Cellphone and media companies expect to see a sizeable market for advertising on cellphones in coming years, with options including advertising-subsidised video services, top executives said on March 1.
Viacom Inc, which runs MTV and Comedy Central, is working with major operators, and plans to play a major role in the first trials of mobile ads in the next year.
Sprint Nextel Corp, the No 3 US mobile provider, is keen to offer subsidised wireless videos and local ads to cellphones.
"There's no question that advertisers are interested," said Viacom Chief Executive Tom Freston, speaking in New York at the Reuters Global Technology, Media and Telecoms Summit.
Freston said Viacom, which works with about 70 cellphone companies around the world, is talking to "various" operators about details of how advertising could work. He believes mobile video ads would have to be very short to succeed, and would depend on customers allowing them in exchange for deals on their cell phone.
"What amount of advertising are they willing to accept in exchange for lower fees," he said.
As it aims to boost revenue with new features like video, Sprint Nextel is also looking at technology and business models around providing advertising to people using these services.
Sprint Nextel's chief technology officer Barry West pointed to the possibilities for sending information such as special offers at a local Italian restaurant to phones that can pinpoint the user's location.
"The whole advertising world has a new mechanism to reach their customers. You can hone in on customers in your area," said West, who was also speaking at the summit.
Sprint could also offer its cheaper mobile video services if an ad is included, its Chief Financial Officer said.
"There are some people who would be willing to have their services subsidised," Sprint CFO Paul Saleh said. Sprint will work on cellphone advertising in the next couple of years.
Advertisers are also keen on the prospects for putting ads on cellphones and particularly via mobile video services.
"It's a major opportunity." Martin Sorrell, chief executive of WPP Group Plc, the world's second largest advertising and marketing company, said at the summit.
Sorrell said the methods of measuring how many people see the advertising have yet to be determined, but that measurability was a key attraction.
"People will experiment," he said. "They won't make the decision to put millions of dollars in it (immediately). They'll make the decision on an exploratory basis."
Asked when it would become mainstream, he answered, "Quickly."
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