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Has the mobile industry stumbled on the killer app that it had just agreed to agree doesn't exist? Certainly, from Shozu to Ovi, it was the hot topic of 2008

Right back in February, when Yahoo! announced the second of its One range of mobile services – this time a presence enabled messaging service that put your SMS, email, IM and social network conversations all in one place, categorized by user, not by "Service" –  things seemed to be pointing to social networking as a key driver for the year.

February: Marco Boerries, head of Yahoo!'s Connected Life programme, demonstrating the service, showed how users can view their contacts by name, by activity, by accessibility and by proximity.Boerries said that although users can download the client direct to the handset, or access the service through their web browser on the handset, Yahoo! remains committed to working with operators, and is not seeking to bypass the operator.

"We are a company with a proven record of long term partner relationships," he said. "When we partner with a company we benefit in terms of discovery and navigation, and the whole market grows for everyone." He also said that although Yahoo! has to give back a share of ad revenues to operators when it partners with them, it still remains in Yahoo!'s interest to seek out partnerships.
A second major announcement in this area was one of Nokia's first under its OVI brand, beyond its already announced music service.

February: "Share on Ovi" is a Flickr meets YouTube meets social networking file storage and sharing application, under which users can build a personal homepage, either using Share itself or dropping in other services, such as Flickr. Over 100 file types are supported, and the service is available from any web browser. But Nokia has also developed a client specially for N Series devices that will give an enhanced ‘Share' experience. This looks like a bit of a tie-in then to sell more devices attached to the service, but as Nokia is at pains to say that the service was all about being open, this is perhaps a slightly mixed message.

As for that old canard, Nokia's relationship with operators, Kallusvuo said that Nokia and mobile operators, sharing a common mobile background, make obvious partners, and he thinks they are still natural partners. The cake's plenty big enough for everyone to have a slice or two, he said.
Niklas Savander, vp software and services, said that Nokia has decided that it will go to market quickly with OVI, and that inevitably there will be some holes in the service, but he thought the priority was just to get the service up and running, and then perfect them later.

Despite the big names entering the field, there were other players who werelooking to tie the most important information on our phones, our contacts and addres book, into other social contexts.?
March: "Zyb is a company that has conducted research that suggests we keep the contact information on the people most important to us – our closest friends, family and close business colleagues – on our mobile phones.  With that  in mind, the Zyb Social Phonebook provides "new ways of staying in touch with the people you really care about".  This includes letting users see availability information on a contact they are about to call – so they may hold off on that late night call to avoid waking the other person up, for example.  More interestingly, perhaps, and mirroring Yahoo!'s approach, is the ability for those users who want to stay in even closer touch with their friends, to be able to receive aggregated activity streams from other online services as well as getting direct access to their profiles on these services (e.g. Facebook, Twitter and LastFM)".

The likes of Colibria and NeuStar, predominantl messaging companies but with a grasp of the SIP client and the messaging interface, realised quickly which way this was headed.
December: "Colibria, a provider of messaging and social networking solutions, has today announced the availability of a new Social Network Gateway, to support the growing consumer demand to be constantly connected to their social networks whilst on the move.

The new solution is said to provide a simple enhancement to an existing mobile IM client that enables the user to access the plethora of social networks from within a single application on their mobile handset.

The Social Network Gateway will also integrate with a mobile phone's contact list to provide the user with complete visibility of the ‘social communication' of each individual within their contact list. The solution also allows mobile users to control how and when they are updated on the activity within their social network."
 

Yet despite these advances, and the hope that social networks plus presence on mobile could equal a real earner, we heard that it's possible that operators everywhere are missing the point about social networks.

November: "Norman Lewis, of Wireless Grids, points out that operators have traditionally misunderstood the motivations of their customers.

"Why do people make phone calls? When I worked at Orange, I asked this question, and nobody knew. Operators need to start looking to the social meaning of communication interaction, and not their function. The business models for telephony need to extend from what happens during a call, to what happens before and after call."

