Mobile phone soon free with advertising?

The mobile operator Vodafone starts a test in England in which Yahoo! will deliver image advertising for the mobile Internet. In return, mobile surfers will receive reduction on their data costs. Google boss Eric Schmidt thinks that in the long term, mobile phones can become free by publicity. Recent research by the IAB and Insites has shown that also mobile users in Belgium are open to the idea of receiving mobile advertising in return for a reduction on their invoice. Will the mobile phone soon be completely subsidized by advertising revenue?

Vodafone and Yahoo! are testing together mobile advertising services.

At the presentation of their bi-annual statistics early November 2006, Vodafone announced to start a test together with Yahoo! To make the mobile internet more attractive. In the first half of 2007 the companies are organizing a pilot for both consumers and advertisers.

Advertisers get the possibility to show image advertising on certain parts of the Vodafone mobile data services, such as the portal site Vodafone Live. The telecom company is explicitly keeping the option open to also integrate this advertising possibility in games and mobile TV.

Users that see the advertising receive a reduction on their data costs. However, clients of the mobile provider have to explicitly agree to receive advertising on their phone screen.

Also the Belgian consumer is open for mobile advertising.

Recently IAB Belgium asked Insites to map the Belgian mobile users in the study ‘Belgian Mobile Mapping’. This appreciated initiative brings a first and elaborate analysis of the use of the mobile phone in Belgium as well as the expectations and perceptions of the users.

One of the most striking conclusions is that a third of the Belgians is interested in receiving sponsored information. This can be useful messages content-wise such as traffic information, news items, weather reports or a commercial message such as a reduction coupon.

Phones free by advertising?
The model that is being tested by Yahoo! and Vodafone also seems to exist elsewhere in the internet and telecom branch. Separately from the Vodafone announcement, Google boss Eric Schmidt expresses similar thoughts. Schmidt recently told Stanford MBA students that mobile phones should actually be free of charge. Users of mobile devices should in return accept advertising.

Schmidt assumes that users will soon be using their mobile device 8 to 10 hours a day, to surf, to call, to send sms, to mail and to manage personal data. In this situation a business model based on advertising revenue can be profitable.

But the bi-annual statistics of Vodafone prove that such phone use is still futuristic. On average, Europeans call ‘only’ 150 minutes per month. That is about 5 minutes on average per day, only 1 percent of the amount mentioned by Schmidt to profitably deliver free phones.

Seems that making the mobile phone completely free based on publicity income will have to wait a bit. Focused initiatives to partially subsidize content will soon follow in a Belgian context as well.

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  • Comments (1)
    • Anonymous
    • December 11th, 2006

    A lot of people have come up with such ideas in the past and they didn’t work lack to close minded operators here.

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