Ericsson Makes Bold Move in Mobile Advertising

Sept. 22, 2010, 5:06 p.m.

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Ericsson has just launched a one-stop-shop solution for mobile advertising called AdMarket , in a bid to remove complexity and frustration from the current ecosystem.

It’s a bold move for the telecom equipment giant, and at first glance seems like it has bitten off more than it can chew. Ericsson’s lead on this is Christina Bck, head of advertising solutions. She says AdMarket’s key differentiator will be the use of operator “data sets” – the vast amounts of information that wireless operators have on their subscribers that can be used for targeting.

T he company has done its homework. It hired international law firm Bird & Bird to study the legal ramifications of ad targeting, and it focused on 10 countries: U.S., Sweden, UK, France, Russia, Argentina, Saudi Arabia, India, China, and Indonesia. Moreover, Bck says the company has more than 70 signed partners, including operators, advertisers and agencies. Impressive, but will enough important operators buy in?

My take: this will work better in smaller markets that don’t yet have much going on in the way of mobile marketing or advertising. But for more developed markets, such as the U.S. or Western Europe, it’s likely to struggle. Why? For one, ad networks like Apple (Quattro), Google (AdMob), Millennial Media, Jumptap, and Greystripe – to name a few – already provide mobile ad inventory and targeting capabilities that have so far met the early demand. Plus, it will be difficult for Ericsson to get major competing operators to pool their data to give advertisers the cross-operator reach they seek. Finally, the ad business is not necessarily a mobile hardware vendor’s cup of tea. Nokia, for instance, has tried and so far failed to make a dent. It bought Enpocket several years back, and has yet to show much from that purchase.

So, welcome to the party, Ericsson. I like your bold move. Just make sure you have some alternative plans (including an exit strategy) for when things don’t quite go as planned.