Naturally, the news that Web giant Google was getting in on the action in mobile by acquiring AdMob created an atmosphere of excitement and optimism at the Global Mobile Marketing Forum last week in L.A. But it was more than a mood; it was a quantifiable trend. Mike Wehrs, President & Chief Executive Officer, Mobile Marketing Association (MMA), reported that mobile marketing shows an increase of 40 percent over last year.

What’s more, mobile is a line item in more budgets. Mike gave us the example of German carmaker Volkswagen, which is “doing things exclusively with iPhone Apps independent of other media channels”.

Another sure sign that mobile marketing has arrived full-force was the announcement by Microsoft (just prior to the event) that it had decided to join the MMA. In fact, Microsoft became the organization’s inaugural Premier Member, reflecting Microsoft’s commitment to both the association and the mobile marketing industry. As Charles Johnson, General Manager, Microsoft Mobile Advertising, put it in a press statement: “As mobile advertising has grown in significance, the time is now for carriers, OEMs, publishers and advertisers to join forces to capitalize on that growth.”

REAL RESEARCH

Peter Johnson, VP Research, Mobile Marketing Association, provided us the latest findings from the Research and Metrics Committee.  A highlight: leveraging coupons and loyalty programs are winning customers. It is found to be the most successful of all the mobile marketing approaches (!).

Another surprise is spending. To date the average media spend by agencies on mobile is still only 1.8 percent of the total spend.  However, those agencies that have experienced successful mobile marketing have already moved mobile up to account for 2~3 percent of their overall spend.

In 2009 spending on mobile marketing was $1.7 billion in total. But there was a potential for $2.5 billion, if we think back to the boost in spending shown by companies successful in mobile marketing.

Success breeds success – and encourages more spending. To get there from here the industry needs more education and a sharing of best practices. To this end the MMA is working to encourage knowledge sharing worldwide and making sure best practices are better evangelized.

BRAND SUCCESS

But the real proof that mobile is at the top of the agenda comes from the major players pushing the envelope.

COCA-COLA COMPANY: Tom Daly, Group Manager, Strategy and Planning, Coca-Cola Company, revealed what it looks for in mobile agencies. It may not be easy to get into Coca-Cola, but it’s worth it. According to Tom, Coca-Cola is “working with over 400 brands in 200 countries with a minimum of $8K per brand per country, and it is growing and we are looking for new partners.” His checklist for agencies: The company looks for three things.

1) Talent and environment
2) Thought leadership
3) Account management process.

As he summed it up: “We look for best in class to take Coca-Cola to the world leaders in creative mobile marketing and transparency is key.”

AT&T INTERACTIVE: Matt Crowley, CMO, AT&T Interactive, argued local and search are the real drivers for mobile advertising. As he put it: Today the total of mobile ad spend is about 70 percent (display and SMS) compared to 30 percent search. But he expects this will change to 25 percent (display and SMS) and 70 percent search in 2013. In fact, local search is the driver.  “We have seen over 250% YOY mobile search network growth and our goal is to pre-load the YP mobile app with local search on every device.” Matt added that AT&T counts 79 million subs and 22 million on Medianet, AT&T’s mobile portal. “There is over 22 percent access of Medianet daily.”

CNN: Louis Gump, VP of Mobile, CNN, talked about the future of news on mobile. He asked the audience how many look at news on their mobile before they get out of bed in the morning and about 30 percent answered they did. No wonder mobile is at the center of their strategy. CNN has a freemium model (offering the mobile website free and a paid CNN app).

The company debated the pricing for this, but decided on the $1.99 price as a way to keep mobile moving forward as a profit center to propel initiatives across all the mobile strategies of CNN. As Louis put it: “We wanted a dual revenue stream, and at $1.99, yes, there was debate over prices from $0.99~9.99. But we chose that price as we doing this for marketing. We want mobile as a sustainable business platform.  He continued: “We need not only the one-way free route, but a way to sustainability 3.5 and 10 years down the road.” To date 34 percent of users access CNN news only on their mobile phones. This means over one-third of users are only getting their news from CNN and only via mobile. Connect the dots, and “mobile is now the channel for CNN to reach a different demographic of people.”

