Mobile advertising continues to be a good news/bad news story. And your view seems to depend on the news you want to hear.

November was a stellar month for mobile advertising. Google paid an eye- watering $750 million to acquire 3-year old AdMob, a Silicon Valley-based leader in display and iPhone ad formats. Google is not one to waste money, so you can imagine what a huge opportunity mobile advertising really is (even if the rest of the industry is blinded to it) if a Web giant is willing to pay almost $1 billion for a company with mobile expertise. I wonder if we won’t look back in two years and say it was steal…

At the end spectrum, there are always industry pessimists who ask when mobile advertising will finally be big business. However, I must also note (with a grin) that many of these nay-sayers are large publishers (can’t name names) who are 1) amazed by the tremendous traffic to their mobile Web destinations and 2) clueless about how they might harness mobile advertising and monetise these eyeballs.

And let’s not forget the mood among traditional media players. Doom and gloom everywhere you look: newspapers, direct mail, TV, radio, yellow pages, outdoor, magazines and PC Internet.

In fact, the BIA Financial Network (BIA), parent of the Kelsey Group, forecast spend on these media to decline to $144.4 billion by 2013 from $155 billion last year.  But there are winners among the losers. With budgets under pressure and advertisers beginning to demand far more tangible results, traditional media – such as print – is likely to be hit far harder.

Marketers have long realised this trend and increasingly turn their attention to online and new media channels. Against this backdrop, online commands an ever-increasing share of spend. BIA has forecast the new media share globally to grow from around 9 percent today to over 22 percent by 2013. Moreover, a recent study from Pricewaterhouse Coopers (PwC) predicts by 2013 the new media share of advertising in the U.K. will be around 34 percent.

Clearly, the advertising market is going to shrink and see a substitution of spend. It’s a trend that squeezes traditional media and spells opportunity for companies that either play in new media or migrate value to their online assets. Thus, your chances of survival are a measure of your willingness to rethink your media business models and refocus your operating principles.

MOBILE MATTERS

The media futurist Jeffrey Cole points out that the biggest challenge companies face is their own reliance on traditional advertising models. “The problem [is] people often believe there is enough life left in the ‘old advertising model.’” While many companies are still waiting for traditional advertising techniques to deliver, Jeffrey is convinced that the “big breakthroughs will be digital advertising developed by those who grew up their entire life with digital media.”

If Jeffrey is correct, and I believe he is, then mobile – a personal medium digital natives regard as an extension of themselves – is where we will see the meaningful innovation and positive business results.

Indeed, mobile continues to be the bright spot in a raft of recent industry reports. Then market outlook is even more buoyant when it comes to advertising approaches that successfully combine location and promotion.

The Kelsey Group, a research firm specialised in location-based services, expects mobile local advertising revenue alone to reach more than $3.1 billion by 2013, up from just $160 million in 2008. Meanwhile, Gartner forecasts total spending on mobile advertising to grow to $7.5 billion in 2012, up from $530.2 million in 2008.

Connect the dots in these reports, and mobile advertising revenues could outstrip anything that has gone before, making mobile one of the fastest growing advertising channels of all time. A remarkable feat when you consider that the overall advertising industry (traditional and online) will continue its decline. No wonder Google was so keen to snap up AdMob and stake its turf.

WHY WILL MOBILE GROW

In a word, mobile is different. While other media may be limited to a time or context in our daily routines (print in the morning when we read the newspaper on the train and TV when we get home in the evening), mobile is a 24/7 channel directly to us.

Look at it this way and mobile ticks so many marketing boxes that you ignore it at your peril.

• Mobile is a life-line for the 18 to 30- year old demographic, a very attractive demographic to marketers and notoriously difficult to reach.
• Mobile is a personal device and rarely shared, making one-to-one marketing a real possibility.
• Mobile is present at the point of purchase, providing marketers a channel to influence people’s brand choice and encourage the all-important impulse buy.
• Mobile is measurable, allowing marketers insights into campaign performance and their ROI.

However, for most brands and media owners, mobile remains one of the great untapped channels.

WHO WILL “GET” IT?

Not everyone is blind to the tremendous opportunities at the intersection of local information and advertising approaches. In fact, there is a staggering number of players across the ecosystem jockeying for a lead position. At one end of the spectrum you have the search engines and platforms: Taptu, MCN, Google, Yahoo, and Microsoft, just to name a few. At the other end, you have dozens of directory publishers (Yell, Pagine Gialle, Pages Jaunes, etc.). And let’s not forget the social networks, media owners, verticals, handset manufacturers and mobile operators all lining up for a slice of the action.

The market is crowded. But, if companies continue with their current approaches, then a shake-out is imminent.

To be clear, only a handful of mobile players have what it takes to be highly successful. The barriers to entry, the complexities of the mobile channel and challenges of distribution and discovery make this a game for deep-pocketed players. But other companies have an equal chance (even if they don’t have equal budgets) if they use mobile in a smart and meaningful way to deliver real value to the consumer.

WHAT WILL MAKE A WINNER?

The winners will be the companies that have much more than content (such as local listings, for example). It will be those players that have the capabilities mix to deliver mobile consumers a contextual, relevant and tailored offering. This presupposes the know-how to deliver to the device capabilities, provide consumers the features they expect, enhance location information, support social and viral distribution and add value through marketing and advertising.

It may sound simple, but why are so many companies still getting it wrong?

In my view, they lack focus and an understanding of the mobile channel.

In contrast, companies succeeding in mobile are those players that have recognised the gaps in their knowledge of new media and brought in professionals that do. (Even better if these professionals are themselves digital natives with an instinctive grasp of mobile and its impact on every aspect of our daily lives.)

Leading digital agencies such as AKQA and Ogilvy, and progressive media owners including the BBC and Sky have long had dedicated mobile teams in place. Now other companies are following their lead, dedicating more resources to mobile or buying in skills as they need them (either because they believe in the true potential of mobile or because they have been pushed into mobile by brands who understand how important it is to engage with consumers on their personal device).

If you doubt that mobile demands experts with a different skills set, then consider the real reason Google acquired AdMob: it’s easier (and cheaper) to buy skilled people than make the investments and risk missing the mobile advertising opportunity altogether.

While many agencies and media companies have a long way to go (and a lot to lose), it is encouraging to see so many brands moving full-steam into mobile and reaping real benefits. The list of successful campaigns is impressive: Guinness with its ‘Passport to greatness’ campaign, British Airways with its ‘Mobile check-in’, HSBC with its ‘Business banking’, Sky with its ‘Remote record’, the BBC with ‘BBC mobile’ and the New York Times with their NY Times iPhone app. It is interesting to note that all these companies have dedicated teams or experienced agencies that understand usability and what makes mobile different. Even if these brands appear to experiment or treat mobile as a separate business, they are serious about mobile’s position as part of the digital marketing mix.

WHERE ARE THE LOCAL CONTENT OWNERS?

Brands are leading (not all – but we have more solid case studies than last year), agencies are learning and everyone else is at least talking.
So, where are the director publishers? They are the only players with content and vast experience in traditional advertising who have yet to make the most out of their digital assets. They should have a natural edge over their competitors, but, as I pointed out in my last column for MSG, they are leaving money on the table.

Indeed, directory publishers are best placed to deliver compelling local mobile services and – importantly – commercialise them through advertising. After all, they have existing customers and a powerful sales force to sell advertising products.

It appears that directory publishers are so focused on the business challenge that they can’t see the opportunity mobile represents. This, unfortunately, leave the  door wide open to Google & Co, companies that “get” mobile and understand the value of listings.

WHAT DO THEY NEED?

To close this gap directory publishers must stop thinking of mobile as a technology and understand it is a utility. The mobile device has evolved into a multifunctional tool. It is our social organiser, our information resource, our boredom filler. Basically, it supports our lives. Directory publishers have content that is a perfect fit provided they also plug it into the equation to simply or enhance our daily routine.

Directory publishers must also acknowledge that mobile comes with a whole set of new rules. Granted, the industry has yet to figure out these rules, but borrowing ideas and approaches from traditional media will not work. A good starting point is to answer three core questions: how are you going to approach mobile?; why is your offer relevant?; and what do you expect a consumer to do?

My takeaway: As a marketing medium mobile is only set to grow in value. Providers that get the basics right and forge partnerships that allow them to unlock the potential of mobile, monetise their digital assets and deliver features that add value to our lives will be well-equipped to compete against rivals and win.

Editor’s note: Martin’s next column will focus on what companies (specifically, local media and directory publishers) should to deliver contextually relevant mobile advertising based on location.

Martin Wilson has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including leading advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of six mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102).

I am pleased to report this work has also sparked interest at Eyefor Travel Research, a business intelligence firm known as the “leading voice of online travel.” Andrew Merrie, research analyst and Headmaster of the School for Mobile (the firm’s initiative for educating the travel and tourism industries on opportunities in mobile), reached out to me earlier today to collaborate on the firm’s series of free reports (which are essential reads chock-full of case studies, key statistics, and best practice) focused on mobile technology and solutions.

There is a special emphasis on mobile search (which we agree is the linchpin of a range of effective strategies to deliver mobile advertising, commerce, and CRM). By way of background, the Eyefor Travel report series consists of Vol.1 Mobile Technology in  Travel: The Introduction, and  Vol 2,  Mobile Technology in Travel Report: The Detail. Vol 3  Mobile Technology in Travel Report: Consumer Insight is work in progress, but you can sign up here for an alert when it is released later in June.

A trend that stands out is the new popularity of SMS search schemes as a sure-fire way to reach a mass market. As Andrew puts it: “SMS search is a tool that 99 percent of customers know how to use. In a consumer-focused industry such as ours, it [SMS search] represents a good first step in how companies need to move forward.” Another advantage beyond intuitive usability: Proven monetization models around the delivery of related text links and advertising.

This point came through loud and clear in this week’s AdAge article, which outlines the advantages of SMS search, and takes a look at the companies (notably 4INFO, which MSG profiled here, and ChaCha) cashing in on its newfound popularity among users and advertisers.

Rita Chang, who wrote the piece, contacted me for the article, and has since arranged a follow-up call to discuss the mobile search competitive landscape. The intention is to write a comprehensive feature on the models and companies I think set the bar. I gladly support her in this work, and welcome other journalists to reach out to me for comments or just a few company contacts.

The increasing excitement around SMS search isn’t limited to the U.S. (the focus of Rita’s AdAge article). It’s also going full-steam in Asia, where Mobile Content Networks (MCN) – a provider of mobile search and revenue solutions that deliver people connections to content, not links to content, on their mobile phones – has chalked up an impressive list of operator customers for its SMS search, which emphasizes content discovery instead of answers to specific search queries.

