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Apps hot right now, but mobile Web will win: digiday panelist

NEW YORK - Will applications finally monetize mobile media and marketing from the years of hype, big promises and frustrating potential? 

That issue was deliberated on by panelists during the digiday: Mobile conference yesterday in New York?s W hotel on Lexington Avenue. The experts discussed what the future really holds for the mobile application and if there is a genie in the bottle.

?The application did not save mobile advertising -- it just significantly enhanced the opportunity,? said Eric Litman, CEO of Medialets, New York. ?What we have seen in the past year-and-a-half is a viable distribution model and significant uptake by consumers.? 

The opportunity is that consumers now know that their mobile phones can be used for much more than just making voice calls. They can now download, browse the Web and send SMS and MMS messages.

Indeed, there has been a significant adoption of smartphones, empowering consumers to do more with their mobile phone. This phenomenon has attracted marketers, the panelists said.

Lowdown on downloads
Applications for phones such as the iPhone, BlackBerry and Android devices are seeing significant numbers in terms of downloads.

?The application enhances the advertising experience and therefore is a vehicle that marketers can use to reach consumers who, by the way, are very attached to their mobile phones,? said Brian Murphy, east coast director of AdMob, San Mateo, CA.

Consumers can now see ads, respond to them, watch a video, locate a store on Google Maps and even click to call the advertiser.

?This makes the experience richer and therefore makes the opportunity richer,? Mr. Murphy said.

The panelists all agreed that the application is only the beginning of what mobile marketing will be.

One of the panelists -- Jeff Glueck, CEO of Skyfire, Mountain View, CA -- spent a decade spending money on digital at his old job with Travelocity.

?We are at just the beginning for mobile,? Mr. Glueck said.

That said, 80 percent of mobile marketing is direct response, he said. Many applications currently are ads.

Although the iPhone only makes up about 8 percent of the market, it has really done a lot for the industry in terms of opening up the decks. It has brought the industry opportunity.

?Mobile is sort of where AOL was in 1996,? Mr. Glueck said. ?I think that apps are hot right now but the Web will win out and maybe the Web-based apps will.?

Mr. Glueck's argument was that marketers are not going to create applications for every platform.

There are currently just a few application stores worldwide ? mainly the Apple App Store, Android Market, Ovi, BlackBerry App World, Palm Catalog and soon, the Windows Marketplace ? but as this application craze continues, more will launch. Eventually it may become too much.

Brand on the run
Marcus Startzel, senior vice president of sales at Millennial Media, Baltimore, MD, believes that the market is at the beginning of where this mobile hockey stick will end up.

Advertisers and agencies will be the main drivers of growth.

However, sometimes it is about the application and sometimes it is about the Web, but it all depends on a campaign?s goal and target audience.

Mr. Murphy said that AdMob has seen an increase in application advertising ? appvertising. AdMob proposes a blend of both to its clients.

?The WAP side is the work horse,? Mr. Murphy said. ?The app side is the show horse, a sexier way to present advertising. There are cool capabilities.?

Android and BlackBerry applications have been seeing a lot of downloads, proving that the iPhone is not the only one game in town anymore. Still, Apple did get a head start and has bigger numbers.

Erin Wilson, New York-based specialist at Microsoft Mobile Advertising, talked about branded applications and the fact that large publishers and brands which have loyal fans are able to sell advertising against their applications.

These large, popular brands do not usually have a problem getting people to download their applications. That is why advertisers are drawn to appvertise with them.

?For example, the 'Today Show' application is sold out of advertising space until 2010,? Ms. Wilson said. ?We can target outside of an app environment too.? 

The panelists agreed that discoverability is an issue in the application store and it will only grow along with the stores.

Mr. Litman said that Medialets is seeing buys in the $75,000-$100,000 range for mobile.

Medialets offers mostly rich media, so these types of ad units are priced higher, he said.

Mr. Litman expects that as the market evolves companies which offer rich media will be at the top of the spend pyramid.

?The level of engagement that comes with rich media increases the buy size and will continue to do so,? Mr. Litman said. 

Appetite
Microsoft Mobile Advertising's Ms. Wilson said it is not just about applications. On-deck media is hot and so is WAP advertising since most people can access the Web from their phones, but not all are able to get applications on their phones.

Per Mr. Glueck, on the Web marketers can just keep changing stuff to keep up with technology and phone capabilities.

?Creating a branded service for an application is great,? Mr. Glueck said. ?But it may be better to have a great Web experience.?

Even the big players such as Google find applications expensive. The powerhouse claims it cannot afford to build native applications for all its offerings. 

What will be the tipping point that will take the mobile adverting industry forward?

?I think it is awareness of the targeting capabilities that mobile offers,? Mr. Startzel said. ?Targeting is available on mobile and awareness of that will change the industry.?