Interesting to note: CNN doesn’t limit its focus to the iPhone. Instead the mobile strategy is holistic and covers four platforms:

1)    Mobile website (with 11~12 million users  per month – free and ad-supported)
2)    Text messaging (breaking news alerts)
3)    Video- on-demand and streaming (to distribute clips much more widely)
4)    Apps (and here the news is the September 27th  release that has changed the way news is consumed on the iPhone)

FUTURE OF MOBILE

Charles Johnson, Head of Mobile Advertising for Microsoft led an engaging panel on the future of mobile advertising. Ken Wilner, CEO,  Zumobi, stated that that key to mobile is “engagement”. Yes, acquisition is important, but once you obtain a consumer, the on-going engagement is second to none as mobile is with the consumer all the time, everywhere. Frank Babieri, CEO,  Transpera, was particularly bullish about the outlook for video. In his view, of the users that access online video that also access mobile video, “more then 62 percent of the time they will access it from mobile.” Another data point to keep in mind (from Charles): We replace our phones every 12~18months and we’re due to make those purchases soon. Smartphones will likely be the ones we chose, attracted by all their cool features and the great mobile Internet experience. Thus, 2010 will be the year of mass-device transition, and that will accelerate our industry even further.

BANKING: Bruce Withers, Head of Mobile, Wells Fargo, shared his mobile banking vision. He should know. Wells Fargo has been nominated as one of the top mobile banking solutions in North America and part of that success is linked to their sharp focus on youth (Gen Y and Millennials) that are part of the larger group of mobile professionals that need banking services on the go. Some key stats illustrate the success of a multi-approach mobile strategy.

•    Text messaging alerts: the user averages about 19 requests per month
•    Mobile website and iPhone application: users engage in about six sessions per month.
•    Location: Wells Fargo has added unique features in their iPhone App, including an ATM finder and direct links to wellsfargo.com.

CROSS-MEDIA: Mike Carter, CEO, MyThum and Tiffany Gerhard, Sr. Manager, Marketing- Emerging Capabilities, BestBuy, had a great session on the success of cross-media marketing for a retail brand.  For me it was one of the highlights of the day – particularly if we consider that BestBuy was doing NOTHING in mobile two years ago. Now, they have holistic strategy and results that speak volumes (literally). The strategy includes mobile as part of the marketing mix, but it is also core strategy to the company’s CRM strategy. Tiffany pointed out that mobile is a key link in clinching the sale – and everything that follows. “The use case quite good for us is when many of our customers come into the store that find when a product is out of stock. They can just go to their BestBuy application and click-to-buy in one action and then have the product delivered right to their home” But it doesn’t stop there. Mobile allows the company to support the buying process with information and interaction with customers. “Everyday now is a learning process for us to get better with mobile.”

FOOD FOR THOUGHT

Throughout the event execs and speakers raised a variety of interesting points and challenges.

•    Zaw Thet, CEO, 4Info, brought our attention to the need for an industry-wide initiative to establish a mobile cookie.  Today the next best thing is the user’s telephone number or UID on the iPhone.  By using this we can recognize and build cross-media campaigns for targeting users from platform to platform.
•     Chetan Sharma, Chetan Sharma Consulting, stated we are finally seeing the growth of the networks. Now, mobile has surpassed the data card (!).
•    Michael Shim, Head of Mobile Sales, Yahoo, reported that Yahoo’s growth of 54.8 percent is greater then the average for the industry of 45.4 percent with the mobile Internet.  Yahoo is doing unique ad solutions for apps and working on a slew of cross-media campaigns (with clients such as Subway) that link the Web to mobile.

INSIDE INNOVATION

The MMF event also recognized companies and campaigns pushing the envelope and spearheading mobile adoption. The MMA received hundreds of submissions in 12 categories from companies across the globe and winners for the Fifth Annual Global Mobile Marketing Awards were selected by the MMA Awards Selection Committee, a body comprised of global industry leaders from wireless carriers, technology and content providers, agencies and industry publications.

