Would You Like Ads With That?

Users have shown an increasing tolerance for advertising in new forms of mobile media, including videos, music portals, and free email services. But will that extend to short messaging services (SMS)?

That's the bet of startups Amobee Media Systems and Anam Mobile , which have teamed up to create an ad-serving system for carrier-based SMS. (See Anam, Amobee Team.)

Anam, a Dublin-based developer of messaging infrastructure technology, provides the back-end system to serve the ads across any device and any platform. (See Moto Invests in Anam Mobile and Anam Mobile, BT Partner.)

Amobee Inc. , which was founded in 2005 in San Francisco, delivers the media sales platform and the relationships among carriers, content providers, and advertisers.

The new SMS system, said Amobee founder and CEO Zohar Levkovitz in a statement, marks "the beginning of a new era in ad-funded mobile services.”

“Mobile is the last remaining medium in which the user bears the full weight of payment," Levkovitz added, "a situation that will ultimately stifle growth."

With 1 billion devices sold in 2006 and some 985 billion text messages sent [ed. note: give or take a billion, right?], it's hard to detect any growth-stifling going on, but Amobee senior vice president and general manager for the Americas, Roger Wood, makes the point that for a rich content universe to expand in any new medium, a universal system for selling, delivering, and measuring the efficacy of ads has to be developed.

"Typically in the world of advertising," says Wood, who was formerly corporate vice president of global marketing at Reebok International, "you don't see an explosive increase of media buying until it becomes standardized across platforms. As with any marketplace, buyers and sellers need a strong understanding of what is being bought and sold, and a common language -- a patois, if you will -- to communicate efficiently and effectively."

That's where Amobee comes in.

"Because of the multiple platforms and applications in the mobile world," adds Wood, "for a media buyer, when you buy against mobile, there's currently no way to make an integrated buy."

Now, for instance, if you want your advertisement associated with, say, Justin Timberlake, you can now make a "Timberlake buy" that will appear regardless of the medium in which he appears, whether it's a movie theater, on TV, on the Web, or in the various forms of mobile media.

The SMS advertising delivered by the Amobee/Anam partnership is completely opt-in: The user tells his or her carrier, "Yes, I'd like receive ad-supported text messages." When an inbound message appears, there's a mini banner ad across the bottom of the screen. For that particular message or session, the user pays nothing.

In trials, Amobee claims, user acceptance was over 90 percent. And the free content model also dramatically increases uptake. While only 6 percent of potential mobile customers choose to download a game that carries a regular price, the company says, 30 percent download the free version.

While Amobee, which is backed by blue-chip Silicon Valley venture funds including Accel Partners and Sequoia Capital , makes its money on a cut of the advertisers' media buy, its real customers are the wireless operators and Big Media.

"Our primary concern," explains Wood, flicking through his industry jargon primer, "is to facilitate the conversation between the Tier 1 carriers and content publishers in order to maximize the value of the visual real estate."

— Richard Martin, Senior Editor, Unstrung

IPobserver 12/5/2012 | 3:15:27 PM
re: Would You Like Ads With That? Ads with SMS sounds horrible.

From the article:
The user tells his or her carrier, "Yes, I'd like receive ad-supported text messages."

Like, who's going to opt into that?

I guess if you get a free music track or something, it would be OK.

eponymous 12/5/2012 | 3:15:16 PM
re: Would You Like Ads With That? If I got free or seriously reduced rates for text messaging ? Why the hell not ? I see banners all over the net , why not on mobile ? Bring it on.
IPobserver 12/5/2012 | 3:15:16 PM
re: Would You Like Ads With That? Banners on mobile are OK. Like, say, on The Onion wap site.

But having someone send you an ad by text, no way.

Aren't text's so cheap as to be more or less free any way?

joset01 12/5/2012 | 3:15:15 PM
re: Would You Like Ads With That? The cost of text messaging entirely depends where you are. Definitely cheap as chips in the UK.
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