What Will Mobile Advertising Look Like?

3 months ago I upgraded to a 3G, GPS enabled Smartphone (the Blackberry Bold) with the intent purpose of finally using my phone to do more than just talk and read emails. (I rarely responded to emails unless it required just a few words and I never opened links or downloaded attachments as the processing speed was just too slow.)

Up until then, I remained tethered to my computer for most of my work. At the time, a popular new media blogger I follow, Steve Rubel, was regularly describing the emerging role of his Smartphone in every aspect of his digital life, leading to the point where he could travel on business trips without his computer. I was falling way behind.

Moving to 3G is like moving from a dial-up internet connection to broadband. Activities that once took minutes now take seconds. Within a few days of purchasing the new device I was using it to regularly browse the web, read my news feeds in Google Reader and even watch an occasional streaming video. Soon after I was using it to moderate comments on this blog, read documents and post status updates and photos to Twitter and Facebook.

To many of you with iPhones, this is all yesterday's news. But with 3G becoming the standard for every new phone sold, and even more robust mobile technology platforms coming shortly, the stage is finally set for mobile advertising to become a significant business.

What form this new advertising model will take is anyone's guess. But two of the most powerful companies in the world are in the midst of an escalating battle to define and own it. Apple, with no advertising sales experience, recently bought a fast-growing mobile advertising company after being outbid by Google for its first choice. This skirmish, as well as many others between the two former allies was described in juicy detail in a New York Times feature story last Sunday titled "Phone Fight!"

Apple wants to leverage its strong market penetration (25% of all smart phones), closed operating system and tightly controlled iphone app network to create compelling ad solutions. Google wants to leverage its roaring, open-source, Android operating system (which grew from 2.8% to 7.1% Smartphone penetration in the last quarter) and unrivaled search advertising machine.

And any discussion of the future of mobile advertising has to include the highly publicized location-based platforms that leverage the smart phone's GPS technology. Companies large (Facebook, Yelp) and small (Four Square, Gowalla) are staking claims.

2 weeks ago, anxious to now stay a bit more ahead of the adoption curve, I signed up for Four Square and have been "checking in" to restaurants I visit ever since. The opportunities for services like this to transform local advertising are very real.

The Web On Your TV Now

Over the past few days I polled a few random friends - who are not particularly technical in their orientation - and found that half (3 out of 6) regularly view web based video content on their TV screen. One friend simply connects his laptop to the TV monitor, another uses Apple TV, and the other streams Netflix TV shows and movies through his X-Box 360.

I was surprised by what I heard. But it turns out that a significant swath of the country is also connecting.

According to a new research study from The Leichtman Research Group (as reported in Media Post), 24% of US homes have a Web-TV-Connection.  As with my friends, the methods of connecting are many and varied - from video game consoles and Blue Ray players to Internet connected TV sets, Roku players and PCs/Laptops.

It is a highly fragmented market but clearly indicates that consumers want to take greater control of their TV viewing, bypassing the traditional distribution platforms. (The outrageous battle between Cablevision and ABC earlier this week that kept 3 million homes without the Oscar telecast for 20 minutes will only fuel this trend.)

The Networks who supply the content have some critical decisions to make in the immediate future. How do they make their content available on all these platforms without disrupting their enormous cable and satellite subscription business?

And how much do they charge for commercial-free versions (see my iTunes post about this) and what should the commercial load be for those who want to watch it online for free?

The market moved to 24% without anyone really noticing. The 50% threshold could be passed by the end of 2011.

The same day the Media Post article appeared, Walt Mossberg wrote a column in The Wall Street Journal describing some popular new ways to wirelessly beam web video from your computer to your TV screen.