Where will the money come from?

A very thought provoking article. It is interesting to wonder what kind of business model will be adopted with respect to receiving mobile ads. WIll the user get a discount for his usage and for seeing an ad and a portion of the revenue going to the CSP like the internet. I think that will be real challenge.

T V Ganesh

In the long-term, I predict that successful advertising business models that Service Providers of many types use will be diverse and creative.  They will vary by some of the unique aspects of culture and regional market.   In many cases, the app or service itself may be free to the consumer, but will have embedded advertising in some form that the Service Provider cuts a revenue share from for value-added enablers of distribution (delivery QoS, ad measurement, behavioral targeting, real-time context , etc.).  

I agree that success with discounts on traditional communications access service usage in exchange for being pounded with ads may be limited.

I agree with Martin that in the long term the machine to machine (M2M) market will be important. There are many other examples as well- I gave some of these during my talk at our TM Forum track at Mobile World Congress.

I also think there is monetization beyond advertising. For example, what if you were a teenager, and were offered 10 minutes of talk time or 20 messages for taking a short survey? what if you got a small "top up" every time you bought a Pepsi instead of a Coke? it's not just advertising, it's sponsorship as well.  

So M2M will be huge (if we don't give it away) in the future, but I think the other big play in developing countries will be mobile money. it's probably too late in developed countires to fight the credit card companies, but there are lots of countries that still have this need.

Finally, I agree with Stephen that cultural and regional differentiation is one way that local providers can battle global brands (like Apple). in fact, you'll see a little bit of that in my upcoming app store report. And on th webinar on April first...  no fooling!

The opportunities will be there. The industry just needs to figure out which ones are right, and go for them.

On-line free services are certainly a phenomenon us to understand if your core fee based business is threatened.  One answer it to continuously add value for that fee.  Netflix, which is low cost, provides tremendous value and has been able to quickly adapt its business model to retain and increase its value perceived by customers.  Examples are the offering of a low-cost upgrade to the account if you want blue-ray media (a great move on an existing model) as well as it's embedded media player in Sony equipment is a hugely successful strategic move.

I just happened to have just finished adding "The Quick and the Dead" to my Instant Queue just before catching up on your blog ;)

There seems to be a huge interest from readers on the topic of monetizing new services. As I mentioned