Today marks the company’s official launch of Smart Search (aptly named) in partnership with Smart Communications, the Philippines’ leading mobile operator with 36.9 million subscribers. The MCN-powered search service (an SMS triggered search service that lets people use a shortcode to text queries for their favorite downloadable music) complements MCN’s WAP search solution for the SMART Music Store, which launched in 2008 and offers subscribers real-time access to a growing catalog of ringtones and music tracks from local content providers.

Stephen Burke, MCN SVP Sales and Marketing, who pre-briefed me on the news announcement yesterday, also kindly agreed to a spontaneous Skype chat interview to connect the dots in MCN’s evolving search strategy. I produce an excerpt of it below, and will circle back for a more in-depth discussion once MCN formally announces a key customer win later in the summer.

Q: The news is Smart Search. What else is in the pipeline?

A: We will also be adding new WAP and SMS content channels with Smart this month and next, and are seeing steady and healthy traffic growth.

Q: What can you share about traffic and usage?

A: For the Smart WAP Music search, we have seen page views and queries double in the second quarter calendar. We add [the content categories] Games in mid-June and Video in late June, which is projected to increase traffic about 3x.

Q: SMS activity?

A: SMS Search [is] reaching all the non-WAP users in the world’s most active SMS market.We will be ramping advertising in Q3. In emerging markets, the first step is to help build the Mobile Ad ecosystem, which is happening now.

Q: Do they [Smart mobile operator] use allwords [MCN's own PPC mobile content promotion program]?

A: No, not yet. The Philippines’ carrier revshare/ecosystem issues aren’t quite in place yet.

Q: And what can you report elsewhere across your partners/customers?

A: AIS in Thailand, FYI has also tripled traffic as they’ve added our Search to almost every page on the portal in their preparations to launch 3G services. These “emerging markets” are catching fire. Basically, we are seeing growth in all markets (Scandinavia, Turkey, Thailand, Philippines, Japan, etc).

Q: SMS search is certainly on the upswing.

A: In markets where WAP penetration/3G penetration is still lower (than Europe or U.S. or Japan), a transaction oriented, content and personalization oriented SMS service is an important addition. And it’s [SMS search] being specced into RFPs we are seeing elsewhere in S. Asia and Latin America.

My take: SMS search is a case of been-there-done-that? No way! It may be a rather un-sexy category of mobile search, but there is nothing unexciting about the demand for it across markets (and the increasing interest among advertisers). Indeed, comScore reports that SMS ads average a 16 percent response rate, outperforming typical 1-3 percent click-through rates for mobile display ads. While we may be enamored of the iPhone and the pivotal role this device has played in shifting mobile models (and the complete mobile business ecosystem) in the direction of mobile computing (as opposed to mobile communications), we should remember that the mobile device is about connecting us to the people and stuff (information, answers, content, and advertising – because it is content) that matters to us most. What works is what works. As Alex Meisl – Chairman of Sponge, a mobile marketing agency, and Co-Chair of the Mobile Marketing Association – pointed out in a phone interview yesterday, he is not bullish about bells and whistles in mobile. Most of his company’s campaigns harness text and messaging mechanisms people understand. Another advantage of text is the dialog it encourages between people and brands. This level of interaction can also bring a new dimension to mobile search, turning a search query into much more of a search conversation we can all understand.

Disclaimer: ChaCha has sponsored an MSG white paper; MCN has been an MSG supporter.

Since teaming up with Rudy De Waele, blogger at mTrends and  dotopen founder, to develop mobile search case studies in preparation for a workshop on Mobile Search Future Prospects organized by JRC IPTS (Institute for Prospective Technological Studies of the European Commission), and seeing the positive response to our work to date, I’m convinced mobile search is back again at the top of the industry agenda. And with good reason: Search is the de facto interface to all things digital in the online space, and there is every indication that it will be the same in mobile.

From mobile advertising, where our queries trigger the delivery of related advertising (in the best case scenario, we’re not there yet), to social media, where the content we appreciate and discuss across destinations ranging from MySpace to Twitter allows us to restore balance in an otherwise purely algorithmic approach that tends to promote search engine optimized websites over what we find genuinely relevant and useful, mobile search is where the action is.

But as Rudy and I have both pointed out in our recent presentations, mobile search is not about the usual suspects (Google, Yahoo, and Microsoft). Rudy spoke at Next09, and you can find his slides  further on in this post; I spoke at the European Mobile Media Conference, and my deck can likewise be found after the jump.

Indeed, context and personalization change all the rules (!)

A highlight of our recent presentations: A comprehensive overview of the market and (thanks to Rudy) a SWOT analysis of the players that stand out in their category such as Google (universal search with a poor mobile offer and an even weaker grasp of social search), and Twitter (a case of mobile search + social media = real-time results that really reflect what we discuss/share).

In my own mobile search research – an on-going project that began back in 2004/2005 when I wrote the first report on mobile search and content discovery, a 220+ page report published by Informa Telecoms & Media – I have recently identified some 60+ companies and 10+ categories of mobile search I would like to share with you (below) for your feedback.

INTERACE

• Text: ChaCha, 4INFO,MINFO, textperts (acquired by 118118), Answers.com, AnyQuestionAnswered, Ask, AskMeNow
• Voice: Google, Yahoo, Vlingo, Microsoft, ChaCha (Watch this space for an expert assessment of the voice-enabled services offered by Google, Vlingo, and ChaCha. ( I am proud to have had the opportunity to collaborate with Peggy Albright, MSG Associate and founder of Albright Communications, and even prouder of the results.)
• Visual: IQ Engines, Kooaba, Mobile Acuity, Searchme, SnapNow, SnapTell, Tin Eye Mobile, Nokia
• Navigational: Boopsie, kannuu, Nuance (through Tegic acquisition)

ACTIONABLE

• Universal: Google, Yahoo, Microsoft, AOL (based on Google), Medio Systems, JumpTap (although a much stronger focus on mobile advertising)
• Federated: MCN, Motricity (managed mobile search platform providers)
• Operator-centric search: Amdocs, Qualcomm, IBM and this company coming out of stealth mode
• Alternative search: Defined as every service except for Google, and includes a long tail of 1500+ search engines (tracked by AltSearchEngines) with ambitions to go mobile – some sooner than later
• Vertical/content-specific search: abphone, vtap, Truveo
• Local search: Hundreds of players that offer local search via SMS services, on their own WAP sites, and/or as part of a nearby shopping scheme. (Fortunately, the local mobile search landscape is the topic of an upcoming column on MSG from Martin Wilson, founder of Indigo 102, an independent consultancy with a focus on mobile local search and services, so watch this space!)

SOCIAL

• abphone, ChaCha, Hiogi, Taptu
• Twitter in a class by itself!

It’s work in progress, but it’s all the more exciting if we remember that – in mobile search – the players that matter and the business models that deliver are wide open to discussion.

Indeed, the central role of mobile search in a wide variety of mobile services around sharing, advertising, location, and context-aware activities turns up the pressure on an even broader range of businesses (operators, brands, agencies, enablers – everyone!) to understand what mobile search delivers (and doesn’t) and the companies/models that do it best.

To help mobile professionals and practitioners navigate this tough terrain, Rudy and I have joined together on a project to produce the definitive mobile search market overview, a work that will draw from primary research, case studies, and exclusive forecasts to document this exciting space and present our recommendations for strategies to harness growth opportunities on the horizon.

I still have the opportunity to take your views and perspectives into account, and I would welcome your input. The project, widely distributed via our sites and via our network of sites, supporters, and influencers, will also offer a commercial opportunity to companies interested in conveying their value proposition to a growing community of senior executives and decision-makers in the mobile space.

If you are a mobile search company with an interest in being considered for an interview, please contact me directly or send an email to my assistant Andrea Henninge (andrea@msearchgroove.com).

I encourage you to add the site to your list of must-read destinations. Why? Many of the business models and businesses driving revenues in the Internet are coming soon to mobile. (Search engines and collaborative software companies lead the pack of companies moving out of stealth mode to make some serious waves.) Amidst this change I know of no better source than EContent to stay that extra-important step ahead of the game.

(I will therefore give EContent a top-notch spot in the new-look Knowledge Sharing Zone I wrote about in this earlier post. The goal is to create a comprehensive list of valuable resources and destinations. If you would like your site or blog to be considered, please email it to me (peggy@msearchgroove.com).

As part of the recent Buying and Selling eContent conference, Michelle invited experts and contributors who judged the EContent 100, to give their views on the companies and trends that matter. Michelle reports that the series of video interviews  got good reviews, and the content in them was “extremely well received.”

In Search of Excellence in Content Commerce, Creation, Delivery and CMS

with Tony Byrne, Ron Miller, and Martin White

Cutting Edge Success Stories in Collaboration, Social Media, and Mobile Content

featuring David Meerman Scott, Steve Smith, and Peggy Anne Salz

The Best In Content Collections, DRM, and Search

with Theresa Regli, Steve Sieck, and Paula Hane

Tune in and enjoy!

By way of background, I was chosen to judge the categories Mobile Content, Search Engine & Technologies, Collaboration and Social Media.

My participation in the judging team (of 14 judges) allowed me to introduce my peers to mobile industry innovators high on my radar and emphasize the role of mobile-only search and personalization companies in the scheme of things. As a result, this year saw four new (mobile) additions to the EContent100: ChangingWorlds, CrispWireless JumpTap, MCN and SurfKitchen. They join other movers and shakers that made the list including Apple, Facebook, Google, Microsoft, Nokia and Twitter.

If you want to be considered for inclusion in the next EContent 100, contact me directly. I’m always open to new companies and great ideas!

In the meantime, I’ll be back on Thursday with a wrap-up of mobile content issues, challenges and trends from the European Mobile Media Conference.

On the heels of JumpTap’s announcement of tapMatch, its pay-per-click (PPC) performance mobile ad marketplace, I can finally post this exclusive Q&A with Paran Johar, JumpTap CMO. During the pre-briefing, we went through the nuts and bolts of the offer (unlike Google, which offers keyword bidding  and MCN – a provider of mobile search management, search merchandising, and PPC content promotion solutions offering category bidding- Jumptap offers both), and took a closer look at how the search technology potentially maximizes performance by delivering contextually relevant advertising.

By way of background, tapMatch builds audience profiles from multiple sources including search queries, context, and click thru history to match the most relevant ad messages to each mobile consumer. Advertisers can target their marketing message according to keywords, categories, location, demographics, mobile carrier, publisher, and mobile handsets including Blackberry and iPhone. Ads run across a comprehensive set of categories including automotive, careers, finance, fitness, and health, enhanced by keyword search parameters. They are priced and served by auction, and advertisers only pay when consumers click on their messages.

