The NEXT BIG Thing: Mobile Advertisements?

I have always had a personal interest on figuring out how to make the mobile advertisement model work. Blasting out SMS messages to the general public (ie. SMS Spam) is clearly ineffective and costly, and is also now prohibited by the MCMC (Malaysian Communications and Multimedia Commission). Sending out SMS messages to your registered subscriber base is a step better, but is still ineffective after taking into account the cost involved of sending out the SMS. The lack of pick-up of SMS advertising in Malaysia is a further indication that this model is not working well. I inevitably always delete these pesky SMS adverts that I receive. MMS advertisements, in my opinion, is even less effective and cumbersome. It's also no point getting users to download an application that needs to be activated to view the advertisements. Such applications, like Java games, will need to be closed for the user to make and receive calls and SMSes.

What will work are advertisements that are continuously displayed on the user's handphone throughout the day. Better still if these advertisements can be targeted by the user's demographic, interest and/or location.

From a technology and hardware point of view (ie. the mobile phones), companies like Motorola and Nokia are already working on commercial solutions that will allow such advertisements to be displayed on the from of the mobile phone. So let's assume that this will be forthcoming in the near future.

The KEY QUESTION that needs to be answered to unravel the necessary business model is this: Why will users allow advertisements to be displayed on their mobile phones? There are a 2 feasible answers:

1) They want to get information from specific advertisers (eg. mum's who want to get the best discounts and offers from shops). So users subscribe to to the advertisements they want to receive.

2) The user gets a benefit such as a monthly cash rebate to their postpaid bill, or extra talktime if they use a prepaid account. This is the 'mass blasting' model. But will those advertisements be effective? Unlike the TV, users can hardly be expected to watch their handphone screen for hours at a time continually.

Business Week edition 8 Oct 2007 carried an interesting article on p39 titled 'Telecom Tremors: Will a Google Phone Change the Game'. The articles talks mainly about mobile advertising. It states that in the U.S., a service from Virgin Mobile called 'Sugar Mama' offers subscribers a chance to earn free minutes if they agree to view tailored ads. As of August 2007, more than 425,000 people have signed up. See also Blyk of the UK.

I know for a fact that Celcom has already formed a high level department that focusses specifically on mobile advertisements. It won't be surprising if DiGi and Maxis are doing the same. Mobile Advertising WILL BE the next big thing. The questions are WHEN and HOW. There are opportunities here for us to exploit.

I would like to hear your feedback on the following questions and issues:

1) Who controls the game? The handphone manufacturers (Nokia, Motorola, SE etc), the mobile carriers (DiGi, Maxis, Celcom), or the advertising platform companies (eg. see ThirdScreenMedia)?

2) How can we send effective and targetted advertisements to users? Not advertisements that are immediately closed and ignored when received by the user.(and thus are costly for the advertisers)

3) What is the best channel to reach the user? Via SMS? MMS? A continuous playing screen on the 'homepage' of the phone as suggested above by me?

4) What can we do to make money from this upcoming trend?