Lewis' point is that by thinking of social networks as some markedly different or "other" type of communication, operators risk misunderstanding their customers, and hence risk missing the chance to profit from the services their users are using.

For Lewis, users of social networks are really just defining themselves in the same way that youth, especially, have always done. They are forming groups of like-minded users, expressing and forming their identities in ways they have always done. It's just that the platform for doing so has changed.
"When I presented this to the Orange board, the question was, "Should we launch a teen portal?" And I just lost the will to live."

Lewis says that operators need to make their users not the recipients of advertising, but the originators, and recommenders, of it. Grinding down the road of trying to make money from a model that is already proven to lose money is not the way."

The vision of inter-operator mobile instant messaging may be a story for 2009, but in 2008 it was all about the IM communities getting mobilised, chat, and mobilising updates to social networks.  Oh, and Nokia got involved too

Exactly what Mobile IM services are up and running with mobile operators, asked Tony Dennis in our September issue? It was a decent question to ask, given that the year had seen a plethora of service announcements across Europe – most of them about mobilising online IM communities.

In February the major IM server and handset vendor software vendors were talking of context-aware messaging. And the GSMA was talking about its PIM Initiative.
But we wondered if the operators were listening.

March: "Yet in many countries, as Mobile Europe readers will know, mobile operators have side-lined their home grown "on-network" instant messaging applications, preferring instead to support existing offerings from Internet players such as Microsoft and Yahoo.

"One of the few exceptions to this is Italian operator TIM, which launched Alice Messenger 18 months ago and is now seeing the service gain some traction.

"Alessio Derme, senior product manager, marketing consumer, at TIM, told Mobile Europe last month that his company remained committed to the GSMA PIM initiative, and that TIM wished other operators were too.

"The key benefit of PIM, as Derme sees it, is that it will bring interoperability between operators.
"We can't give our users an interoperable interconnection with other networks," said Derme. "It's something that we would like to change."

"Turkcell's ceo of value added services, Cenk Serder, was making the point that in Turkey, where there are millions of Windows Live Messenger users, there is little point in trying to start up a specific, mobile operator focused service.

"We're the pioneer of IM, and actually started with a PIM based approach back in early 2006, but we changed horses at the end of 2007, and the reason is that it brings more internet services into play." Serdar said. "It's hard to ride against the tide, and MSN usage in Turkey is the third largest in the world, with 23 million accounts. MSN is so widespread that it was very hard to start something else and that's what we saw over the last two years." And Turkcell is not alone in Turkey in targeting those 23 million MSN/ Windows Live users with a gateway product.

September:  The debate has moved on, but only by a little.
"Guy Reiffer, product marketing director with Colibria, makes a similar distinction. "Currently there are two options available for mobile operators, Mobilised Internet IM Gateway services and operator ‘own brand' MIM services," he argues. "With Mobilised Internet IM Gateway services, operators are able to provide subscribers with complete access to an existing Internet IM service, such as Windows Live Messenger, Google Talk or ICQ. This option enables the operator to leverage the brand awareness of a chosen Internet IM brand. However, it does mean that the operator is potentially restricted by certain business models and branding factors."

According to Scott Stonham, vp for product marketing with IM specialist, Miyowa, the prominent ISP-based  IM service appears to vary markedly depending upon geography. Microsoft – with its variations of Windows Live Messenger – appears to dominate in Western Europe, whereas in Eastern Europe ICQ is most prominent. Yahoo! holds market leadership position in Asia, whereas in Western Europe it is running a close second. Stonham puts these differences down to which brand has achieved the best 'mind share' amongst the existing fixed line community of IM users.

There's one obvious solution to this dilemma. At OZ Communications, Michel Besner, a senior vp of marketing points out that, "OZ has successfully deployed Windows Live, Yahoo Messenger, AIM and ICQ services, all of which can be accessed and used simultaneously from inside a single client application." By contrast, Miyowa's Stonham revealed significant part of the specification process which occurs when mobile operators come to his company for IM client software. He maintains that the majority of operators start off by asking for one client which can handle all of the major IM services. "After time – for a variety of political commercial and technical reasons – this requirement usually dwindles down to a request for just one IM service to be covered – on a toe in the water basis," Stonham explained."

