After many recent premature forecasts that mobile would be the next great ad medium, it's finally starting to take off as viable business. Research company eMarketer pegs 2011 growth in the sector at 48% to just over $1.1 billion. And while that's a fraction of the overall $150 billion-plus U.S. ad economy, significantly more growth is expected soon, as consumers quickly gobble up the latest tablets, smart phones and other portable devices. Revenues will double in the next two years per eMarketer.
Just how much of the mobile business is controlled by national TV networks is unclear, but most estimates are that it's a small percentage. "I would agree that the TV networks are generating far fewer dollars than the major [mobile] ad networks," says Heather Way, research analyst at Dallas-based Parks Associates.
Still, as consumer usage of mobile platforms escalates, some networks are making serious efforts to develop mobile content in a bid to grab a bigger piece of the medium's growing ad pie. Two months ago, for example, CBS and Turner, co-rights holders of the NCAA Men's Basketball Tournament, streamed every March Madness game to multiple mobile channels including iPads, phones and PC laptops.
And Way says those efforts will continue as networks seek to not only "form deeper relationships with viewers," but also serve marketers with new types of customizable and interactive ads.
Buyers expect mobile to play a bigger role in this year's upfront as they push more aggressively for multiscreen video deals, says Amanda Richman, EVP and managing director of digital for MediaVest. "We're looking at it much more fluidly," she says of the upfront process, with agreements focused on "video across any platform and any device."
Among emerging ad platforms, mobile is of particular interest to marketers, adds Richman, because it is being used increasingly by consumers to locate products, compare prices and make purchases-all of that in addition to accessing content.
The mobile space is well suited to sports and news and information outlets where users turn frequently throughout the day for updates.
And while mobile revenues are still relatively small, some networks are seeing big growth in the sector. At E!, the entertainment news and information network, John Najarian, EVP, digital media and business development, says mobile revenue growth is keeping pace with the overall industry. "Is it material to E!'s revenue? No, not yet, but the growth has been phenomenal," he says, calling it the fastest-growing segment at the company right now.
Love them or hate them, Keeping up with the Kardashians has proven to be one of the network's most popular mobile apps, along with one featuring Red Carpet content. Currently, E! has five million unique visitors to its mobile sites each month. Revenue growth will accelerate, says Najarian, as ad units become standardized. "There's a lot of experimentation and it will take time to work itself it out," he adds.
The so-called "Mobile Upfront" in New York is designed to help. The gathering isn't so much a marketplace, as a daylong series of panels featuring agencies, clients and vendors offering advice about what works and what doesn't, based on their own experiences.
ESPN has been in the mobile space for over a decade, with sports score updates and more recently live coverage of games and other content, including college football and World Cup soccer. During this year's bowl coverage, auto maker Chevrolet sponsored a contest on the network's College Bowl Mania mobile Website where viewers picked the winners of more than two dozen games. Like Mediavest's Richman, Lisa Valentino, VP/digital sales, ESPN, says the network "thinks about a video offering. We're trying to reach the broadest swath of core fans across as many devices as we can." The network reaches between 14 and 15 million unique visitors to its mobile platforms each month, she says.
Perhaps not surprisingly, given all the big news stories this spring, CNN is seeing a lot of growth on the mobile side of its business. During the first 10 days of coverage of the destruction in Japan, the CNN apps for iPhone, iPad and the Android tablet reached more than 1 million downloads. And in the first quarter of 2011, the network's mobile revenues were quadruple what they were the same period a year ago.
According to Greg D'Alba, executive VP and COO, CNN Sales, Marketing and Operations, categories that have stepped up in the mobile space include autos, energy and tech-related companies. One prime example is Lexus, which has been the presenting sponsor or co-sponsor of several CNN phone and tablet apps.
"The companies that win will be the ones that can stake their claim to video everywhere," says D'Alba. And with consumers increasingly on the go, marketers and media companies alike should continue to pour more resources into the mobile space.