New Mobile Ad Model

A panel at the Ypulse Mashup last week talked about teens and mobile devices. Currently, data shows that teens just can’t afford to use the fancy apps that are being created. Loopt, Socialight, Plazes… we love them, but they really require WAP to shine. Currently, only 20% of teens have mobile web. (Chandrasekar Rathakrishnan from VelvetPuffin said that half the people in line for iPhones were teens, we highly doubt that considering their pricepoint.) There has been a lot of talk about how wireless carriers have us strapped. Data plans are expensive. Switching is a pain. The networks are painfully slow, to boot.

Enter the new mobile ad model. The buzz on the panel was about using targeted advertising to subsidize the cost of data consumption. This idea has been floated for a while, but it seems more and more plausible. Making a service free is a key driver of success, especially in the youth market. Paradoxically, this demo also has the propensity to buy stuff on their phone ($3-5 for ringtones, for example).

An MVNO launching soon in the UK called Blyk will be providing voice calls for free aided by an ad model. Jim Ryan left AT&T just before the iPhone launch for a startup called MobileCampus. The service, which lets schools update student with texts, runs entirely on highly targeted ads.

Studies of mobile advertising show that teens actually don’t mind it if it’s targeted and relevant. UK-bases Q research reports:

Only 32% of the 11-20 year olds surveyed told us they would be happy to receive advertising messages to their mobile phones. However, these numbers more than doubled when we asked them if they would like to receive advertising messages targeted to their particular interests - 71% agreed.

As Sam Altman from Loopt pointed out, the key is to make ads like content. This echoes a refrain from the conference’s teen panel to provide them with something useful. Marketers, just don’t take your cue from these guys.