JumpTap tells me it can decipher the keywords from mobile Web pages and use that information to create categories of users. For instance, in this chocolate example above, if the user has gone to a site about mobile phones and then another site comparing different mobile technologies, the system knows that a search for “chocolate” has a higher probability of meaning the mobile phone “chocolate” instead of something you eat. JumpTap can then place the correct advertiser ads in front of the user that relate to chocolate phones and not candy.

Q&A EXCERPT:

Q: Let’s start with the landscape. When I read the draft press release I thought it competes with Google at one level and MCN at another. What is the differentiation?

A: Well, that’s really the point. It’s not just a pay-per-click marketplace. It is a pay-per-click marketplace that allows advertisers to bid all the way to the keyword level. Smart advertisers understand that keyword level buying is the best way to target users. So this allows you to target context, and [target] carrier handset, all the way to the keyword level.

Q: How does your technology do it?

A: Our technology crawls the page, extracts the relevant keywords, builds a taxonomy based on those keywords, and then builds a preference set to develop an audience profile to serve a relevant ad.

Q: How does this fit in with the other products and announcements I’ve tracked on MSG? I’m thinking here of your white label search, your premium ad network – the works.

A: You mention the premium mobile ad network. Now this has been an evolution to our business model. We started with tapSearch, which is our white label search product. We evolved into the premium mobile ad network, which still exists and is really toward let’s say the upper funnel of mobile advertising to drive brand awareness, consideration, purchase intent. We’ve got our platform, tapLink, to extract data from carriers. This [tapMatch] is the last piece of the puzzle, utilizing our search technology to develop audience profiles in a pay-per-click marketplace. It [tapLink] addresses the ROI sensitive advertiser. So, if the premium mobile ad network is really focused on the upper funnel, tapMatch is really on the lower funnel -  driving ROI, whether that is click-through, click-to-action, click-to-SMS, or click-to-call.

Q: What about publishers?

It provides publishers with access to multiple resources for their inventory monetization. First, they can allocate a percentage of that [inventory] toward brand advertising – actually as much as possible to get those high effective CPMs. Second, they can take any remnant inventory and run it through tapMatch with full transparency and full control to make sure that they’re not running let’s say, punch the monkey ads. The advertiser also could control on the other side, what types of publishers they run on.

Q: Relevancy is a big part of your messaging here. Is this because you sense a change in what advertisers require? It used to be about showing an ad and now it’s about making sure the ad matches context somewhere along the way.

A: Yes. Our goal is not to run billions and billions of impressions. Our goal is to make an impression – with both the consumer and the advertiser – with relevancy. The mobile phone is a very personal channel. We think the appetite for a user to accept what I call ’spam advertising’ has really diminished, and that’s why we really focus on driving relevancy from all sources.

Q: What is the fit with iPhone?

A: Well certainly iPhone apps are part of both networks. An iPhone application developer is really like a publisher with much more dynamic abilities for creative insertion in terms of integration into maps, integration into address books, whatever. So absolutely, a publisher has the opportunity to participate in either or both [ad networks]. And they can allocate their inventory based on their choice.

Q: Of course there are a lot of ad networks out there. How are you going to continue to differentiate?

A: If you can name me another ad network with 17 carrier relationships and search as part of its technology, then we have competition. The only one I know that’s even close is obviously Google. Google and Yahoo we compete with. But the AdMobs and the Quattros of the world are in another space. If you just look at the ad network component of our business, then, yes, we compete, but they don’t have that white label search technology and they don’t have any of the carrier information either.

Q: That may be – but the space is crowding fast…

A: We organized a mobile advertising conference in Florida a couple of weeks ago on a Saturday night through Sunday. And we had almost 200 brands and agencies show up. I organized that and I reached out to our friends at AdMob and our friends at Quattro, and they participated as part of this mobile advertising conference. They are ad networks, and there is differentiation. We all know Quattro – they take a different approach which is ‘I’ll build your WAP site in exchange for the ad revenue’. AdMob takes the long-tail approach.

Ours is completely different. We have those carrier relationships. We’ve got the white label mobile search technology that builds relevancy, we’ve got the premium mobile ad network for the top funnel, and then we’ve got tapMatch, a performance marketplace that builds relevancy; that takes it all the way to the keyword level, utilizing hyper-targeting.

You can’t just go out and get 17 carrier relationships. You can’t just go out and build a white label search engine and utilize that technology for hyper-targeting. That kind of stuff takes years and years of development.

Q: What about the mobile analytics? What can I track and target?

A: It’s fully self-service. The app has tracking mechanisms so you can set up click-to-SMS, click-to-call, click through, and track all of that at the individual campaign level.

Q: And the difference with AdSense here?

A: Certainly AdSense is similar. However, they don’t do carrier targeting or handset targeting or context. So it takes AdSense specifically made for mobile to the next level.

Q: You have 17 carrier relationships. These include:  AT&T, Alltel, Boost, Virgin, US Cellular, Orange Spain, TeliaSonera Group (in seven countries), 3 Sweden and Bell Mobility. It’s a good mix, but I miss more operators in Europe and Asia.

A: We’re looking at the rest of Europe, and we’re obviously looking at parts of Asia. But we’re doing so very carefully. Given the economic times, excessive capital expenditure right now does not make sense. We have to look at those opportunistically to make sure it’s the right time. And you’re going to hear a big announcement for us in Spain in the coming weeks.

Q: Let’s talk about some hard numbers. In your press release you state: “Reaching qualified mobile audiences with highly targeted, relevant ads elicits strong consumer engagement, increased click thru rates and higher conversions according to early testers of the tool.” What is the range of CPCs you see?

A: It really depends on the category and the keyword. The more granular you get in terms of your keywords, the more expensive the bid price. And it’s dynamic and all in real-time. What are the keywords on Google or Yahoo? It depends on the keyword and it depends on the category, and it depends on the day and time. It could range from $0.10 to $0.25 in some cases to several dollars.

Q: Not a ball-park figure?

A: Peggy, it just depends on the keyword and the time of day. It’s almost like saying how much does a TV spot cost. It depends if you’re in prime-time; daytime; late news. And it’s similar here.

Q: Many will read today’s announcement as  throwing down the gauntlet, challenging Google and Yahoo. Is that how you see it?

A: Yes, definitely it’s a David verses Goliath story and we don’t mind being David. The fact that people reference Google and Yahoo in an on-going basis with JumpTap is a good thing for us.

Q: So let’s wrap up with some nuts and bolts. When are you live and in which countries?

A: We can give you a demo log-in – it goes live on the 15^th. It’s only the U.S. right now.

My take: Competition is heating up, but JumpTap’s connection with mobile operators (and access to valuable customer data that Google and Yahoo will never see) is the source of competitive advantage. JumpTap’s marketplace (category and keyword) and spread of networks (Premium Ad Network and now tapMatch) position it to offer a powerful combination of premium and performance advertising, going a long way toward ensuring the best ads will appear on a site. The technology is in place, now JumpTap has to focus on execution and slow but steady expansion of its operator footprint.

Overall, the report is a good read. It covers all the bases, from mobile ad revenue predictions to estimates for mobile search revenues, and it recounts the results of a road test (Google vs. Yahoo) to determine (literally) which provider is getting more bang for the buck when it comes to paid search.

Indeed, mobile search performance is at the top of my radar as Peggy Albright (founder of Albright Research, and MSG associate) and I have just wrapped up a white paper comparing mobile voice services available on the iPhone. More importantly, we have moved into the final phase of our Mobile Search Performance Report (MSPR), an industry-first quarterly report documenting the mobile search experience across a range of geographies, operators, and search engine providers, providing insight into the key performance metrics, such as click-distance and mobile advertising relevancy.

While I may have my issues with some of the Bernstein report findings, there’s no arguing the fact that Google controls a sizeable share of the U.S. mobile search market,  despite the fact the search giant consistently delivers a poorer user experience (an observation based on MSPR findings as well as those reported by Mobile Commerce during a recent Mobile Search Master Class).

Based on brand reach research (number of visitors to a search property divided by the estimated total of visitors ever to access the search category  in a month) and comScore estimates (as reported in September 2008), Bernstein Research reckons Google had 62 percent of the U.S. market in January 2009. Yahoo came in second with 30 percent, and Microsoft’s Windows Live finished third with 11 percent.

Listen to the podcast here. [19:21]

Against this backdrop, Bernstein estimates that mobile search revenues in the U.S. will grow from $20 million in 2008 to $910 million by end-2012. (Much lower than the numbers I’ve seen, so the truth must lie somewhere in the middle.) In contrast, mobile advertising revenues are set to skyrocket. Bernstein figures revenues will grow from $160 million in 2008 to $2.3 billion by end-2012. It further projects that global revenues will grow from $700 million in 2008 to $7.2 billion by end-2012.

But the real news is Google’s algorithm for success. Google’s strategy of “pulling through” users from its PC platform to mobile appears to be paying off big-time. Google is not only benefiting from user habit (users tend to visit the same brands and destinations they know from the PC Internet, with Google leading the pack); it’s able to keep all the cash from paid search advertising. As the report points out: “Google has not made to our knowledge any agreement to split revenues with the carriers. Google is possibly also gambling upon intensifying carrier competition and a favorable political climate to drive through de facto ‘wireless net neutrality’ and avoid splitting its revenues with the carriers altogether.” (Think it through. It’s an outspoken observation – and possible outcome – that should have alarm bells ringing in carrier boardrooms…)

At the other end of the spectrum, Yahoo and Microsoft focus on paid default placement (a strategy of negotiating to have their search engine app pre-loaded on the mobile deck so it is available as the default). Unlike Google, the search engines split their paid search advertising revenues with their mobile operator partners. (Yahoo with AT&T and T-Mobile and Microsoft with Verizon.) It’s a strategy to which I give high marks because it potentially encourages a more robust and healthier business ecosystem. However, Bernstein doesn’t seem to share my long-term view. It focuses on the here and now, concluding that Google’s strategy of winner-takes-all “will result in significantly higher margins” than Yahoo and Microsoft.

But a closer look (and an excellent podcast with Jeffrey) reveals good reasons to watch Yahoo over the next months. Vast improvements to mobile search and an exciting set of mobile apps are a boost to Yahoo’s popularity and potential for growth. (More on my take after I hear back on my request for an in-depth briefing to connect the dots in the raft of recent announcements, so watch this space.) Bernstein thinks Yahoo has “already overtaken Google.” The challenge now is to “translate this gain into superior financial performance with advertisers.”

As Jeffrey put it in the podcast:  “To Yahoo’s credit; Yahoo has improved enormously in mobile search recently. And clearly, its applications are resonating more with users. Now that may ultimately translate down the line into a more favorable share, so possibly, going with Yahoo might end up being a good strategy provided Yahoo can keep its momentum going and keep improving. Probably at this minute, it seems that the worst choice for the carriers would be to go with Microsoft, which is where Verizon has gone.”

