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Investing in Mobile's Future

Mobile advertising

SAN JOSE, Calif. -- A few years back when the Associated Press was mulling whether to make a big investment in mobile content distribution, it came to a somewhat counterintuitive conclusion -- to go for the relatively few mobile phones capable of supporting full, rich Web experiences, rather than the far broader market of less-advanced, mass-market cell phones.

Instead of tailoring content for the significantly larger market of phones that supported Wireless Application Protocol (WAP) -- a simplified version of the Web designed for mobile devices -- the AP held out for more robust smartphone devices. And, it said, the bet paid off.

"We know more than fifty percent of users on WAP had a terrible experience trying to get news that way, and would never come back," said Jeffrey Litvack, global director of new media markets for the giant news distribution service.

Instead, the AP targeted the iPhone for its Mobile News Network, which launched in May. It also has development work underway for the BlackBerry and Google Android-based devices.

"AP made a big bet on smartphones even though they're only ten to 15 percent of the market," Litvack said during in his keynote, which kicked off the Mobile Content & Marketing Expo here. (The Mobile Content show is owned by Jupitermedia, the parent company of InternetNews.com)

One reason that the AP believes it made the right decision is that smartphones are taking off and show little sign of slowing even in the current economic climate. He said market forecasts suggest that smartphones are expected to account for 70 to 80 percent of the market in five years.

The AP is in it for the long haul, developing a user base of what it said totals millions, even as its ad strategy remains a work in progress. Litvack said the AP's challenge is complicated by its many partners: The company is working with over a thousand newspapers to provide local content, for instance. As a result, ads need to be tracked and responses accounted for in some sort of revenue share model.

"We want to be sure we have real results and that both the user and advertiser are happy," he said.

New ad models

As the AP fleshes out its strategy to focus on delivering content to high-end mobile devices, other wireless advertising stakeholders are wrestling with issues in the fast-evolving category of mobile ad models.

Mobile widget provider Zumobi, for example, measures traditional advertising metrics like click-through rates and impressions. But it also measures engagement, tracking how long and how often a widget is used and how deep users go into the application.

"We measure retention rates and develop longer-term campaigns, so we're more akin to a traditional publisher," said Zumobi's CEO Ken Willner. On the Research in Motion (NASDAQ: RIM) BlackBerry platform, users spend more than 20 minutes per day using his company's content widgets, he said.

Despite Willner's report, not everyone is having an easy time of it in the world of mobile ads. JupiterResearch analyst Julie Ask, who moderated the panel on which Willner spoke, said potential advertisers still have a long list of reasons why they won't commit to mobile platform advertising.

She said JupiterResearch found surveyed some potential advertisers that felt that mobile didn't seem appropriate for their brand or target audience. Others didn't have the budget or simply couldn't figure out the basic details of how to launch a mobile campaign.

"We're at an early stage," conceded Jason Spero, vice president of marketing at mobile ad network AdMob. "Some of this is still about taking a machete and clearing away the brush."

In a later panel, Doug Antone, CEO of Networks in Motion, said mobile advertising is often still too random, but location-based services offer great potential for more targeted offerings.

"When someone is mobile, they're motivated," he said "When you're looking for a restaurant, you're not looking for an ad for Porsche."