Media Week revealed last week that ITV, the UK's largest commercial broadcaster, had failed to reach advertising revenue share agreements with mobile operators for on-portal content.
ITV will roll out its mobile offering on O2, Orange and Vodafone without advertising, unless the parties involved broker some last-minute deals. It seems that all parties are determined to maintain total control over their advertising inventories.
While ITV has had its WAP site up and running since September 2005, and relaunched it twice, it is only now, by partnering with operators, that it will become a major force in mobile.
Take Emap, for example, the biggest contributor to Planet 3, mobile operator 3's portal that hosts content including Zoo and FHM. Off-portal content accounts for less than 1% of Emap's mobile traffic, according to Bruce Daisley, the troubled publisher's digital sales director.
Therefore, the success of on-portal content is crucial to a company's mobile strategy. But as Melissa Goodwin, head of mobile at ITV points out, advertising on mobile is very much in test phase.
"Our approach has been to build a portfolio of services that can test and explore consumer demand, and work collaboratively with operators to negotiate agreements that get the content that viewers want to see," she says.
Crucial factor
Goodwin hopes to have some ad agreements in place later in the year. For Emap's Daisley, however, attitude is the crucial factor in making mobile advertising work.
"We haven't finalised written deals with the operators, but we have got agreements in place and have a good level of understanding with them," he says.
"I was dreading a big clash with operators, but it never happened as everyone wanted it to work. I can't help but think that ITV's attitude is the problem in this instance."
The issue of who is to blame for the ITV stalemate is less important than wider problems that are holding back mobile advertising. Claire Valoti, business director at media agency MindShare Interaction, believes that everyone should lessen their immediate expectations for mobile advertising, or at least postpone them for a couple of years.
"This year the role for those in mobile is to learn what audiences want to do on their phones," she says. "The average media owner won't make money from mobile advertising in 2007. In 2008, the operators will all offer flat rate data charges, so that will open things up."
Goodwin cites problems in measuring the effectiveness of mobile advertising as a hindrance to its development.
"There's much work to be done on measuring the value of eyeballs on mobile content before we can even properly monetise mobile advertising. Only then can you agree revenue shares with operators," she says.
Daisley sees wider problems. He says: "The problem has a little bit to do with a lack of flat-rate data charges and a little bit to do with the search experience. A lot of web pages that come up in the search listings are unviewable on mobile, so the experience isn't a good one for the user. Because no one has cracked mobile search, people will stay on portal for at least the next 12 months."
Peter Northing, head of product and services at 3, which has invested more than any other UK operator in mobile content insists that, while there is a lot still to learn, advertising has become an important revenue stream to many.
Different approaches
"We have advertising across our portal the whole time and brands such as Adidas, Lynx and Coke have been involved," he says. "Media owners have to realise that the mobile web is different from the internet and approaches should take this into account. You can't just copy and paste content from web to mobile."
Northing predicts a lot of developments in mobile advertising in the short term. "Advertising is core to what we're going to be doing," he says. "There are a lot of ways to move things on. Paid-for search is a big area to move into. We will soon have a better search engine with paid search on."
The medium is still very much in its infancy and many setbacks such as that suffered by ITV.com are to be expected over the coming months. But, like the internet before it, mobile content is one to watch MOBILE OFFERINGS
- Despite a lack of advertising opportunities, broadcasters have recently been migrating their content onto mobile
- 3 offers BBC1, BBC3 and BBC News 24, as well as ITV 1, Paramount comedy, FHM and MTV
- Sky has teamed up with Vodafone to offer Sky News and Sky Sports News through Vodafone Live!, along with BBC channels and Channel 4
- Orange offers a Sky package, as well as Channel 4, ITN, Bravo and Living
- T-Mobile has preferred offering clips of TV shows, although it broadcasts British Eurosport live
- Virgin Mobile and O2 have not developed their mobile TV offerings as much as other operators
- News Group Newspapers has the rights to Premiership football clips from next season, and has signed partnerships with all mobile operators except 3
- A joint venture between Vodafone and Yahoo! will offer display ads and reformatting of web pages to fit the mobile screen.