Among the highlights:

GOOGLE WINS?: Sure seems that way. As Jeffrey puts it: “Even though competitors have preferential placement through deals, and even though competitors may have apps that consumers say they prefer, Google’s still winning.” Why? Brand reach is a big part of it. “What we’re seeing with Google is: That without compelling people in any way – you don’t have to sign up a contract to use Google, you don’t have to pay Google anything, you just use it if you prefer it -  people, in 60 percent of the cases, will just elect to use Google.”

VODAFONE & YAHOO: “After analysis and results, and we’re doing some more user surveys at the minute which we think will probably confirm [our view]: Vodafone might actually be wasting their money.” Drilling down a bit more Jeffrey says “Vodafone might not be wasting money in the sense that they’re doing a deal with Yahoo, it just that they probably could have done better with Google had they selected Google under very similar terms.” (A tall order indeed if we consider Google doesn’t split paid search revenue. (I later asked Jeffrey to look at it from the operator perspective. Does it pay to give it all to Google? Listen in and let me know what you think.)

ANDROID: It’s a fail as far as Jeffrey is concerned. The bad news: The apparent collapse of the Android Alliance and the surprisingly low brand reach of Google among G-1 users have dealt a tough blow to Android. The good news: It doesn’t seem to matter. “Android strategy doesn’t seem to have been a success, but it hasn’t hampered Google’s outcome.” The pull-though strategy – picking up users who repeat their PC behavior on their mobile phones – has paid off.  We should keep in mind Jeffrey is talking about the trend in the U.S.  No doubt users in emerging markets that have leapfrogged the PC altogether are likely to be a little harder for Google to simply “pull through.” What’s more, MCN tells me user preference in Japan and much of Asia favors content and commerce over search results.

OPENNESS & OPERATORS: “I think it boils down to the control mindset with the operators. The operators need to feel control, and it depends whether you would accept a lesser degree of control and a lot more money, or you want a higher degree of control and get nothing.”

My take: It depends on where you are in the value chain. For investors, it’s enough to know Google’s paid search pays dividends. But the mobile search road test Bernstein uses to determine the effectiveness of paid search strategies employed by Google and Yahoo also highlights an important factor that could play in Yahoo’s favor as more people do more with their mobile phones.

By way of background, Bernstein road tests Google’s approach (giving prominent placement to ads) and – based on the Google Ad Traffic Estimator – estimates what the advertiser had to pay Google for the top-notch spot. Yahoo, on the other hand, has organized its apps into a carousel that gets high marks on user experience, but makes it tougher to show ads.

Read between the lines, and this criticism may actually hold the essence of Yahoo’s longer term competitive advantage. Its paid search strategy correctly tends to emphasize the quality of the user experience over the quantity of paid search ads that could be delivered. As the report points out: Yahoo favors delivering a good user experience over “overt monetization via display ads.”

But is that really a shortcoming? Doesn’t delivering a better user experience ultimately solve the monetization issue? A better user experience means more users, more searches and more opportunities for brands and mobile advertisers.

And let’s examine the premise that the end-game is about displaying ads at the top of the results list. Many companies – including those that support Every Single One Of Us – are beginning to question the fit between PC advertising methods and our intensely personal mobile devices (and the metrics we use to measure their success/failure).

User experience or prominent placement? Which makes for a more sustainable business model over time? The jury is out on this one – so please share your ideas and insights.

Disclaimer: MSG has been chosen to undertake the Mobile Advertising U.K. research project on behalf of Every Single One Of Us; MSG is an Every Single One Of Us Collaborator. MCN has been an MSG supporter.

A major advantage to writing the Netsize Guide 2009 was the opportunity it provided me to connect with 34 C-Level executives for no holds barred interviews to discuss the opportunities/threats/trends highest on their radar. My interview with Mauro Montanaro, CEO Fox Mobile, was more than your typical Q&A; it was an invigorating exchange that we have pledged to continue on a regular basis. The reason: We understand the pivotal importance of mobile search, content discovery, and recommendation in all content-selling strategies moving forward.

It was a trend I picked up on a few years back when I watched the stellar rise of Schibsted, a Norwegian content provider that offered mobile search to help users find and buy its content (and that of its partner content companies) with the help of a solution from FAST, now a Microsoft company. Back then the mobile search industry focused its efforts squarely on winning mobile operators; a perfect fit with content providers (who own the content and need mobile search – as well as discovery and recommendation – to merchandize it) wasn’t a topic.

Fast forward, and mobile content companies are beginning to understand the benefits of mobile search and, more importantly, search merchandising. Why? Because simple Retail 101 tells us customers can’t buy what they cannot find, and, with operator portals on the way out, D2C destinations can best bubble their content offers up to the surface if they are findable in the first place. Paid search schemes round out the model, allowing content providers to monetize their traffic (which can be considerable for large brands, a major reason why so many of them are beefing up their mobile search/paid search strategies).

Which brings us to this week’s news that Fox Mobile (more specifically Fox Mobile Distribution’s consumer brand sites Jamba and Jamster content sites) has sealed a deal with MCN, a provider of search management, search merchandising, and PPC vertical paid search programs. The service will initially launch with the search results of carriers in Thailand and Sweden, and will later extend to other regions. “This partnership is another step to accelerate our endeavor to have mobile content contextually integrated with consumers’ browse and search activities, and also supports our efforts to extend our global leadership in mobile content distribution,” Kaj Hagros, COO of Fox Mobile Distribution, said in a press statement.

By way of background, MCN plugs into the content at the source (the content provider) to connect users to the content (not links to the content, as is the case with other search providers such as Google & Co.). As a result, MCN has announced a raft of recent deals with major mobile operators and a growing number of content providers (nearly 200 in its roster counting Fox Mobile). Beyond making it easier for users to get to content, MCN has developed what it calls “search merchandising,” a term that underlines MCN’s role in joining up mobile search, advertising, and content sales (through its allwords vertical paid search program) by allowing content providers to bid on entire verticals (such as games and music) rather than keywords.

Put simply, search advertising combines MCN’s federated search (delivered via MobileSearch.net, MCN’s white-label search platform) and vertical paid search (delivered through allwords, MCN’s own PPC mobile content promotion program) to make content searchable, findable, and monetizable. (MCN CEO Marc Bookman told me shortly after the allwords launch last year that the program was “generating click-throughs in excess of 45 percent – it’s as high as 90 percent in the comics category – and the highest conversion [sales] rates in the industry.” I’m not sure what they are these days, but I’ll certainly raise that in my next interview/podcast with the company.)

My take: Connect the dots, and Fox Mobile has its eye on the prize: The focus here is very much the connection between mobile search, advertising, and content sales, and creating an optimal interplay between them so that good user experience inspires more searches, which result in more monetization and, ultimately, drive more usage of the services among consumers. And all that without giving over control of the content to a mobile search provider/portal provider.

I was pre-briefed on the MCN tie-up around Mobile World Congress, but Mauro preferred to go on-the-record with his broader views on search, discovery and recommendation – features and functionality that define the company’s evolving content strategy. (You’ll see it all come together around April, when the new Fox Mobile makes its debut, and Mauro walks me through the new suite of services.)

In the meantime, allow me to share an excerpt of our Q&A (below) and (courtesy of Netsize) the complete interview from the Netsize Guide 2009 that started it all (further down in this post):

MSearchGroove

Q: New branding, new company, and a renewed focus on covering the value chain from licensing through production to distribution. What is Fox Mobile’s objective?

A: We want to sit between technology industries and Hollywood – between Silicon Valley and Hollywood. That’s where we want to be, and where we can be.

Q: You were just out there with Nokia, showing clips from Ice Age 3, which is set to come out in July. What other mobile products will follow and how might you distribute them?

A: We will have Flash content ready for July when the movie is released. What you saw today is just an appetizer; it will be followed by a whole suite of products. Distribution can take a number of approaches. This can be with our D2C brand, or it can be through the Nokia Ovi store, or through a download icon on Nokia that we manage globally. It can also be on O2 (a carrier in Germany that we work with). Basically it can be on a number of platforms, which is why time-to-market is going to be critical for mobile content. Lesson number one is that we have to work with the creatives very early on in the game to be sure we get the right content for the best formats. And this you can do if you are media company, not just a mobile company.

Q: How do you create content for so many platforms and keep a lid on costs? We know from MTV, for example, that it’s in many cases a matter of shooting content several times from several angles, including one for mobile. But that can get expensive…

A: My personal advantage is that I am from the entertainment industry. I used to shoot music videos and I used to be a singer. We get around the problem of double-shooting by focusing a lot on animation. As the Jamba brand, we’ve been very strong on animated characters in the first place, such as the Crazy Frog. Likewise, the Simpsons and Family Guy are also animated characters, so the process is just working with script writers and animators to explain the format you want, or just taking snacks [from the animated movie] for mobile.

Q: With so many app stores it’s beginning to look like the early days of the portal out there. It’s a confusing and fragmented landscape. How are you going to choose the stores where you sell, or the formats and operating systems you support?

A: It is more fragmentation, you’re right. As to portals, we are seeing a repeat of that. But we will not likely see a repeat of the exclusive content contracts that made it [reach] even harder. When it comes to branded content, I doubt anyone would give an exclusive [contract for content] again. We are based in the U.S. and currently reviewing which platforms to target, because in some cases you have to double your production costs depending on the platform. So, if you produce for iPhone – you have a set of tools you can’t necessarily use on Flash or Java. Working on Flash is great. It’s a fantastic tool for content providers and it targets a lot of devices, but not all of them. With Java, you have a broader penetration but the quality of what you can do [with content] is lower. So we need to make a choice. It will always be on a ‘cost versus return’ basis.

Q: More app stores also turns up the pressure to improve search and discovery. In fact, a major gripe with app stores is people can’t find the cool apps…What is the problem and how are you going to address it?

A: Search is important, and discovery is key. We aim to be more findable on every platform that we are on, and the new brand will focus on search and discovery as part of the offer. If you look at our B2B2C strategy, we want to be the partner of choice for companies that have high traffic. Why? Because then there are more chances of being discovered. Nokia is one of them [a B2B2C partner]. We are running their download client globally and discussing branded participation in the Ovi store. It [presence in the Ovi store] gives you access to one-third of the mobile population in the world, and that boosts discovery. I have also seen some of the demos at the Nokia stand, and they have been able to cut the number of clicks to discovery.