By the end of the year, with Nokia now owning OZ, and pouring some of its technology into an enhanced Messaging proposition, the concept of native, presence-based messaging from a unified client was a little, if only a little, closer.

December: Nokia is integrating PC-based webmail services within Ovi with Nokia Messaging for mobile by launching Nokia messaging along with Mail on Ovi.
Nokia Messaging mobilises consumer email services for users of most Nokia phones and webmail services, the company says. But IM is not set to be enabled until the second half of 2009.

Interestingly, Nokia also hopes to have the service supported by operators so that data plans will include Nokia Messaging – without the operators making any additional service charges for mobile email or IM access

For some operators, this will not be attractive, as it risks driving users away from the operators' "own" communities. But for others the attraction will be the Nokia Messaging, if it works as easily as Nokia is saying, will drive consumer adoption of data tariffs.

It kind of started and ended with Nokia, although there was a lot else going on as well

It was a tale of one city, two announcements, from Nokia, as it used Barcelona as the background for two significant LBS announcements. The first came in February, as it announced Nokia Maps 2.0. Here is how we reported it:

"Nokia came with two new services and four handsets. Services first: the first was a second version of Nokia Maps, which adds pedestrian navigation (that's pedestrian as in people walking, not as in 'slow') as well as geo-tagging.

Geo-tagging is a term that describes the automatic addition of GPS co-ordinates to photographs, so that they can automatically be attached to maps, or just display their location. The pedestrian application looks a bit like an in-car version, except it is for people walking about. The service is available on Nokia Beta Labs now. Nokia says it will sell more GPS enabled devices this year than the entire personal navigation devices market did last year – so that's an indication of how important Nokia thinks location and mapping has become. The reason is the company is gunning for 'context' aware services, that combine place and time with services.

The operators will like this, of course, as they are the ones with the network info Ðalthough of course with GPS they are not in control. It remains to be seen, though, if GPS will be enough. What if your 'context' is that you are in a basement bar? How's the GPS fix going there?"
Then, as you may have seen on our news pages, Nokia returned to Barcelona to bring us Maps 3.0, and also put mapping onto Ovi.

"The services take the vendor into a head-on fight with Google and other web-based service providers for mapping, navigation and messaging services, as well as extending Nokia's competitiveness with mobile operators keen to do the same.

Nokia says the combination of Nokia Maps plus Ovi is the first free service that allows people to synchronise PC mapping with their mobile. It has also enhanced the Nokia Maps service to include high-resolution aerial images, 3D landmarks for 216 cities and terrain maps, as well as a new route overview within Drive, its paid-for navigation service."

But although Nokia, leveraging its acquisition of Navteq, may have dominated, it wasn't all about one player, or indeed all about navigation. There was focus on other applications.  as David Adams wrote for us in September.

"ITV News is considering using LBS provide mobile users with a certain amount of local news, content determined by knowledge of the user's location, even if the user is not actually conscious of this information being passed to the service provider.
Google's strategy is not driven by a desire to compete directly with the most accurate LBS. "Any operator can, in principle, implement a more accurate solution provider, and there's no reason they can't charge for that," says Wiles. "The important point is we're making it easy for users and developers to use location."

OPERATORS UNSURE
But still the mobile operators refuse to get swept away by all this enthusiasm. There have been some interesting developments over the last 18 months, including Vodafone's Telmap-based Sat Nav application, launched in the UK for users of the BlackBerry Curve 8310 at the end of 2007, but in the main they have remained cautious.

Fergal Walker, director of product management at 3, outlines a fairly typical operator's perspective. "There are two main reasons why LBS hasn't taken off as quickly as people expected," he says. "Firstly the GPS model – people are interested in navigation and specialist applications so there hasn't been a demand for LBS. The second is around privacy. People are very concerned about revealing their location. Unless the industry can find a way to reassure people that the customer can remain in control of information about their location it is going to remain a barrier to uptake."?