I had the honor of sitting on the panel of judges, a privilege that gave me a first-hand look at the campaigns. The campaigns that were real eye-openers for me in terms of real ROI and creative excellence came from agencies such as: Mobile Dreams Factory (Mini Mobile Dealer), AKQA (Gap Style Mixer), F.biz (Trident Fresh) MyThum (Rogers/Live Nation live ticketing solution) and the Pizza Hut iPhone App from Pizza Hut.

My takeaway: We kicked off the MMF event asking ourselves if 2009 was the “year of mobile” – again. Maybe not. But 2010 is going to be an adventure.  With budgets coming back, mobile showing up on marketing budgets and the advance of smartphones, the stars are aligned for 2010 to (finally) be the year of mobile is 2010. With the stars aligned it’s up to the industry to deliver – with solutions that scale and turnkey cross-media strategies with mobile at their core.

Editor’s note: Matthew Snyder is CEO and Founder of ADObjects-Inc, a cross-media strategic consultancy focused on revenue-generating, customer acquisition, brand building and business development solutions for clients determined to make the most out of mobile. Clients/Partners include: Bing, CBS Radio, Canadian Music Week, Nokia and Mobility Ventures, as well as a variety of media companies and major brands. During his career at Nokia, where he held a number of positions including Device Program Manager and Global Director of Strategy in the Multimedia Group, he architected Nokia location-based services strategy and mobile search application. MSearchGroove is proud to be an associate of ADObjects, joining a vibrant team of professionals including Chetan Sharma, Founder and President of Chetan Sharma Consulting, a management consulting and strategic advisory firm, and Roman Kikta, a renowned venture capitalist, wireless pioneer, seasoned entrepreneur and author. Feel free to contact Matthew directly (matt@adostrategies.com) or follow him on Twitter (matsnyder2001).

These are just some of the key questions that came up during interviews with ad network executives at Mobile World Congress (MWC), and in a string of recent phone briefings. It’s also a line of questioning I hope to pursue at ThinkMobile, and Meet the Mobile Ad Networks, a panel led by Steve Smith with guest speakers Steven Rosenblatt, VP of Advertising Sales, Quattro Wireless; Eric Eller, Senior Vice President, Client Solutions, Millennial Media;  Patricia Clark, Regional VP of Sales, 4INFO; Paran Johar, CMO, JumpTap; Brian Murphy, Eastern Regional Sales Director, AdMob; and Robert Walczak, CEO & Founder, Ringleader Digital. It’s going to be a great session, and I’ll be back with my observations after the event.

BTW: Steve is a must-read columnist at MediaPost. Yesterday’s post, which recounts an experiment (a random click through mobile ads) and the user experience (disappointing and even frustrating), should be mandatory reading at ad agencies and networks everywhere. A key takeaway: “The system still is clogged with some crap even at branded media sites. Of course there are still dancing mortgage celebrants on CNN’s homepage, so we can’t fault mobile too much. But clicking on a mobile ad is an iffy thing. Mobile users don’t know yet what to expect, so if the publishing brand can ensure quality advertisers with quality end-user experiences, it elevates both the ads and the content.”

Steve’s column and my own observations lead me back to the key questions: How do the dedicated mobile ad networks fit in the game, and how will they differentiate? I caught up with Zaw Thet, CEO of 4INFO, the 800-pound gorilla of mobile messaging, and the company that Nielsen identified as the largest SMS content provider in North America for 4Q2008, to get the inside track on AdHaven (a new product 4INFO launched just prior to MWC that represents a rebranding of its entire suite of ad serving products) and where it fits into the roadmap.

By way of background, 4INFO’s strategy is about opening up its ad-serving technology to mobile operators and publishers to monetize their content with SMS text ads. The first step is AdHaven, a server that effectively provides publishers access to services including campaign management, ad sales and operations, and billing. Publishers can either sell their own ad inventory or go through 4INFO’s text ad network, which includes hundreds of premium publishers such as USA Today, Discovery Channel, MTV, E! Television Network, Evite, NBC, Maxim, ImpreMedia.

