San Francisco (IDGNS) - Seattle's Medio Systems hopes to win a piece of the promising mobile advertising market -- an emerging market that giants such as Google, Yahoo, and Microsoft are also chasing -- by focusing on delivering advertisements in mobile search results.
On Monday, Medio launched an advertising network that will initially be used by Amp'd Mobile. Amp'd currently uses Medio's technology to fuel the Amp'd-branded mobile search application. Now, when Amp'd users search online, they'll see a sponsored link on the top of the list of results.
Medio is still experimenting with different visual components, said Omar Tawakol, chief advertising officer for Medio. For example, one or two advertisements may appear, and they will be clearly labeled as either a sponsored link or an advertisement.
Some of the ads may be "click-to-call," so users can click on the link and be automatically connected via a voice call to the advertiser.
Although ads that accompany search results are the focus for Medio, the company is also working with publishers to display text or banner ads on mobile Web sites.
One reason Medio is so focused on search advertising is that customers may be more accepting of it. The click-through rate of Web banner advertising has steadily decreased since the mid-1990s, Tawakol said. But search advertisement click-through rates have stayed fairly constant, he said. "Because, to the consumer, it looks more like an answer," he said. "The perception of [online] ads has been a tolerated annoyance. We're saying search ads are an added value."
Theoretically, a mobile operator doesn't have to be a Medio search customer to use the advertising offering, Tawakol said. In addition to Amp'd, Verizon Wireless and T-Mobile USA are also users of Medio's search technology.
Medio is better positioned in the mobile advertising market than some of the giants in the online world, Tawakol said. That's in part because mobile operators can use Medio's offerings to create a self-branded search service. Many operators would prefer to use their own brand, rather than partner with the well-known Internet companies. "They can't afford to have someone say, 'This is my Google phone'," he said.
However, Google and Yahoo have both launched services that display sponsored results in their mobile search offerings and mobile users familiar with using those services on computers may gravitate toward them on mobile phones. In addition, Sprint Nextel has a deal with Microsoft for delivering sponsored mobile advertising in search results.
Medio is also competing against other relatively recent market entrants in the mobile advertising market. AdMob and Third Screen Media are two other companies offering mobile advertising products and services.
However, Tawakol doesn't regard them or Google and Yahoo as his main competitors. "I'm not looking at existing mobile advertising. I'm thinking my competitor is TV and online media," he said. When it becomes easier for advertisers to place ads that will reach mobile users no matter which operator they subscribe to, the mobile platform will be more competitive against other media for advertising dollars, he said.