Another way to increase discovery is to work with carriers. Many operators are sending out RFPs [Request For Proposal] for outsourcing of content verticals, and that provides another channel [for Fox] to be discovered.  These [two] are the most promising but we shouldn’t forget the importance of contextual integration with the Internet companies such as the MySpaces of the world. Web-to-mobile discovery is coming on strong, particularly in the U.S. where the messaging revolution never happened. We are active on that front and focus on being the contextual integration partner for a lot of Web companies that do not have the skills to provide mobile services. Here we are bringing together their Web offer with our mobile offer so they can be discovered through relevancy when consumers are browsing the Web.

Q: What about relevancy and recommendations? During our Netsize interview we chatted off-the-record about some cool things in the pipeline. Can you give me an update?

A: You’ll see this in the new brand and the new user experience we provide around search and discovery. Recommendation – and the cross-sell and up-sell it encourages – is also part of the new strategy. We will have recommendation engines, but I would like to talk about it when I have the whole story.

Q: What about client-based discovery? You have a major brand that would also allow you to be a destination on the handset.

A: We have a WAP store, a Flash mobile client with Adobe, and we are considering a desktop app with Adobe as well. We are active on all these fronts and you will see the products as part of the new branding. Client-based discovery is great when you have branded content, as we do, to wrap around the client. This way the consumer gets part of the content for free in order to download it for the first time. But the client and desktop [strategy] only works if you have a fantastic piece of content in the first place that you can convince a consumer to download. That way you hide, in a way, the technology behind the content.

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NETSIZE GUIDE 2009 (Download your free copy of the book by clicking here.)

Q: You are renaming your company Fox Mobile Group. Does this new identity also signal a shift in strategy? If so, what is new besides the name?

A: Obviously, now that we are 100 percent owned by News Corp., we’re not just Jamba any more. But there is more to it than that. This also allows us to launch new brands in the future, which is what we plan to do in the U.S. soon. As a result, we can run a portfolio of brands, giving each its own legs and own possibilities as part of the Fox Mobile group. We’re also renaming because we want to be associated with [parent company] Fox on a B2B level.

Q: That’s very different from your D2C strategy to this point. Why the new focus and what are the growth opportunities?

A: The first opportunity is on-deck with the operators. In our company, we have built up competencies in content creation, content licensing, and sales and marketing. The strategy is to be part of their offer or, in some cases, to be their partner of choice if they choose to outsource the management of part of their content portal management to outside companies. If they’re a large carrier with operations in several countries and they want to centralize that outsourcing, then it’s clear there are only a few companies they can partner with globally that can manage that – and we definitely want to be one of them. It’s a strategy we are pursuing actively, especially in Europe. The trend is less progressed in the U.S. There is a massive opportunity and a difference to the way the market was a year ago. As you know, this trend [to content management outsourcing] was taking place before the economic crisis hit. Now we see it accelerating.

Another aspect of our B2B strategy is to be on-deck with some of the OEMs. Clearly, the success of the application store on iPhone in the U.S. has spurred a lot of interest among other more global [handset] manufacturers. The question for them is: Would it be better to have a third-party company [like ours] managing their activities, in terms of [managing] the applications store or [managing] content provision to consumers in multiple countries. Clearly, these handset makers have proprietary content services; just look at the example of Nokia and Ovi. However, they also offer download services, and last year [in our Netsize guide 2008 interview] we had already discussed the model in which third-parties sell their content through the download client. Today we have a situation where handset manufacturers are promoting their own services and brand. But they are also becoming a distribution mechanism for third-party companies. Because they realize they can’t possibly cover the whole spectrum of potential content and services that the consumers want with their own devices, they are making some of the real estate available to companies like us to deliver services through a client. The good news: It enhances both the value of the handset and the value of the content because it is distributed over millions of handsets.

A third aspect of our B2B strategy is about working with Internet companies that have high traffic. An example is our launch with MySpace in the U.S. at the end of September [2008]. It’s a contextual integration project in which we work with a partner to optimize their traffic and conversion of that traffic into sales of mobile content.

We are currently developing tools we can share with some of these Internet companies that would effectively allow them to start a mobile business without investing in a mobile business.

Q: What is your vision of convergence and the role of mobile TV and video in the mix? How are you positioning Fox Mobile Group to take advantage of the opportunities?

A: A cross-platform approach is important because consumers do not, and will not, differentiate between mobile and PC in the future. I think they [consumers' experiences] will start to converge in the next two or three years. For this reason, we’re exploring ways to combine TV, movies, and games consoles into one cross-platform offer.

That said, video and video streaming are high on my radar screen. The networks are mature and adoption rates of consumers in the U.S. for streaming channels are amazing – and we are on-deck [in the U.S.] with AT&T, Sprint, and Verizon providing channels for their streaming offer to consumers. In fact, the U.S. will soon become one of the hotbeds of technology because consumers [there] completely leapfrogged mobile messaging and are going straight for mobile data services.

Of course, video streaming is a technology that was hyped years ago. It never took off in Europe the way it should have, but it’s flying high in the U.S. I also think there is huge potential in approaches that combine streaming and downloads. We offer [streaming] content to carriers in the U.S. as part of Fox, and we are also looking at ways to integrate some of our product offers, such as Jamba or Jamster.

Q: On the topic of video streaming, do we “snack” video content? Or do we want a range of options that include full-length programming?

A: Will consumers want to watch a movie on their mobile phones? I’m skeptical. It’s more a combination of short clips – three to five minute snack clips – which are TV programming reformatted for mobile. There’s also a place for medium length [video] offer, but I find 10-12 minutes is the maximum [length] you want to offer, regardless of the type of content or its format. We have figured out what consumers want, but I can’t share too much of it now. I advise you to check out what Verizon and Sprint in the U.S. offer their consumers on-deck as part of the flat-rate data plans. To be clear: Flat-rate data plans are a must for any video services to happen.

Q: You mention pricing, what models are you exploring?

A: Consumers are getting smarter and they want more quality for their money. We know from our own research that a majority of people want to have mobile content. They’re just afraid to start a transaction because they don’t know what they’re getting in return, and they don’t how much they’ll be billed. That is something we want to change. It’s an area we will focus heavily on in our new brand launch this year.  Offering consumers a clear idea of what they are paying for? I think that’s going to be revolutionary in this industry; I don’t think this has ever been offered by anybody before.

The ad-funded model is interesting. However, in the mobile space, I see purely ad-funded models being very challenged in the next two years. I cannot see a solely ad- funded model succeeding in the market when the volumes out there needed to justify an ad-funded model in the first place are so small. Not only that, but we are now facing a credit crunch.

There are hybrid models [based on ad-funded], and we are experimenting with a few, as well as ways to offer a paid model that is somehow complemented by some element of ad-funded approach. But we are keeping with our premium content or paid content model for the majority of the activities that we have. Overall, it’s quite difficult today, unless a company can achieve tens of millions of impressions or unique visitors, to see how an ad- funded model could start to work.

Q: What are the key trends you see in 2009? What does the industry need to focus on in order to achieve success?

A: We hear a lot about technology, but what is missing in this business is blockbusters.What is missing is something really exciting, either on a product or content level, to shake up the industry. There hasn’t been much new since 1999, when ringtones, wallpapers, video streaming and audio streaming broke on the scene. Now we need to bring in the expertise of people who do this professionally, and that means becoming more of a mobile media company than a mobile technology company.

We have the advantage of being part of a media company and we will exploit that [advantage] by being heavily embedded in all the creative processes in the studios.  That way we can release content to the market, the likes of which have not been seen before, particularly in the area of video. In the next year, our focus is going to be on attractive content. Why? Because, for the mobile industry, the integration of mobile into the successful content in Hollywood, in movies, and in TV has barely started.

Disclaimer: MCN has been an MSG supporter; Netsize is an MSG supporter. Peggy Anne Salz is author of the Netsize Guide 2009.

Is this a banner year for advertising?

No pun intended, but it’s not a laughing matter for Ari Paparo, group product manager for advertiser products for DoubleClick, a division of Google. As he pointed out during the Telecom Council of Silicon Valley event last week, the tools companies use to optimize ad dollars online–such as advertising metrics and planning and executing ad campaigns at scale and across multiple channels– don’t carry over into mobile. To make matters worse, frequency capping, the technique used to control the number of times a user sees a specific ad, is limited.

Paparo said he’s also not satisfied with creative capabilities in mobile advertising. In fact, he described the MMA’s guideline for an extra-large image banner ad as unexciting. It “won’t move dollars,” he said. And his company is still not seeing the type of ad server capability needed to streamline the publication, distribution, and data reporting of mobile advertising at large scale. But it’s not all grim. Paparo said that DoubleClick is encouraged by the availability and adoption of cookie-enabled high-end phones and the better creative delivered over these devices. And Paparo said that in the next 12-18 months, he expects publishing technologies and ad serving, as well as the ability offer even better and more-targeted ads, will all improve substantially.

While mobile advertising tools, technologies and all-important analytics have their shortcomings, there is mounting proof that mobile advertising can pay-off, particularly for the network operators who – like broadcast operators – stand to gain the most.

Kevin Kim, senior director of corporate development at SK Telecom –South Korea’s leading operator and a well-known innovator of data services– showed that Korea is, as he put it, a “test bed” of a viable and growing mobile ad market. Mobile advertising sales revenues in South Korea were $70 million in 2008, nearly double the revenues from 2007. And a breakdown of the $70 million in 2008 showed that mobile ads garnered a 5.9 percent share of the new media advertising market, not an insignificant figure. (To put all of this data in perspective, Kim reminded us that that South Korea’s advertising market is about 1/18 that of the US.)

SKT has offered mobile advertising since 2000 and has built a growing business because it understands advertiser requirements. In addition to offering attractive mobile data services, SKT has set up an in-house ad agency and advertising platform to help its partners develop and distribute ads. To round out the offer it also helps businesses offer mobile-commerce applications.

SMS- and MMS-related ads offered the greatest opportunity for SKT and its partners initially, but non-messaging ads are growing at a fast pace, increasing from only 16 percent  of ads in 2006, to 28 percent  in 2007 and reaching 37 percent in 2008. Kim said he expects non-messaging ads in the country as a whole to capture more than three-fourths of the market (76.3 percent) in 2010, when mobile advertising in South Korea is expected to exceed $200 million. These non-messaging ads will driven in part by flat-rate data plans, which 40 percent of customers will be using in 2010 (up from about 15 percent today). However, the popularity of SMS ads “will be short-lived,” he said. “It is not a long-term business model.”

Metrics may be a stumbling block for some, but Kim isn’t stymied by this. As an operator, SK Telecom can compile granular data on customer data usage, though Kim did acknowledge that the company has not been able to fully utilize this information and is therefore investing in creating tools to better facilitate this. But ultimately, he said, “the best metric is sales of products.”

