Tuning In to the Third Screen Frontier

There are more than 270 million mobile phones active in the U.S., according to CTIA, the international association for wireless telecommunications. Between October 2007 and October 2008 YouTube’s mobile audience grew by 277%. In the third quarter of 2008, it was accessed by about 3 million U.S. mobile subscribers.

What does any of this mean for the small and minority-owned business advertiser? Targeting niche groups using mobile TV advertising might be more precise and provide more bang for the buck.

For example, as of the third quarter in 2008, 14% of the mobile video audience was African American (compared with just 9% of all subscribers, respectively). Plus, African-Americans are 42% more likely to recall mobile advertising compared to all data users, reports Telephia, a researcher of mobile media markets.

“African American businesses will be able to compete in a way that they have not been able to without having [big] budgets,” says Aaron Walton, co-founder of advertising firm Walton Isaacson.

The interactivity of Mobile TV and video has the potential to be a “game changer” within mobile advertising, says the Mobile Marketing Association. Advertisers might be able to target ads to certain customers based on what they watch, their demographics, socio-economic profile and lifestyle. Advertisers can cull this data from performance oriented advertisements that encourage users to take actions such as “click to call” or “click to buy.”

Users will be interested in mobile video that appeals to their specific interests, says Jeff Orr, senior analyst for mobile content at ABI Research. This will provide a great opportunity to reach minority markets

“The ability to engage the consumer in that adverting experience and have their eyeballs longer is much more measurable,” says Orr.

Moreover, advertisers can capitalize on usage data by identifying when mobile TV use is accelerated. For instance, Orr says mobile video/TV usage is high in countries that offer mass transportation and where commuters predominate.

Despite projections, Mobile video/TV has its limitations. Mobile video use in the U.S. remains low (5% of all subscribers) compared to other mobile media, according to Nielsen.

“If the number of consumers that watch mobile TV is small it makes it less appealing for advertisers because they have a smaller audience to reach,” says Noah Elkin, senior analyst at eMarketer.

Nevertheless, the MMA recommends and experts agree that advertisers and agencies look to mobile video/TV to provide additional awareness or “buzz,” but not be the sole focus of an advertising expenditure.

“TVs at home are getting bigger and bigger, but mobile handsets are getting smaller and smaller. The small two inch screen is never going to replicate the experience of TV viewing at home,” says Elkin. “That is not to say that people won’t watch mobile TV. It just means the times and context of when they do it will be different.”

Your Mobile TV Options

Determining how to take advertising to the mobile TV audience can be

quite confusing, because the term Mobile TV can include several concepts including downloadable video (i.e. iTunes), unicast or streaming video, and Broadcast TV, which is transmitted to mobile phones. Each incarnation has its own benefits and challenges for advertising.

Oftentimes, because users pay for downloadable videos, advertising is limited or nonexistent. Downloadable and Unicast videos provide the user with the ability to pause, forward, and rewind programming. This allows advertisers to insert pre-roll, mid-roll, post-roll, and overlay commercials.

Alternatively, broadcast mobile TV is similar to traditional TV. The commercials in the video will be the same ads viewable on a standard television set. But ads can also be placed in the Elecronic Program Guide, a menu that features the lineup for channels.