European Telco Titans Team to Exploit SMS Ads

29 November 2007

NEWBURY, UK: The siren call of yet another electronic advertising opportunity has united two major European-headquartered telco titans - Britain's Vodafone and Spain's Telefónica - in normal circumstances eyeball-to-eyeball rivals.

But the prospect of mucho moolah is the greatest unifying force in the cosmos, and the two telcos scent a deluge of conveniently convertible currency in the present craze for SMS [short message service] text messaging via mobile phones.

Both are investing undisclosed sums in Amobee, a San Francisco-based company that claims to be the first to deliver a unified, telco-grade system for funding mobile content and communications through advertising revenues.

It is now rolling-out its ad serving platform for mobile search, mobile games and text messages - a market that business media group Informa estimates will grow from its present $2 billion (€1.35bn; £968.4m) market to $11.3bn by 2011.

Telefónica director of innovation Russ Shaw is engagingly frank about the underlying reason for the investment: "Is [mobile advertising] going to be as big as everyone says it will be? We're not entirely sure, but we felt it was important to be close to this."

Conversely, Frank Boulben, Vodafone's director of strategic marketing, was in macho mode: "Having Vodafone as a major customer provides [Amobee] with a major boost," he said. "By investing in the company at the same time, we'll participate in the value we bring as a reference customer."

Also indulging in braggadocio was Amobee cmo Patrick Parodi: "UK and US SMS traffic is larger than all the traffic to Google worldwide. If we can monetise that traffic, this is going to be huge."

Data sourced from Financial Times; additional content by WARC staff