To give this point extra emphasis, he offered a very positive and exciting look at mobile coupons – an area of marketing and advertising just beginning to take off outside Korea and Japan:  SKT’s numerous campaigns (conducted in partnership with major brands to attract customers to stores, often with a combination of banner ads, SMS ads, and short codes and other techniques and often integrated to point-of-sale terminals) are proving highly successful, he said, in some cases producing redemption rates above 96 percent.

Paid search was also a hot topic, and we were treated to some fascinating observations on mobile search and advertising usage from early-adopter markets such as Japan and Southeast Asia.

Paul Feng, Google senior product manager for mobile advertising, said Japan is one of Google’s best markets for mobile search. Comparing mobile and desktop search usage and patterns, Feng pointed out that Google is observing a bump in favor of mobile search in the morning during commute hours, an increase in mobile search versus a drop in desktop search during the lunch hour, and more mobile than desktop search in the evening hours.

Further, he said that Google Maps usage on mobile phones increases on weekends, while the use of that application on desktop systems goes down. While all this is favorable for mobile, he acknowledged that early morning mobile search was not as meaningful as his company had hoped. “Commuting is not as big a factor as we expected,” he said. His message for advertisers: Consider mobile and desktop search as complementary to one another and when targeting your ads, keep in mind daily traffic trends.

But could it be that morning mobile search is a significant trend that doesn’t play in favor of Google mobile search?

Phyllis Reuther, CTO of Mobile Content Networks (MCN)–a company that began by providing a platform for federated mobile search and has since extended its reach to providing a combination PPC content promotion and vertical paid search program – stated that MCN is observing a significantly higher jump (than Google) in search traffic in the early morning, around 7:00 to 9:00 a.m., in the company’s Japan and Southeast Asia markets (her data for the two markets is combined). She said the early morning jump on MCN is similar to the lunch-hour peak. Usage begins picking up again around 5:00 p.m.

Reuther attributed the better early morning traffic to MCN’s ability to present search results according to vertical channels, such as music, games and comics, direct from the content provider (as opposed to a link to the content delivered by other mobile search services). In her view, the early morning users are in the under-30 age group and highly motivated to find the latest ringtones and other products before beginning their daily work and school routines.

Another view on the best times of day to advertise came from Cirius Technologies, a Tokyo-based company whose AdLocal service (available in Tokyo) displays local ads to users based on their current location. A Tokyo case study showed some interesting differences in the number of ad impressions delivered during specific hours of the day. In short, ad impressions go up beginning at 7:00 a.m., at lunchtime, and beginning again at 4:00 p.m.  Cirius also delivers substantially more local ads during the weekends than on other days of the week.

For sure, these companies’ observations underscore the extent to which the type and personalization of service impact take-up of search and advertising services and the degree to which “know your customer” must really be understood.

While context and advertising are intertwined, communications – in the form of mobile email–also offers an excellent vehicle for delivering a marketing message.

Funambol, a company that offers a cross-platform, ad-funded white-label push email solution and synchronization technology for mainstream mobile phones, used the Telecom Council event to release findings from a recent survey of 600 users.  (The company began offering its ad-funded email services in October to Nokia 60 willing handset users. The service offers email micro-banner ads supplied by one of its partners, Smaato.)

Hal Steger, vice president of marketing at Funambol, said the company surveyed users after the first month of service. It found that users viewed an average of about 500 mobile ads each, clicking on about 1.5 percent of those ads. The company calculates that on the basis of CPM and CPC, the service generated about $10 per user per month.

Most were generally happy with the service, he said. About two-thirds (63 percent) recalled seeing the micro banner ads. Nearly three-quarters (74 percent) said the adds did not interfere with their ability to access email and 85 percent said that ads did not affect usability of the email client. About 21 percent said they had “clicked” on ads to visit mobile sites. And 84 percent said they would recommend the service to others.

Funambol users also said they’d be willing to pay about $6/month, inclusive of data fees, for an ad-funded mobile email service in order to help subsidize the cost of mobile email. Steger believes the service is ideal for mobile phone customers who want the convenience of push-based email but who may not be able to afford the types of devices or data plans associated with the BlackBerry and similar devices.

***

Peggy Anne adds: The market opportunity for ad-funded email was also the subject of a recent white paper I wrote on behalf of Funambol, aptly titled Free For All: The Untapped Opportunity For Mass Market Mobile Email. In it I present some intriguing evidence that an ad-funded or ad-subsidized go-to-market model is the only approach that will drive service adoption among cost-conscious mass market users. Put simply, an ad-funded business model is the only approach that gives people the service they want at minimal or no cost, while allowing mobile operators and service providers to generate significant revenue. You can download the white paper or listen in to the podcast Hal Steger recorded with me here.

MSG is also proud to partner with bnetTV to conduct studio interviews with an exciting line-up of companies including AdMob, BuddyMob, BuzzCity,Gigafone, Gracenote, GyPSii, JumpTap, MCN, Mob4Hire, Movius, and VISTO. The finished segments will showcase on MSG (in the customized video player in the right-hand corner), so please check back regularly. You can also look for event coverage – as well as my regular columns – on this special Events page bnetTV created exclusively for MSG.

Which brings me to this week’s column and focus on Motricity, a provider of mobile data solutions and services, ranging from mobile portals and storefronts, to messaging aggregation, to a slew of mobile operators and content providers, including AT&T, Verizon Wireless, T-Mobile, Alltel, TracFone Wireless, PlayPhone, CNN, FOX News, A&E, and Condé Nast. The company had a banner year in 2008. It achieved over $100 million in revenue, exceeded acquisition integration targets, expanded customer relationships, and delivered over 11.5 billion pageviews across all deployments of its mCore Platform. (Over the past year, Motricity reports mobile Internet access has grown 45 percent, a sure sign that mobile data services are gaining serious traction.)

But the real news is mobile marketing, a sector Ryan Wuerch, Motricity Chairman and CEO, tells me is poised for impressive growth.

During a recent interview with bnetTV, Ryan identified three key drivers behind this trend: The advance of the mobile Web, the arrival of handsets such as the Apple iPhone that deliver a satisfactory end-user experience, and the increasing recognition among mobile operators, agencies, brands, and content companies that advertising is content, and should therefore be customized (translated: targeted) to individual consumers based on factors such as profile, preference, and permission.

Put simply, plain-vanilla mobile content tailored to mass-market tastes doesn’t cut it. It’s about delivering personalized, compelling experiences to consumers in order to increase data usage, ARPU, and brand recognition. As Ryan put it: “Content providers and brands are looking to leverage the data, intelligence and connectivity of the carriers in order to offer a personalized, relevant solution to consumers.”

Another shift transforming the mobile marketplace: The emergence of the open mobile Web and truly open models that blur the boundaries between on-portal and off-portal (on-deck and off-deck). In Ryan’s view, its “one multi-channel content marketplace” with the mobile phone – a device with features and functionality including a personal navigation system, a barcode scanner, a camera, a radio, a walkie-talkie, a TV, an electronic programming guide, a remote control, a digital music player, a photo album, and an archive – at its center. Operators and brands are more closely aligned in their strategies to encourage mobile advertising and Motricity is more sharply focused on “being in the center of the mobile ecosystem for the movement of content and data” between all the parties involved.

My take: There can be only one business model. OPEN. Ryan believes players up and down the value chain will ultimately embrace the open strategy. Why? Because inclusive is better than exclusive, particularly when the end-game is about forging partnerships that will grow the pie for everyone.

Ironically, this is also the message of my own white paper, sponsored by Motricity and slated for release in the next weeks. Aptly titled ‘There Can Be Only One,’ the white paper demonstrates the business benefits of a comprehensive, all-inclusive federated mobile search strategy that meets user demand for choice by combining results from storefronts, the Internet and the mobile Web. I argue that such a strategy creates a new and robust ecosystem and firmly places mobile operators at its center. More may be better, but open is always best.

Look for the white paper available for free download via MSearchGroove.

Disclaimer: Motricity is an MSG supporter.

The companies teamed up in Norway along with MADS, a European mobile advertising technology provider, and Aspiro, a Scandinavian mobile content provider, to evaluate the effectiveness of federated mobile search – an approach that blends results from a variety of content sources and search engines – and personalized advertising.  Findings from the pilot tell us that CTRs for personalized ads “exceeded those for random ads by a 3:1 ratio.” What’s more, CTRs on ads also “increase in proportion to the degree of humor, context, and targeting associated with specific search queries.” Finally, nearly half of the users surveyed reported they were “satisfied or very satisfied” with the service, and 54 percent said they got the results they wanted. (Both results were more than double pre-study satisfaction levels.)

The takeaway: MCN CEO Marc Bookman is quoted as saying that the Telenor pilot has “confirmed the effectiveness of federated search to promote content availability, to rank and place relevant content, and to support the delivery of highly relevant and valuable advertising.” This conclusion dovetails well with my own work in this space, which I present in a white paper on federated mobile search, the first of its kind in the industry, sponsored by Motricity and slated (I’m told) to be released in the next weeks. I reserve judgment on the specific findings of the Telenor pilot until I know more about the methodology. (The press release is quite thin on this.) However, I’ll have a chance to get the inside track from the source soon. Andrea tells me I have a bnetTV interview scheduled with MCN co-founder Kimmo Paaso during Mobile World Congress (MWC), so please check for the video interview (on the MSG player) shortly after the event.

XIAM: A giant step forward for location-based advertising, content, and services. Xiam Technologies – a Qualcomm subsidiary providing discovery and recommendations solutions to mobile operators, and a company MSG has covered from the star – has added location to the mix, beefing up its platform to deliver “recommendations ranging from helping subscribers find their way around new cities, to locating products and services they need quickly, wherever they are.” According to a press statement, the addition of two new algorithms now allows Xiam to make location-based recommendations and assisted mobile Internet discovery available to its global customer base.

The platform’s open APIs pave the way for operators, publishers, and third-party brands (!) to make “geographically specific offers of content and services to subscribers.” How precise are these location-specific recommendations? The company says they are “accurate to the latitude and longitude of the device, providing relevant results in real-time for anything from local hotspots to retail outlets.”

The takeaway: This enhancement – plus the addition of an assisted mobile Internet browsing discovery service (allowing users to receive individual recommendations for mobile sites and widgets) – significantly strengthens Xiam’s (and Qualcomm’s) strategy to target publishers and brands. (Think Plaza and you’ll get where this is going. Add a multi-platform approach, which Xiam talked about here, and you’ll know why I’m excited to find out more.) Fortunately, Martin Clancy, Xiam Marketing Manager, has just reached out to offer me a briefing during MWC, so I’ll have a much more detailed take on this soon.

TOP KEYWORDS: A valuable post from Bryson Meunier, Associate Director of SEO at Resolution Media, an Omnicom Media Group, and leading SEO expert (my opinion). In this recent post, Bryson does the heavy-lifting for us all, compiling a must-read list of the top mobile search queries entered in 2008, as reported by Yahoo Mobile, AOL Mobile, and Google Mobile India.