Bill Barnes, general manager for location products at middleware provider Openwave, believed it might be worth considering some slightly more abstract ways that mobile operators could seek to monetise some aspects of the data that handset tracking offers. "Where [operators] can track their subscribers in an anonymous way and offer some of the data they get about mass user behaviour to somebody else they'll have a set of data that is current or accurate at the time, as opposed to predictive or historical," says Barnes. "I'm sure there will be some creative things coming through connected to that. It's not going to generate millions, but it will be something they can use to generate a return from the investment they've made."

But there was keen interest in two deals that Geosentric pulled off with Garmin and Nokia to deploy its Gypsii technology.

"Garmin anticipates that future products will include friend finding applications that support the GyPSii-powered location-based social networking services platform."

As for Nokia, Gypsii was incorporated into the Nokia 5800  XpressMusic phone.
"GyPSii is ideally placed as the leading innovative application that incorporates social networking and communities with location-aware features – in particular, the ability to provide a location and social graph context to any media captured on the device. GyPSii's ability to deliver a touch screen experience in one integrated application is key to the Nokia Touch device customer," said Jure Sustersic, Business Development Manager at Forum Nokia EMEA.

WIFI
But there is one company that thinks it has another way to stitch together location, as we heard in August – the company is one of a few that is mapping  WiFi hotspots as a means of providing a location fix.

"This company is using WiFi to provide location. How? Well, it keeps a dynamic database of all the WiFi hotspots and access points it can lay its hands on, by conducting drive-through surveys. It then gives each access point a precise location. So when a user turns his iPhone, or any other WiFi enabled device on, it is able to provide a location based on the WiFi zone it is in. The company is called Skyhook, and its ceo Ted Morgan says he thinks WiFi location can provide the missing link in the location world.?  Skyhook has already mapped over 16 million Wi-Fi access points in Europe, and now provides coverage to over 130 million people in Europe.  "Skyhook's European expansion is an important step towards our goal of delivering consumer-ready location across any environment, indoors or outside," said Ted Morgan, CEO of Skyhook Wireless."
Location, then, seems to have arrived. Now it is, finally, going to be all about developing further applications.

Has it been all bad news for mobile TV? David Adams searches for the successes in 2008

This time last year there were high hopes that 2008 would see significant progress for mobile TV in Europe. Those hopes have not been realised. The most high profile event of the year was probably a bad news story: the demise of MFD [Mobiles Fernsehen Deutschland]'s DMB-based service in Germany, finally withdrawn after struggling for the best part of two years to increase viewer figures, and as MFD shifted its strategy towards DVB-H. The one big success has been the continued growth of 3 Italia's DVB-H service, cunningly launched on the back of the 2006 football World Cup (won by Italy), which now has more than 850,000 subscribers and has added a free to air bouquet to its pay TV offering. Progress elsewhere in Europe continues to stutter, for technical and economic reasons.
Yet technology specialists remain positive, suggesting that while there may be technology and business model issues still to iron out, 2008 was a year when important lessons were learned, technical innovation continued at a rapid pace, and more of the supporting elements that could support mass market services fell into place.

"Despite the bad news the underlying trends for mobile TV still register strong positives," claims Dr Kamil Grajski, president of the FLO Forum. "There is optimism in the air: as people get used to browsing the web and consuming video and music on their mobile devices, they set the stage for TV and other richer content in the not-too-distant future. It's certainly a question of when and not if for mobile broadcast TV."

Dr Claus Sattler, managing director of bmcoforum (the Broadcast Mobile Convergence Forum), is similarly positive. "I would say one of the highlights of the year would be that more European countries, like Switzerland and the Netherlands, have started to use mobile TV," he says, pointing also to progress in Hungary and Poland in preparing the ground for services, and suggesting that even if there have been disappointments in Europe, the progress of mobile TV elsewhere in the world, in particular in Asia and South America, has maintained its momentum.

