Mobile phone carriers, desperate to keep growing, are obviously excited about mobile ads. But most ads on the mobile Web won’t make them a penny — any pennies earned will go to Web publishers. So carriers need to sell ads in places they do control.
One potential ad space: The display you see while you’re waiting for calls to connect and disconnect, sending a text message or email, downloading a ringtone, etc.
That’s what Digital Sidebar, a Santa Monica, Calif.-based startup, is hoping to offer carriers. The company’s Sidebar platform launches today, and they’ve signed up a major U.S. carrier to trial it. (They won’t say who it is yet.) Sidebar will show ads and other sponsored content while people are waiting for their phones to do stuff, and will be able to target content based on a user’s age, gender, interests, use patterns, day and time, etc.
What Sidebar doesn’t explain: Why anyone’s going to put with the ads. If we’re paying for Web access/data plans, we’re going to need a pretty big enticement to put up with this stuff. The company’s site does make a reference to “enhancing customer satisfaction and loyalty through a personalised marketing channel,” but we assume that Digital Sidebar’s mystery carrier has some more specific scheme in mind.
Assuming they figure it out, how big is the market? Digital Sidebar guesstimates that by 2012, there will be 4 billion wireless subs worldwide and 1.28 trillion potential Sidebar impressions every month. That’s an average 320 impressions per subscriber, per month. Assuming a $15-20 CPM, or cost per 1,000 impressions, that’s about $4.80-6.40 per month, per subscriber. Or about 10%-13% on top of the roughly $50 per month that U.S. wireless subs spend on service. Not bad. (Update: We hear Digital Sidebar will be looking for CPMs about twice that amount.)
Digital Sidebar closed a $5 million Series A round last year from undisclosed private investors.