Yahoo! Top Mobile Searches 2008

1. MySpace
2. Facebook
3. Craigslist
4. Movies
5. Weather
6. Olympics
7. The Dark Knight
8. Kim Kardashian
9. eBay
10. AIG

AOL Mobile Search Top Mobile Searches 2008

1. MySpace
2. AIM
3. iPhone
4. MocoSpace
5. Facebook
6. Craigslist
7. Weather
8. Free Ringtones
9. MapQuest
10. Match.com

Google Mobile Top Mobile Searches 2008 – Google India

1. orkut
2. yahoo
3. waptrick
4. gmail
5. games
6. katrina kaif
7. rediffmail
8. yahoomail
9. namitha
10. google

But Bryson doesn’t stop there. He also conducts an interesting experiment, assigning each keyword a volume according to Google’s new mobile keywords tool. His takeaway: “If you or your clients were selling anything in 2008 that related to any one of these things and you didn’t target mobile users, you missed out on millions of impressions and possible conversions.” The mobile opportunity is significant, and Bryson’s must-read blog gives us the context we need to understand and take advantage of it.

Disclaimer: Motricity is an MSG supporter; MCN has been an MSG supporter.

BuzzCity’s keen focus on serving the “unwired” in developing countries – people whose only access to the Internet is their mobile phone – made business sense from the start, allowing it to chalk up 3+ million users across 80 countries (as of December 2008). But it’s the company’s clever approach to mobile advertising that makes it the one to watch. Expect a raft of announcements kicking off at Mobile World Congress (MWC), allowing app and content providers to get more reach (and thus more revenues). This is all I can say under NDA, but think ’social graph meets viral-marketing’ and you’re definitely on the right track.

As KF puts it: “It’s about critical mass, and we have reached a critical mass in myGamma today that has become attractive to developers who want to tap into our community and soon beyond [these] members to friends of friends of myGamma [members].”

To this end, upcoming announcements will emphasize “improvements to our ad network and ad serving system so that it delivers value to advertisers and publishers.”

For now, let’s just say announcements pave the way for application developers to better distribute and monetize their content via the myGamma community and wider network of off-portal publisher sites and destinations BuzzCity has built through partnerships and as a result of the $10 million investment it received last summer from South African media group Naspers.

By way of background, the investment boosts BuzzCity’s profile, powers its expansion plans, and cements Naspers’ position as a formidable force in the evolving media landscape. The key here is convergence, and there’s clear evidence of a business model that could potentially blow other mobile social networks out of the water.

Naspers is a multinational media company headquartered in South Africa, with principal operations in electronic media (including pay-tv, Internet and instant-messaging subscriber platforms, and the provision of related technologies) and print media (including the publishing, distribution and printing of magazines, newspapers, and books). Naspers’ investments include: ACL Wireless Limited, a major provider of mobile value-added services based in India that offers community applications such as chat, IM and social networking, as well as mobile services; Tencent, a provider of Internet and mobile value-added services in China with the largest IM community in China – QQ; Sanook!, the leading Thai language portal in Thailand; and Mail.ru, ranked as the number one email service for Russian speaking users with some 30 million unique monthly visitors, and over two billion monthly page views (according to the website).  And the list goes on…

The goal is to expand the BuzzCity mobile ad network. But there are no plans to manage mobile advertising campaigns. For that, KF would rather team up with companies such as Top Space, the media arm of Sanook!, and be the mobile part of the pitch the company makes to clients. As he puts it: “The idea is to complement the existing offer these companies [in the portfolio] have and extend that reach into mobile.” BuzzCity is also not interested in content creation. “At this stage we have decided that we will not take a stake or invest in a company that develops original content. We want to work with these [content development] companies, allowing them distribution and marketing through our community and [Naspers] portfolio companies.”

Excerpts from the Q&A:

Q: Who are your competitors? We know it’s AdMob when it comes to ad networks – but who are the players that compete against BuzzCity at the big-picture level?

A: Looking at the competitors, I can say we will be the first one in the space to create a real ecosystem. We have community and a complete monetization path, and there’s more to come. [In comparison] the App Store doesn’t have the community, and it doesn’t run ad networks.  App Store is a pure transaction mechanism.  It leverages on the number of people that use iPhones to provide a transaction-based monetization path. So a comparison with Apple is possible, but not accurate. We’re closer to Facebook. It offers a developer platform, allowing developers to build the applications on Facebook and popularize them by offering them to [Facebook] members, but the monetization path is not so clear. Likewise, the ad network isn’t in place to help publishers and merchants monetize the traffic. We have all that, and all the developers have to do is figure out how to make their applications popular. Once they are popular, the way is clear to make money out of them. Then the question becomes: Do I continue to offer it for free, so that I can charge for advertising? Or do I charge for my application? Both options are supported by BuzzCity.

Q: You already have developers offering apps and content to the community? What are the hot items?

A: The most popular applications are ones that allow users to have some fun and express themselves. For example, there is a Tarot card [app] that tells your future and lets you share Tarot cards with your friends. Another popular application is called Hug Me. It’s just a simple hug, and users can give each other virtual hugs and show each other they care. Virtual gifting is very big, and we expect to see quite a number of virtual gifting applications moving forward.

(BTW: This response dovetails well with Tim Green’s observations over at Mobile Entertainment. He points out that virtual gifting is part of a successful monetization scheme for BuzzCity. What’s more, he wouldn’t be surprised “if, a few years from now, Facebook decides the best way to get a presence in mobile in certain geographies is to advertise on BuzzCity’s network.”)

Q: Let’s talk about the release of the BuzzCity Mobile Advertising Index, a report that tracks the growth of off-portal mobile Internet use in more than 200 countries around the world. For Q4 2008 the index shows almost 50 percent growth in paid banner advertisements in the U.S. Specifically, 382 million mobile banner ads were served in the U.S. in the last three months of 2008, a 47 percent increase over the previous quarter, and a 209 percent increase for the year. In a press statement, you said this is an indicator of the resilience of mobile advertising in the face of the current economic downturn, as well as the exponential growth in mobile Internet use among U.S. consumers. Can you elaborate? And what are you seeing now?

A: In the fourth quarter of 2008, just over 7.5 billion advertiser banners were delivered across the network, representing quarterly growth of 40 percent, a slight increase from the previous quarter’s growth of 38 percent. According to our data, we actually only service about one-third of the advertiser demand.  In other words, there is another two-thirds of advertiser dollar [budget] on the table every day that we’re not spending. We have advertiser dollars waiting to be earned, if developers are able to develop compelling applications that users find interesting. We have a board meeting this morning, and I can say I have very happy shareholders today.

Q: Is it the focus on the Long Tail that allows you to profit in a recession?

A: Yes. When we put our Long Tail mobile ad network together, aggregating around 2,000 smaller sites, it was about capturing value offered by the smaller sites – sites that otherwise would not be able to attract advertising on their own. It was also about allowing advertisers to reach a diverse audience. After all, if you want 1,000 people to respond to your offer, you’re more likely to succeed if you try to attract 1,000 people from 1,000 different sites rather than 1,000 visitors to a single site.

In fact, the financial crisis has so far has turned out to be a net positive for us.  We expected two things to happen. We expected venture-funded companies that were buying traffic to drive the downloads would likely reduce their spending because they were worried they might not be able to raise the next round of funding because of financial crisis. This did happen, but the financial crisis hit the U.S. and U.S. companies harder than the rest. Elsewhere, companies that were spending on ad networks to buy traffic have not reduced their spending. In addition, we expected mobile value-added service providers to cut back advertising spending, which also happened. But these [VAS] players appear to have moved larger portions of their advertising budget into mobile Internet, which benefits us. We’re also seeing a rise in spending coming from more traditional businesses, such as financial services. They have increased overall mobile Internet and advertising spending because it’s more controllable and measurable [than other media buys].

For example, in India, advertisers are reducing their overall budgets by up to 50 percent. In fact, [publications like] Hindustan and Times of India are reporting 75 percent reductions in the ad revenue. But, in reality, a shift is taking place and advertisers are moving money from online to the mobile Internet.  So, BuzzCity profits from the financial crisis. You have seen that from quarter to quarter we grew about 40 percent, and from November to December we actually grew 40 percent as well, month to month. In January, we see that the trend has continued and we are quite hopeful that in this quarter [1Q2009] we will report either a similar growth rate or an even bigger one.

Q: Speaking of India, you recently launched a feature that enables brands in India to target ad campaigns to four regions around four major cities: Mumbai, Delhi, Chennai, and Kolkata. How is demand for that?

A: It’s getting very good response from advertisers. But most advertisers are looking for reach and don’t only want to target individual regions. Overall, India has been growing quite well over the last months, with a number of more traditional companies taking their campaigns to mobile.

Q: Can you provide examples?

A:  A lot of activity from banks. In the last months we’ve seen Sri Lankan Airlines advertising to Indian customers. We have also seen campaigns from Toyota, Dell, Renault – and other big brands using mobile to reach Indian consumers. In fact, activity has increased so much over the last six months that we increased our team there from two to five [people]. We are also planning to roll this feature [being able to target regions] out to two more countries over the next six months. We are deciding the countries and I’ll let you know closer to the date.

Q: You recently announced a deal with MCN in Thailand, where you use its MobileSearch.net platform to power content discovery and mobile search for your myGamma community there. I’ve seen other mobile communities embrace search as well, I’m thinking here of the deal between itsmy.com and Taptu. How are members using mobile search?

A: From my initial observations, it doesn’t seem that users like to search as much as they like to discover new things. We’re talking with MCN about how they could use the social graph to make mobile search much more of an activity involving user recommendations. Of course, we will leave the mobile search technology to providers and not develop our own search service. There are a couple of other initiatives that we are pursuing right now but we’re not ready to announce details. I can also say that we are looking at launching keyword search functions in our ad network, letting advertisers target the advertising based on the user query.

***

NOTE: I’ll also have more about the nuts and bolts of BuzzCity’s ad network in my upcoming mobile advertising white paper, set to be released in time for MWC. As I wrote earlier, BuzzCity understands advertiser requirements for spending control and improved targeting. More importantly, it walks the talk, providing advertisers a balanced mix of mobile analytics and post-campaign demographic data (based on a representative audience sample). In fact, click analytics from BuzzCity (I ran banner ad campaigns across three mobile social networks, including BuzzCity) showed my audience was predominantly male, with over one-third of my clicks in the U.S. coming from the state of Mississippi.

My take: It’s potentially valuable feedback for advertisers wanting to target campaigns to variables such as gender and location, and a clear competitive advantage for BuzzCity over other ad networks.

