More Ad-Funded Services On Their Way

I’ve noticed more and more mobile network operators experimenting with ad-funded services. In the UK, 3 has just announced a deal to give its users free music videos from Sony BMG. On 20 March, Orange revealed it would offer 800,000 customers a variety of music content for free or at a discount in return for watching a few ads. Vodafone in Italy has an ad-funded video-clip service.

But why are they giving stuff away for (almost) free? I think it’s part of their plans to get more people using data services and generate more revenue. Over the last year or so, we’ve seen mobile network operators introduce flat-rate price plans and form partnerships with Web 2.0 companies in the hope of persuading people to use their phones for more than talking and texting. I see ad-funded services as another way for them to attract people to their portal sites.

Big-name brands are happy to be part of the experiment — they want to take advantage of the mobile channel, because they can engage with their audience much more than they can through traditional advertising. They can afford to fund small amounts of content in return for demographic profiles and the chance to target ads more specifically.

As more content becomes available on mobile devices, I believe consumers will be willing to watch ads if it means they won’t have to pay for music, videos and other material. Of course, the idea of something for nothing is an easy concept to sell, and I think it’ll catch on rapidly. I predict we’ll see more operators launching trials of ad-funded services. Commercial versions of these services will appear soon — not only in music and video, but in applications like games and mapping.