(I asked Zaw if 4INFO is on course for a head-on collision with JumpTap, which also sharpened its focus on premium content and launched a Premium Ad Network. His response: 4INFO has just launched with CBS and AOL, so there is some overlap in the strategy to focus on premium content. But there is no competition. “JumpTap is going after pure mobile Web traffic; we’re going after the traffic that is being created from SMS. It’s a fine distinction, but an important one.”)

The focus is on SMS (publishers can also choose from mobile ad formats such as click-to-call, click-to-video and click-to-the Web for text campaigns) but Zaw tells me “we’ll see AdHaven start to introduce other capabilities in the near future, where we’re [4INFO] not only serving ads in SMS, but we’re also helping publishers drive [traffic] from SMS content to WAP content, and then serve ads in those WAP content links as well.” To date the first commercial deployment of AdHaven is with VeriSign’s Messaging and Mobile Media division, a provider of SMS connectivity to more than 3 billion wireless subscribers, and its customers which include many leading corporate brands. Participating publishers can either sell their own ad inventory or participate in the 4INFO SMS Advertising Network.

My take: If we recall that 4INFO struck a trial mobile content and advertising deal with Yahoo last year, then it’s clear 4INFO is undergoing an exciting transformation that will ensure the company can compete with the major ad networks – if it decides to. But for the moment at least, the focus at 4INFO is on premium content and ways to deliver a consistent ad message across SMS and WAP content.

An excerpt from the Q&A:

Q: Let’s start with a high-level view of AdHaven and how it fits in.

A: The way that we really think about it [AdHaven] is it’s kind of like a Double-Click for SMS. But it does more than just SMS and I’ll get to that in a second. Previously, our ad-serving [offer] was only available if you were a publisher that used 4INFO connectivity. By that I mean,  in addition to your ad-serving solution, we were also your publishing platform that connected you to the carriers. Now, no matter where you are or the country you’re in, you can use AdHaven [for international reach] because 4INFO doesn’t currently support other carriers outside of the U.S. So that’s the big thing.

Q: What is the connection with VeriSign? They acquired a messaging company called m-Qube and I can imagine that they need a platform for their customers. Is there overlap or even competition?

A: For all of their [VeriSign] customers that don’t use the 4INFO platform and are using their [VeriSign's] aggregation tools, now all of those customers will have access to our ad-serving capabilities as well. We’re not in competition with the aggregators, so we’ll provide messaging when people want it, but we don’t ever see us getting into the aggregation business. VeriSign’s customers have certain sorts of enterprise requirements that, as part of the free public service from 4INFO, they may or may not receive. And so there’s always different levels of [service] that customers are looking to have. We have our own 4INFO traffic, but that’s a consumer-facing application. it’s not something that’s competitive to VeriSign’s enterprise messaging offering.

We don’t do interactive TV and voting and polling for large things like American Idol, because we’re just not set up to handle that as whereas VeriSign is. So now it means that those customers that have high bandwidth click-through requirements, with hundreds of millions of votes coming in, can now use these same sets of tools.

Q: So now you can go out to a company like SinglePoint, for example?

A: Yes, a company like that would be a customer for us.

Q: What else can you offer now that you have taken the wraps of AdHaven? Is it just about SMS?

A: You’ll see AdHaven start to actually introduce other capabilities in the near future where we’re not only serving ads in SMS, but  also helping publishers drive from SMS content to WAP content and then serve ads in those WAP content links as well.

Q: That’s where the ad networks are. Are you competing with them?

A: We’re not trying to be competitive with AdMob or Quattro or any of those guys. What we’re focusing on is being able to create more WAP traffic from our in-mobile web traffic, from our SMS traffic using AdHaven, and then being able to deliver a consistent advertising message in the SMS content and then the WAP content as well.

Q: I know from our past conversations that you understand the importance of targeting and relevancy. What are you doing about it?