Disclaimer: The MSG series of mobile advertising white papers is sponsored by Bango.

I caught up with Steve Ives, Taptu CEO, in an exclusive interview where he revealed the recent deal with itsmy.com is just the start. Look for three more deals with mobile social networks before February. Also expect Taptu to sharpen its focus on mobile search monetization, particularly in the U.S. where Steve tells me most of his traffic is. (And there’s an even better reason to concentrate on mobile search sponsored links; sources tell me CPMs around key word search terms are in the $3-$10 range.)

Listen to the podcast here. [20:22]

I should add it’s longer than others in the series, but that is because we deep-dive into a variety of key topics, including mobile search trends, Taptu’s ambitions to deliver mobile search verticals (and allow users to personalize them), the impact of the iPhone, the emergence (and pivotal importance) of a new segment Steve calls “unwired socials” (accounting for over half of Taptu’s users today), and a few details of a strategy Steve would rather keep under wraps to develop a “user interface for discovery” inspired by touch devices.

But for me, the real news is the keen focus on mobile social networks. In November Taptu quietly and cleverly sealed a deal with itsmy.com, an ad-funded mobile-only social network with two million users, to provide core search functionality (allowing them to search for mobile content such as videos, entertainment, music, and images from within the community as well as directly from their personal homepage). The deal also lets itsmy.com monetize those searches through mobile search sponsored links. (By way of background, Taptu replaces Google, and I’ll go into the reasons in my podcast with Vince Staybl, Gofresh CEO, which is coming up in this series. As Vince put it: Google failed to “get” mobile – a serious shortcoming that convinced him to switch to Taptu.) Gofresh isn’t the first mobile social network to ally with Taptu for search and advertising. Moblr quietly replaced Yahoo with Taptu in February 2008 to do much the same thing. (More evidence of a trend: The decision by BuzzCity to partner with MCN for mobile search for its mobile-only social network myGamma in Thailand.)

Another deal from Taptu you may have missed in the holiday hectic: A partnership with ZooVision, a U.S.-based free streaming mobile video portal, to provide mobile search and no doubt increase its entertainment-related inventory. (By way of background, Taptu replaced Google – yet again.)

Other highlights from the podcast:

FUNDING: In December, Taptu secured GBP6.45m in series B funding from its existing investors (3i and Sofinnova) and appointed Andreas Bernstrom to the position of Chief Operating Officer (COO). The money will allow Taptu to focus on monetization. As Steve put it: “We’ve only just started putting ads on our site. So, for 09, the big focus is optimizing the monetization, so for every thousand searches that get made on our site, we optimize the revenue.” (The business model is a rev share.)

AD NETWORKS: Taptu works with Yahoo, Google and AdMob. “We’re focusing on search ads and search ad platforms, so we’ve been working with Yahoo in the U.K. for a couple of months now just to explore what happens when we put those search ads up on our site….For us, a big priority next year is the U.S., because actually the majority of our audience is in the U.S., and looking at how we best monetize that. But it is going to be search ads, in other words ads that are tied into search keywords, because we found from our ad experiments that they have the best revenue per thousand.” (I asked around in the industry and the word is keywords can fetch $3-$10 CPMs.)

RELEVANCY & ENAGEMENT: The industry needs to work on both. Online we have annoying display ads, and users are anything but engaged. Mobile could go the same way – so wake up! “In the mobile world, users can develop banner blindness very quickly. They’re not terribly engaging, and we’re training users to ignore them because most ads are not very relevant to the needs of the user. So we’ve got to increase relevancy on the one hand, and we’ve got to make them more engaging and kind of entertaining on the other hand.”

SEGMENTATION: Most of the audience is Unwired Socials whose first screen in is the PC, but this is changing. Make way for the Pioneer Youth, propelled into a strong second position by the iPhone and other touch screen devices delivering a rich mobile Web experience. (Keeping in mind they still don’t do a great job transcoding sites with flash, for example.)

SEARCH BEHAVIOR: Unwired Socials search for entertainment and some adult; Pioneer Youth gravitates to career and lifestyle. Sensing an opportunity in other verticals such as mobile job search in emerging markets, Taptu is determined to evolve “from a sort of beachhead in entertainment search, which is where we started, to add more and more sources to become a universal search engine.”

FEDERATED SEARCH: Figures prominently in Taptu’s roadmap. “Our strategy is to extend that to allow for hundreds or even thousands of sources and to allow users to create their own vertical channels with Taptu. It’s going to take a while to translate that vision into reality, but it’s the way forward which offers the best scope for improving the relevancy of results because you can have custom scoring systems for each channel which are optimized to that channel.” As Steve sees it, it’s all about “allowing the user and having a discovery into user interface which allows the user to explore these different channels easily and look for related results.”

UI IMPROVEMENTS: Look for them! Steve preferred not to disclose details, but he’s bullish on touch screen devices. As he puts it: “Touch devices give you the opportunity for a much more interesting user interface for discovery than normal phones, so you’ll see some innovation from us in that area.”

2009 TRENDS: A slowdown in the market and fewer people replacing their handsets. The bright spot: The continued enthusiasm for the iPhone and the N97. Another interesting development to watch for: Local search on mobile will develop into a different market – with different dynamics. “The user interface for local search is going to be in a mapping application; it’s not going to be the search engine search box. So, local search will gravitate – it will almost fork into being somewhat of a different market, accessed from a different point on the handset user interface.”

On a personal note, I’m pleased to report Charles Knight, at MSG partner site AltSearchEngines, is back in full-force and looking forward to a fantastic 2009 with more staff, more content and more traffic. And it’s a similar success story at MSG. He is cross-posting this podcast and all MSG mobile search coverage. I’m excited about the cross-pollination because many super-cool online search engines are gearing up to go mobile – giving both our sites loads to track and analyze. Another trait that brings us closer together: Our determination to offer Alts (alternative search engines) a platform. To this end, we are planning yet another event, much like our search engine dinner in Berlin last fall. This time it’s MARCH 30 in San Francisco (timed to the SF Expo) – so please mark that date.

Disclaimer: MSG collaborated with Taptu on a white paper in 2008; MCN has been an MSG supporter.

I am proud that EContent named me to its panel of 14 judges to evaluate the 100+ candidates across the categories: classification & taxonomy; collaboration; content commerce; content creation, production, & digital publishing; content delivery; content management; content security; fee-based info services; intranets & portals; mobile content; search engines & technologies; and social media. (We spent one month in our judging wiki, reviewing previous list members and considering a slew of worthy new contenders. In addition to casting votes, we were involved in lively discussion and debate – a process that was daunting at times, but always incredibly rewarding.)

More importantly, my participation in the judging team allowed me to introduce my peers to mobile industry innovators high on my radar and emphasize the role of mobile-only search and personalization companies in the scheme of things.

Content may not be convergent yet, but the all-pervasive nature of digital content reinforces how important it is for organizations of all kinds to maximize this essential resource and, as my dear friend and mentor Tomi Ahonen would say, Think mobile.

Congratulations are in order for the four new (mobile) additions to the EContent100: ChangingWorlds, CrispWireless JumpTap, MCN and SurfKitchen. They join other movers and shakers that made the list including Apple, Facebook, Google, Microsoft, Nokia and Twitter. As today’s press releases show, SurfKitchen was recognized for its innovation and influence in mobile content and service delivery; MCN was commended for its position as a leader in federated mobile search and search merchandising; and JumpTap was honored for its advances in mobile search and advertising. (Click here for the full EContent list.)

A special thanks to Julie Ginches at JumpTap for not only issuing a press release, but also recognizing my involvement in the judging team. I would also like to extend my personal thanks to the dozens of mobile content and search companies that reached out to me directly and encourage you to keep the conversation going. I will be a member of the judging team for years to come – and will work with EContent in every way I can to ensure that those companies hard at work to make digital content work are recognized for their accomplishments.

On a personal note: I invite you to peruse my EContent columns (aptly titled Agile Minds) here. EContent has also promoted me to the position of contributing editor, so please reach out to me directly with your pitches. I am always open to good ideas! As I have said many times, my mission, and the purpose of MSG, is to identify and amplify voices the industry should hear.

Disclaimer: JumpTap has sponsored an MSG podcast series; MCN is an MSG supporter

But the real news is the traction MCN has built up outside Japan, where the company has quietly launched mobile search and “search merchandizing” with eight major off-portal sites and picked up another 50+ content providers for its allwords offer.

By way of background, MCN’s approach to what it calls “search merchandizing” combines MCN’s federated search (delivered via MobileSearch.net, MCN’s white-label search platform) and vertical paid search (delivered through allwords, MCN’s own PPC mobile content promotion program). The aim is to make it easy for users to find content from any source by providing a vertical paid search program that effectively connects users directly with the content item.

Avea is MCN’s first official search+allwords launch outside Japan, soon to be followed by a string of deals that will peg the needle. In fact, MCN CEO Marc Bookman, whom I interviewed during CTIA Wireless, has since revealed to me that the company has several Tier-1 operator deals under its belt (signed but not yet announced), including an impressive win in Europe.

Fortunately, the Avea announcement dovetails well with my meet-up with Marc at Mobile Content in London next week. He and Stephen Burke, MCN SVP Marketing, have agreed to walk me through the company’s recent deals and their future roadmap.

Connect the dots, as I have, and 2008 was the year MCN tripled (!) the number of distribution partnerships outside Japan, adding operators and service providers including Tele2 in Sweden, Smart Communications in the Philippines and BuzzCity, a global mobile social network that implemented MCN in Thailand. I look forward to getting the inside track on this and more during our meeting Wednesday and will circle back with what the company is prepared to reveal on-the-record.

Today’s announcement from MCN comes in just as MSG is launching its video jukebox feature together with bnetTV, the leading destination for news, analysis and buzz around must-attend trade shows and events including Mobile Internet World, Mobile Marketing Forum, Mobile World Congress and CTIA.

It was at CTIA that I joined the team to conduct interviews and produce a string of videos focusing on mobile search, mobile advertising, content adaptation and mobile social networking. The team is professional (and great fun to work with!), and I am 100-percent on board to conduct interviews at MWC and all other events we attend together. Special thanks to Michelle Sklar, Tony Sklar, Nicole Scott for arranging the streaming video jukebox and to Curtis Schmigelsky for designing the widget.

I invite you to listen into the MCN video and explore the other interviews in the jukebox. During CTIA I connected with 25+ companies including Infogin, JumpTap, Millennial Media, Snaptell, Seeqpod, Nuance, Spinvox, BuzzCity, The Hyperfactory, DeviceAnywhere, Bytemobile, Motricity, Medio Systems, Novarra, Movial, SinglePoint, and JYGY. (Not in any special order.) Explore and enjoy!

Disclaimer: JumpTap and MCN are MSG supporters.