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Big Ads for Small Packages

Apr 2, 2007  •  Post A Comment

NBC Universal plans to start selling ads for its mobile video programming when the upfront kicks off in May. That’s the latest piece of evidence that the once-scoffed-at business of TV on cellphones is gaining momentum this year.

“We are committed to the marketplace and we have to put our money where our mouth is,” said Salil Dalvi, general manager for wireless platforms at NBC Universal. Last week, NBC launched prime-time programming such as “Heroes” on mobile phones from MobiTV and Verizon’s MediaFLO service.

Also, MTV Networks said last week at the CTIA-The Wireless Association’s conference in Orlando, Fla., that it has inked deals with Pepsi-Cola and Intel to sponsor MTV and Comedy Central mobile channels, the first time MTV has sold ads against mobile content.

NBCU’s and MTVN’s push into mobile advertising, coupled with their increased content output for mobile TV, suggests that the twin business models of license fees from carriers and advertising are gelling for mobile TV.

The market for mobile advertising in the United States last year reached $421 million and should grow to $4.8 billion in 2011, according to market research firm eMarketer.

The number of mobile video subscribers in the U.S. grew to 6.2 million by the end of 2006, up from 2.5 million at the start of the year, according to mobile research firm Telephia.

Also last week, MobiTV inked a deal with Yahoo! for the Web portal to place ads against MobiTV’s video programming. Other mobile video news came from made-for-mobile TV programmer GoTV, which landed strategic investments from Qualcomm and Motorola, and Nickelodeon, which will offer mobile TV content on the mobile TV service Amp’d Mobile next quarter.

This activity should grow the market for mobile TV to double-digital penetration of mobile phone subscribers by the end of this year, up from low-single-digit penetration today, predicted Adam Guy, wireless analyst with research firm Compete.

Mr. Dalvi said NBC will experiment with a range of ad options, from 30-second spots to store locator ads that let users input their ZIP Codes. “We want to learn effectively what gives advertisers a friendly place to put their ads,” he said.