Blyk, the new mobile operator gave a keynote speech at the Informa Mobile Advertising and Marketing conference in Paris, Jan 16-17.

by Antti Öhrling, Blyk.
“I had a pleasure to participate and speak at Informa mobile advertising and marketing conference this week in Paris. It was interesting to see, how things have (and have not) moved forward in mobile advertising. Topics covered a lot of ground – from Case studies (Coca-Cola and Peugeot) to panel discussions about industry value chain and from Mobile-TV to advertising via SMS.

The need to tap advertising revenue is there, but the means are missing. Overly complex industry value-chain, network and technology issues, lack of collaboration and the absence of consumer data and profiles simply dwarf the entire industry. The distribution simply does not work. That’s why everyone is doing a bit of everything, just to do something.

The thing missing is the BENEFIT. And with this I do not mean benefits for operators, platform providers or the advertisers – it’s the consumers that get nearly nothing out of mobile advertising. Commercial television has been the dominant form of broadcasting. FREE. Netscape introduced FREE internet browsing. Hotmail was the FREE email, Google organized the internet for FREE and enabled simple, spontaneous access to information. Napster created FREE peer-to-peer file sharing. Skype launched FREE internet phone calls… revolutionizing the perception of international phone calls and was the fastest application adoption in the history. Simply put…FREE is GOOD. And I believe that free is also the future of mobile communications, especially for young consumers.
There is one topic that makes the industry discuss: how much advertising can consumers TOLERATE? If you look what mobile industry currently is offering to them – the answer is easy: NONE. There is no BENEFIT for them.

If consumers get a real BENEFIT and receive ads that are relevant and entertaining for them, two things will happen: Free is good and best of all – ads are good.”

My assumptions on the user generated video market was confirmed yesterday as Screen Digest published a study on how advertisers view user generated sites.According to Screen Digest user generated sites are forecast to catch just 15% of the ad revenue share online. In the US such sites are forecast to grow from Euro 154 million to Euro 875 million by 2010 however this will still only account for 15% of the overall growth of the market.

The report claims that movie content from professional media studios such as Fox will be much more important to advertisers than amateur video clips or any other user generated content from sites such as You Tube or My Space. As Mr. Peter Chernin, News Corp President states in the FT “In economic terms there is no scarcity value for this content…so there is very little ability to monetise video advertising on user generated video”.
As I mentioned in an earlier post I strongly believe that in the future such sites will need to seek new revenue sources. I can understand that advertisers find it difficult to tie their message into the overwhelming about of variety offered user generated channels and I cannot see consumers accepting a sponsor message before watching a video clip.

The contrast with the professional market is significant as Screen Digest forecasts the professional content market to attract advertising worth over $ 6.2 billion in 2010 up from the current $1.1 billion dollar mark.

Conclusions are that user generated video sites would need to diversify to survive, offering premium content or licensing of technology. The study also predicts growth for European rivals such as Sumo.tv, Clipfish and You Tribe.