A: Yes, we’re doing a lot in that direction. We’re a little bit careful of exactly what we disclose about our targeting algorithms; just given the competitive nature of the business. But I can say that if you look at where we’ve come from – from a standard ad-server that does campaign reporting – we can say we are ready to really start looking at behavioral type targeting. It has come a long way in the course of the last 6 months, and so have we.

Q: So it sounds imminent. Are you going to let me in on it?

A: Absolutely! When I’m ready to tell, you’ll be the first person I call.

Q: I’ll take you up on that one. While we’re on the topic of targeting and relevancy, I’m seeing less of an emphasis on mobile search, the capability that we thought was a pre-requisite for all this. The scenario was: You get the clues from the queries and deliver relevant ads. Now JumpTap is first and foremost an ad network, and other search companies have likewise changed their focus – and you didn’t mention it once in our interview…

A: The market is growing up. If we look at it from a JumpTap perspective; we see a carrier-centered model, one that I didn’t necessarily believe in. I definitely believe in the people in that company [JumpTap] and their focus on the advertising business. We [at 4INFO] are still big believers in the viability of search for consumers via free and open SMS and WAP and other methods, but we also understand that this is a point where mobile advertising is going to be a core piece of whatever comes out of search. We definitely still have our search business. We definitely still have our consumer-facing business. But, at the same time, you’ve got to make money, and we’re focused on making sure that we’re not only the leaders in search, but also the leaders in mobile media and technology; which I think search is a subset of.

Q: So it’s also ensuring growth through a more open approach?

A: Yes. Consumers are still absolutely able to use 4INFO for all the different services that you’ve seen before. Now the only difference is we don’t just do advertising of our own services. We provide advertising services for a huge number of different publishers; whether they are search or content or other types of alerts.

Q: Speaking of publishers, I see a strong focus on premium content publishers. Can you update me on how this is progressing?

A: We have a self-service platform for small publishers. and that’s our opened-up 4INFO.net.

For us though, we’re more interested in the short tail of premium publishers, high-quality content, and that’s what we focused our network on – not the more self-service, less interesting publishers. We just launched AOL and CBS on our network, and you don’t get much more premium than AOL or CBS.

Q: Of course, other companies are focused on premium content and publishers. I’m thinking here of JumpTap and its new Premium Ad Network…

A: There’s going to be competition for premium content. I’m [we're] not competitive with JumpTap. We are not looking to just take all of their run-of-the-mill mobile Web traffic. What we want to do is when a customer gets an SMS message and then clicks on a piece of content in that message to go to the mobile Web or video, then we’re creating that inventory – we’re creating new WAP inventory or mobile Web inventory and then we’re delivering a consistent advertising experience from the SMS message to the WAP message.

What you don’t want to have happen is:  Honda buys the SMS message and then sees Toyota on the WAP site where they’re directly trying to target that user. So it’s not competitive to what JumpTap is doing. They’re going after pure mobile Web traffic. We’re going after the traffic that’s being created; that we’re creating from SMS. It’s a fine distinction, but it’s an important one.

Q: What are some of the numbers? Nielsen named you the number one in SMS messaging, and your press release says: “The 4INFO advertising network of over 16 million users is ad-supported, with 4INFO customizing targeted, interactive SMS, WAP, and mobile video campaigns on behalf of its advertising partners and publishers. 4INFO delivers over eighty million real-time, user-requested answers and alerts via text message per month.” What can you add?

A: This year we’ll send over 2 billion SMS messages. We also will create from that SMS traffic, a little over 2 billion WAP impressions and video and mobile web impressions. So from there, we’ve grown into a pretty big network.

Q: A while back the discussion was that all this messaging is effectively costing more than it is bringing in…

A: No, not at all. We have fixed rate costs for all of our messaging services. Obviously, there’s no ad-serving. We don’t license any technology… all of this is built in-house. So no, the reality is if you understand our business, you understand it’s a business with huge operating leverage and stability to be a 60-70 percent gross margin-type company.

