Mobile Ads: Slow to Take Off

(page 2 of 2)

"If one [ad] network performs better than another, we can shift the budget," he says. Likewise, if users don't seem interested in a particular ad, it can be redesigned.

So for now, many advertisers are in wait-and-see mode. "At the moment, the level of transparency is not enough to drive significant budgets into this medium," acknowledges Henry Stevens, director of media and entertainment at GSM Assn., a trade group that represents wireless service providers.

Measures of Success

In a bid to rectify the situation, the association announced in February that five of its most prominent members—Vodafone (VOD), Telefónica O2 Europe, T-Mobile International, FT/Orange Group, and 3—have formed a working group to define common metrics for mobile advertising. By yearend, these companies hope to develop a set of standard measures and then launch a trial in Britain. Using input from ad agencies and wireless carriers worldwide, the group will attempt to define everything from what constitutes a click to how to measure different kinds of user behavior. "The experimentation stage is almost over, and, in order to scale, operators need to work together [to fix this problem]," Stevens says.

A separate effort launched by Nokia (NOK) focuses on making it easier for ad agencies to compare the results of different ad campaigns. In February, the world's largest cell-phone maker rolled out Nokia Media Network worldwide. The network, which lets companies place ads on mobile media sites from Nokia and about 80 other content providers, allows advertisers to contrast the performance of their ads on the various sites. Advertisers can also see which types of ads, be they banners or text messages, are working best. "Our focus is very much on this analytics element," says Mike Baker, vice-president at Nokia Interactive.

Not surprisingly, mobile ad agencies see the urgency in delivering more reliable data to their clients. "We want to enable advertisers to understand value of ads more deeply," says Jason Spero, vice-president of marketing at AdMob. "We want to let them see where a user goes, which phones they use. Otherwise, you can't engage with an audience."

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.