DSB2010: New Mobile Revenues for New Mobile Times

Lisa Bishop at Gray Television took a few contrarian views when discussing mobile strategies, during an afternoon DSB session on “New Ad Revenues for New Times.” Taking issue with the app craze we’ve seen dominating the media world over the past two years, she’s seeing better engagement and returns with SMS and WAP strategies.

“WAP is more widely available to a larger consumer base,” she said. “The iPhone makes up 2 [percent] to 4 percent of devices and our developers were spending 80 [percent] to 90 percent of time reaching this smaller share of end users.”

This flies in the face of News Over Wireless’ Sam Matheny’s point yesterday about greater growth and rich media capabilities of iPhone apps. There is also the argument that what the iPhone lacks in device share, it makes up for in engagement share, holding the vast majority of mobile Web traffic in the U.S.

The mobile products and features that Gray has focused on include WAP sites for each of its stations and SMS alert service for weather, news and sports alerts (monetized with sponsored messages). Next up are coupons, local search functionality (working with Local.com) and social sharing features.

Also somewhat of a contrarian take from Gray was its recent decision to go it alone when it came to building and managing its WAP product. This was a risk at first because it lost on-deck traffic it previously enjoyed by virtue of the carrier relationships held by the vendors it worked with.

But given more smartphones in the market, Bishop argues there are more users going off deck to search the mobile Web, thus mitigating this lost traffic. Bringing the platform in-house has also allowed Gray to have better control over the dynamic nature of its content, site design, ad serving and perhaps most of all, cost.

“Selling mobile [advertising] was difficult because costs were so high,” said Bishop. “We were selling $20 to$25 CPMs for our WAP sites. But we’ve been able to lower that and see greater returns.”

The results speak for themselves: Gray has cut mobile costs by $0.5 million and increased revenues by 90 percent over the past year. With SMS, it has seen a 20 percent increase in sponsored alerts and has run 130 SMS campaigns in the past month alone — more than it did all of last year.

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