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Mobile commerce

Mobile Ads Rack Up Cash, Social Status

9:30 AM -- Different attempts at mobile advertising have been made over the years -- swapping ad views for data, proximity-based SMS alerts, banner ads on websites, even 3-D videos that "are so cool you won't know they're ads!"

But, so far, we always know it's an ad, and the millions in revenue that was supposed to result has eluded marketers, brands, wireless operators and the like.

That won't stop them from trying to make it work though. In their constant quest to monetize mobile, companies keep experimenting with mobile ads. And, that's a good thing, because the tide is slowing turning.

Mobile ad companies received more than $70 million in funding in June, according to Rutberg & Co. 's latest research report. The investment bank expects significant growth and innovation over the next few years. "One executive in our research conversations predicted that 'the mobile advertising market will surpass desktop advertising in four years,'" the June report says. (See Mobile Funding Hits $1B in June and Mobile Gets $825.1M in New Investment in May.)

There will be some very well-funded attempts too. The consumer application space received $206.2 million in June, and mobile ad-specific companies that got funding included:

The social network effect
One area that stood out in the Rutberg report was social media. The bank points to Twitter Inc. as one of the companies showing early signs of success with mobile ads. The micro-blogging site is now generating more revenue from mobile ads than desktop ones, it claims, because it's found mobile ads to be more interactive. For example, P.F. Chang's spent $25,000 to pitch a Lunar New Year promotion to Twitter users and received 1 million clicks in just the first four days, 70 percent of which came from mobile devices.

Facebook is also experimenting with mobile ads, and new research from Nanigans suggests that click-through rates for the site's "sponsored stories" are higher on mobile, while the cost-per-click is lower, making it an attractive platform. Facebook is also exploring making its ads more valuable by targeting them at consumers based on the apps they use, tracked through Facebook Connect.

[Ed. Note: Is this a good time for a shameless plug of our social media survey report? Check it out, here.] These social sites are doing well, in part, because they're huge networks. But they are also helping to seed the market for mobile ads, which has so far been tenuous at best. Ads will still struggle to find the most effective, yet least obtrusive, place in mobility, but I expect we'll only see more of them.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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