo Mobilize Mobile?

At our Advertising in Social Media forum this week, I found myself chatting with JupiterResearch’s Emily Riley and Cymfony’s Jim Nail. We were playfully debating which industry engenders the most consumer ire: the airlines or cell phone providers.

The following day, I found myself at Yahoo’s Goin’ Mobile summit. The company’s ad sales division is making an aggressive push to get advertisers on board with mobile ads, an opportunity sales chief Wenda Harris Millard is calling a way to reach “possibly the biggest audience in the world.

“We think this will be the biggest advertising opportunity that exists, not the PC,” she asserted over lunch before presenting that argument to an audience of several hundred Madison Avenue executives.

U.S. mobile phone penetration is close to ubiquitous, and 90 percent of the devices in consumers’ pockets are Web-enabled. Last year, Yahoo’s mobile user base tripled, and that was before the company introduced its favorably received Yahoo Go service, aimed at making the mobile experience seamless. Yahoo claims to be adding 1.5 million users each month, making it the leading mobile brand in America.

And it’s added plenty of advertising opportunities around mobile search, display, video, in-game ads, and “anything around downloads.” David Riemer, Yahoo’s VP of audience marketing, considers mobile a new, highly personalized out-of-home advertising opportunity. “There are not a lot of competing messages on that screen,” he said.

Yahoo is also bullish on the fact it’s able to combine mobile and Web subscriber data for more personalized experiences across both handheld and PC platforms.

The afternoon was filled to the brim with compelling mobile marketing case studies, many presented by Laura Marriott, who heads the Mobile Marketing Association and writes ClickZ’s mobile marketing column, and Isobar’s Gene Keenan. Brands successfully advertising on mobile platforms domestically include Adidas, Procter & Gamble, and Pizza Hut.

Keenan says now’s the time to get on board. “We’re getting a 2 to 10 percent click-through rate. It’s like the old days on the Internet,” he said with glee.

There was even a show-and tell of next-gen technology. Scanbuy’s Jonathan Bulkeley demonstrated how barcode scanners in mobile devices tell shoppers when and where a head of lettuce was picked in Japan and when the next bus arrives at your stop in the Philippines. Marriott and Keenan shared a European ad for a mobile provider that literally moved some in the audience to tears. In the spot, a flash mob is dramatically convened via text messaging to rescue a beached whale.

Frank Boulben, who heads new business development for the world’s largest mobile provider, Vodafone, was on hand as well. He told the audience his company is poised to introduce flat-fee data pricing in Europe, thus “liberating usage.” Content and services will increasingly be ad-funded. “We have the audience and the inventory,” he affirmed, saying the company is looking toward ads on the mobile Web, content messaging, partner marketing, search, even ads on device idle screens (no connection required).

Vodafone was in the house, but notably I didn’t see anyone from Verizon, AT&T, Nextel, or other U.S. mobile providers. At lunch, I’d asked Yahoo’s top mobile executives whether they’re working with the providers — and if so, whether the providers see the platform’s value.

The answers I received from Millard and Dick O’Hare, VP of global strategic partnerships and emerging platforms, were…diplomatic. Along the lines of “We’re trying to show them the value in this,” and “CRM is what they’ll really have to work on in the coming year.”

While no one will come right out and say it, Yahoo seems well aware this country’s highly competitive mobile providers may be saving the newspaper industry with their relentless advertising. But when it comes to customer service; transparent, easily understood service agreements; and pricing models that gouge both sender and recipient on calls and messages, we’re back to that earlier conversation I had with Riley and Nail.

Here’s an example: Last week, I called my provider, Sprint, about upgrading my top-of-the-line smart phone, as its Web site provided none of the requisite information. After quoting three prices higher than the prices on the site, the salesperson informed me I could only upgrade by visiting a physical store. The rep was blithely unconcerned when I told her if I switched providers, I wouldn’t have to visit a store and take a number — and my chances — on a several-hundred-dollar upgrade that would necessarily result in an extension of my Sprint contract.

Such stories are anything but unusual. Everyone’s got a mobile provider horror story. Ten years ago, consumers were largely steered to their first provider through work — corporate discounts were offered to early adopters. With grandmothers and their grandchildren alike now bristling with mobile technology, something’s got to give.

Advertisers are increasingly eager to experiment with mobile advertising. Critical mass on the consumer level is firmly established. From corporate behemoths such as Yahoo to tiny mobile services startups, opportunities, formats, and services are being developed to ease marketers’ path into the channel.

But only mobile service providers are in a position to make the transition into mobile advertising easy and attractive to consumers. Until they ease pricing, upgrades, service contracts, and customer service, mobile advertising and marketing will remain five years behind the times in the U.S. market as compared to Europe and Asia.

Meet Rebecca at Search Engine Strategies on June 12-13 in Toronto.