Q: What about the advertising experience. I have spoken with Taptu, a mobile search company that is thinking about the Touch Web and the new forms of advertising it enables. So it’s not just going to be text going forward. Again, the iPhone changes everything – including advertising. Does this present a challenge?

A: No, our belief in mobile advertising is that it’s delivering the best consumer experience possible. So if you’re on an iPhone or on a smartphone and you can get rich media video, then we’ll absolutely deliver that to you. And I talked a little about how AdHaven is going to be not just including SMS advertising, but also helping publishers drive WAP content from mobile Web content or iPhone content from that SMS content, and then serving ads there as well. So we see the better that phones get; the more interactive they get; the richer media they get, the easier it will be for us to then deliver sites in motion for our advertisers. So we’re all for smartphones and, as we continue to adapt with the markets, you’ll see us do more with rich media in the U.S. and less internationally where it’s less prevalent.

Q: What is the competitive landscape out there shaping up like? I know of a lot of other companies that insert ads into text, for example.

A: I think there’s going to be some companies coming out there and hey, let them come. The more in the market, the better the experience we’re all going to have. We think of ourselves as the 800-pound gorilla in the SMS space, and we think we’ll be the 800-pound gorilla in the mobile advertising space and that’s where we’re headed. But the more people that are educated in the market that are in the market, the better. There’s not just room for one person.

Q: What are the drivers? In Europe we see that companies like Blyk don’t just offer ads for free minutes, they have harnessed SMS to start brand conversations…

A: Europe has primarily a premium model and I think there’s now a place; now that the advertising market has matured to the point where the large U.S. advertisers and agencies that have global reach understand how to use mobile advertising better. We’ve got over 200 brands that ran on the platform in 2008.I think you’ll start to see more of that in Europe, which is why we’re releasing AdHaven for international so that there can be a mix of that premium and free model; a mix of that giving away free mobile marketing content for a subsidy model. And we’ll bring all of our large agency partners and brand partners in the U.S. over to some of the existing European and Asian operations.

The valuable primer walks us through the opportunities and challenges for mobile operators, marketers and portals/publishers. The document takes a balanced view, reminding mobile operators that they are “ideally positioned to provide their customers with search tools” and outlining the options they can chose from to offer mobile search services. However, I miss a discussion of the pivotal importance of brand (for mobile operators) and reasons why mobile operators should employ all mobile search tools/services at their disposal – as long as they brand the most valuable piece of real estate: The mobile search results page. (I believe this control is a critical component of an effective mobile search strategy, a topic I address in my analysis of what’s really at stake in the Verizon-Google deal in another post later today.)

The section of the white paper on mobile search business cases is particularly valuable. A case study from JumpTap, for example, tells us how intelligent search increased ROI for Sega Mobile. In the first month of the campaign (no details on where/when etc…), Sega reported a 9 percent CTR, and 7 percent of these clicks resulted in a sale. The bottom line: Sega tallied up its sales and divided that by the total amount spent on buying keywords to calculate a 320 percent ROI. After re-running the campaign with new keywords, Sega saw a 530 percent ROI in the second month and 11 percent of clicks resulted in a sale. Not so much stellar figures – but a confirmation that success in mobile  should be measured in quality and quantity.

The case study from Medio Systems stresses the importance of keyword advertising, and illustrates how the right choices can generate high-quality leads and high conversion.

By way of background, 4INFO, a mobile search and advertising company that operates a mobile alert service delivering up-to-date information on sports, news, movies, etc… purchased advertising on Medio’s MobileNow search network targeting keywords and keyword categories. The outcome: “Initial results were extremely good; a 29 percent CTR and a 5 percent conversion rate. Simple but direct creatives such as NBA Score Alerts and NHL Live Updates compelled 29 percent of users to click on the ad, with 5 percent of these converting to subscribers.” 4INFO continues to advertise with Medio MobileNow.

My take: A helpful document for beginners – but not a roadmap. A bit thin on methodology. Nonetheless, it is a welcome primer and precisely what we need to get everyone on the same page and move this industry forward. You can download the white paper here.

Disclaimer: JumpTap is an MSG supporter.