Yann Courqueux, director of broadcast development, IPTV and mobile TV at Thomson, is optimistic about the potential of the Russian market, where three operators are set to launch services in 2009. "That's a very active market, because they're vertical operators, unlike in European countries, where we see many players in the value chain," he says. "It's a model that is easier to put in place, because you don't have endless discussions between players. I expect mobile TV to be very significant in Russia."

Throughout 2008 the same basic factors continued to be responsible for slowing the pace of development and adoption in mobile TV: ongoing technical issues relating to the various competing standards and a lack of spectrum space, the potentially negative impact of national and EU regulation, and continued uncertainty about which business models will actually generate revenue.
On the technology side, supporters of DVB-H and DVB-SH feel 2008 was the year when their standard established a clear lead over its rivals. Alain Ferasse-Pale, vice-president, marketing and sales, Alcatel-Lucent, cites the 3 Italia service, along with progress with DVB-SH, currently being assessed by the Italian and Indian regulators, and the focus of trials in Italy, France and the US. The great hope for DVB-SH is that it can both reduce costs and improve coverage through greater efficiency and the use of satellite. The launch of a new satellite in 2009 that will support S-Band deployments of DVB-SH will help.

Naturally, the FLO Forum's president has a different view. "In the medium term, the realisation that capacity – spectral efficiency – is pivotal to broadcast TV's success has seen a review of the different technologies on offer," says Dr Grajski. "This is of critical importance in Europe, where there is much greater pressure on the amount of spectrum available from country to country. MediaFLO, operating in an 8MHz channel, can deliver 30-plus channels streaming video at 25 frames per second [using QVGA]. So a ten channel free-to-air requirement still leaves up to 20 channels for subscription-based services, or data and interactivity services."

Jon Hambidge offers another view. He is chief marketing officer of NextWave Wireless, the key technology partner in  a forthcoming trial of mobile TV services in London, backed by Orange and T-Mobile, which will use TDtv, a UMTS TD-CDMA MBMS technology which runs on 3G spectrum. "We've seen a surge in interest in the last few months, as people start to understand the economics," he says. "We think that across Europe the idea you can use your 3G spectrum to provide mobile phone TV is really gaining traction. I've read articles about DVB-H in France, and the cost of building that infrastructure, which will cover 30 per cent of the population, and mobile operators are being asked to provide 87 per cent of that number. We think they could do that with 3G at a tenth of the cost.

"This spectrum is unused, it's just sitting there. I think a lot of people have become disillusioned with mobile TV in 2008, but if you can get the economics right and make it a seamless 3G service we think we've got a better business case than ever."

Of course, most consumers are currently blissfully unaware of these issues. What they will have noticed during 2008 has been the appearance of a new generation of handsets and mobile devices, including the Nokia N96 and the BlackBerry Storm. "Another interesting step forward is the fact that more and more mobile TV-compatible devices have become available, along with accessory devices which take a mobile TV stream and put it out over WiFi or Bluetooth," says Omar Javaid, vice-president of business development at Qualcomm. These include PacketVideo's Mobile Broadcast Receiver, which can stream mobile TV to devices which aren't mobile TV-compatible, like the iPhone and the iPod Touch.

Another service that some believe will be crucial to the prospects of mobile TV in the longer term is DVR capability, but there were no significant steps forward in this area in Europe during 2008. Here again, technology issues may not be as problematic as the need to find an effective business model.
"We are waiting to see how successful business models based on downloads or streaming of on demand content taken from libraries are, compared to broadcast models," says Andrew Bud, global chair of the Mobile Entertainment Forum (MEF) and executive chair of the mobile transaction network mBlox. "Some people suggest that on demand models for video are reliant upon either the availability of flat rate data plans or of sender-pays data models from the carriers. Otherwise the costs are frightening to consumers."

Finally, there is the evolving regulatory environment. Licensing and spectrum availability issues remain unresolved, and there may be further trouble ahead in the shape of the EU Audio-Visual Media Services Directive (AVMS). "AVMS may impose some quite strict legislation designed for broadcast on a medium that is completely new," says Andrew Bud. "Our concern has been that AVMS legislation does not strangle mobile TV at birth. The MEF has been at the forefront in both explaining that to the industry and interacting with Brussels in trying to moderate its impact on mobile."

But Bud doesn't think the disappointment of 2008 can be blamed on regulators or on squabbles over technology or business models. "I think that there was no prospect whatsoever of mobile TV being a big success in 2008, so any disappointment is purely related to unrealistic expectations," he says. "I always felt that mobile TV was suffering from the classic hype curve."

He thinks it will be at least two more years before we begin to see mass adoption of mobile TV across Europe, and hopes the legacy of 2008 will be a little more realism about how long it will take for mobile TV to live up to its potential: "People have come to understand we're at the dawn of a new medium, and there's going to be lots of hard slog ahead for companies that want to earn money out of it." We'll have to wait and see whether 2009 brings a bit more good news.

Changes in customer behaviour as well as more targeted campaigns, drove mobile advertising growth in 2008, says David Adams. And there will be more to come in 2009

Overall, and particularly when one considers the wider economic context, 2008 was a good year for mobile advertising. There were some eye-catching campaigns, useful innovations in technologies and business models, and important developments in establishing effective methods of measuring success. Advances in handset technology provided further encouragement. And among the striking examples of the power of mobile as a marketing channel that could be seen in Europe and further afield, were the campaigns that helped galvanise American voters to elect a new President. 
Analyst predictions about this market differ only by degrees of optimism. By 2011 mobile advertising will generate $14.4 billion of revenue, and account for a fifth of global internet advertising, according to Strategy Analytics; while Informa Telecoms suggests that the global mobile advertising market will be worth $12 billion by 2013.

The Mobile Marketing Association's Global President, Laura Marriott, says, "2008 has been year of growth for mobile marketing. More and more brands are actively evangelising the use of mobile as a marketing channel, and in 2008 we've seen them working with many other MMA stakeholders to contribute to the guidelines and best practices that govern our industry."

Many of the biggest players in internet advertising, like Google and Yahoo, could be seen visibly warming to the mobile channel during 2008. There was also evidence that longer established corporations were taking mobile more seriously: Alex Moukas, CEO at mobile marketing specialist Velti, claims clients that were spending £25,000 to £50,000 per month a year ago are now spending five or ten times as much.

Charles Sword, director of mobile monetisation for Connected Life at Yahoo Europe, believes these changes have been driven in part by the growing mobilisation of social networking. That has helped increase mobile web usage significantly, as illustrated by a huge upsurge in the use of Yahoo Mail and Messenger on mobile, which doubled in the first nine months of 2008.

"A lot of agencies have been a little sceptical, and these numbers are beginning to change their perspective," he says. "We've seen a much greater level of participation by brands, and more repeat business. But it's the change in customer behaviour we've seen this year that is really fundamental to the opportunity for mobile advertising going forward."

Sword also notes technical improvements and key moves in corporate strategy which have boosted mobile advertising within Yahoo, such as the implementation of Mobile Marketing Association (MMA) specifications for ad content, and the development of advertising relationships for search and display with major mobile operators, changes that make using the same advertising material in different places much easier.

Marriot says that a desire to achieve an improvement in the quality of the user experience has been evident in 2008.

"As we look back at 2008, , we have seen all players striving to strike a balance between increasing reach and improving the quality of the mobile marketing experience.  Traditionally, the focus was about trying to achieve a high volume of click-through and interaction with consumers via the mobile channel. Now, operators, brands and digital agencies alike are focusing on the quality of this interaction, and are working on building sustained dialogue with consumers," she says.
Throughout the year, imaginative campaigns demonstrated that advertisers are learning to exploit the flexibility of the mobile channel. Sword highlights the summer campaign for the Warner Bros film The Dark Knight, which included animated characters from the film taking over parts of the Vodafone Mobile home page. He also picks out a Yahoo campaign for the Citroen C5 which highlighted how mobile can spur consumer engagement through the use of demographically targeted banners and interactivity.

Elsewhere, the MMA award-winning ‘Get In There' campaign from Lynx employed various downloadable mobile applications that used sound in a variety of ways to amuse a target audience with suggestions on how to impress members of the opposite sex.
Alex Moukas says he sees evidence that advertisers are starting to understand the role the mobile channel should play in integrated multimedia campaigns. "A lot of people view [mobile advertising] as an additional brand awareness channel, but in our mind you should use TV for that, and mobile is about targeting, interactivity and measurability," he says.

He cites a Velti campaign for Johnson & Johnson that began in August 2007 and ran throughout 2008. In the mobile arm of the campaign pregnant women were asked to text their due dates to a shortcode, after which they were sent information and offers corresponding to the stage of their pregnancy. The campaign had a month on month growth rate of 250% in the first six months and only a 9% drop-out rate.

"The Johnson and Johnson campaign is interesting because of the use of integrated media and the retention rate," says Moukas. "If people are willing to participate in marketing campaigns it will be because of what's right for them, as opposed to what's right for the operator or the brand. Mobile interaction has to be up to the consumer."

Another key technology theme of the year was an increased use of widgets, mini-applications that can be used in several different ways within smartphones. "A widget provides a direct benefit to the user, so it's about finding ways that we can associate the brand with that utility," says Charles Sword. He suggests the hypothetical example of pollen count forecast services provided in association with hay fever medication. Yahoo has already used a widget virtual bartender who offered cocktail recipes as part of a campaign for Smirnoff.

Amobee's Patrick Parodi can also see scope for more use of downloadable games as a medium for advertising and marketing. "We're now seeing developers and operators engaging in a model where you reduce the prices of these games in return for the embedding of ads," he explains. "You have inherent in this business model an incentive to make a better game: you get more revenue per play, not per download. And because the ads are tied to the number of times the game is played and can appear several times, the overall revenue is higher."

SMS?the potential winner?
The year also saw solid progress on the Ad-funded Mobile Entertainment (AFME) reports being produced by the Mobile Entertainment Forum (MEF), with support from Alcatel and Amobee. These reports are intended to help the mobile entertainment and advertising industries work together more effectively, and form part of ongoing work by the MEF that aims to discover how significant mobile advertising is going to be in future.

Meanwhile, despite the development of impressive new technologies, the humble SMS remains the most important tool in mobile advertising. The virtue of its simplicity, consumers' familiarity with the technology, and the fact that it can be used on any handset are helping SMS campaigns flourish in a number of European countries. In Switzerland, Orange ran a trial using Amobee technology in which advertising content was embedded in left over space at the bottom of inbound texts received by consumers who had opted into the scheme in return for a discounted service. "The results were very positive," says Patrick Parodi. "We believe that SMS peer to peer has the potential to be the best form of mobile advertising in reach and efficiency. It has the potential to be what search has been to the web in pushing forward ad revenue."

If mobile advertising is going to exploit the mobility and flexibility of the technology to the full, there will have to be a change in the types of goods and services that can be purchased using mobile devices. "The mobile entertainment industry is still probably the only industry that sells significant amounts of content via the mobile phone," says Andrew Bud, global chair of the Mobile Entertainment Forum (MEF) and executive chair of the mobile transaction network mBlox. "Until other industries become active in actually selling things over the phone the opportunity for pay per click [advertising] buyers to come into the market is strictly limited."

Charles Sword believes the important change will be a stronger link to mainstream retailers. The development of mobile phone-based payment systems based on NFC technology would help, but for various reasons that's unlikely to be a mass market proposition for a few more years in most European markets.

Even so, it's hard to believe mobile advertising does not have a successful future. "Everyone knows mobile is central to peoples' lives," says Charles Sword. "I think there's been an unfair degree of scepticism about how much people are using [mobile internet]. With the advent of things like the G1 phone, the BlackBerry Storm and the iPhone, the penny's dropping that this really could fundamentally change the way people engage with media." Recession or no, mobile advertising is definitely an area to watch in 2009.