The next time you find yourself using your cell phone to check out Rihanna’s latest video or Mariah Carey’s latest blog, don’t be surprised if you encounter an ad for the latest tricked-out Lexus SUV.
Quattro Wireless will be behind that ad.
Quattro Wireless, a mobile ad network with about 300 sites, on Monday said it signed an exclusive deal with Island Def Jam Music Group to serve ads for the record label’s mobile web site, IDJMobile.com.
The deal could be a coup for Waltham, Massachusetts-based Quattro because of IDJ’s wide-ranging talent roster including Rihanna, Kanye West, Mariah Carey, Bon Jovi, and Melissa Etheridge.
Brand advertisers could find the crossover appeal of IDJ’s old- and new-school artists attractive for certain classes of products. The marriage of mobile and music has been a long and mostly successful one dating back to ringtones.
The IDJ deal could also lend some pizzazz to the mobile ad market, which has stumbled over a series of obstacles that has kept it in the low single digits in terms of the percentage of the total ad expenditure it commands.
“It has taken a while for mobile phone operators to open their networks to advertising, and the economic downturn also does not help,” said David MacQueen, an analyst with Strategy Analytics. “But we still expect this market to eventually live up to its promise.”
Strategy Analytics significantly downgraded its short-term revenue forecast for mobile advertising, citing the sluggish uptake by ad agencies and brands.
Mobile ads generated about $4.5 billion in 2008, according to eMarketer or $1 billion, according to Strategy Analytics. eMarketer expects the market to grow to $19 billion by 2012, while Strategy Analytics expects the market to push past $10 billion, or 10 percent of the global ad expenditure in the same period.
“The projections are wildly different because the analysts are not uniform in their methodology, but this year has been very good for us, AdMob, and Millennial,” said Andy Miller, CEO of Quattro. “It’s possible that budgets won’t grow next year, but I don’t think budgets will take four years to grow to the numbers they are talking about.”
Quattro, which has raised about $18 million in funding, competes with about a dozen VC-backed firms including AdMob and MillennialMedia.
These companies act as marketplaces where content owners such as IDJ, the NFL, and Univision can earn ad revenue from advertisers, and advertisers such as Sony and P&G can find mobile avenues for their advertising dollars.
Advertisers remain interested because of the promise of 3 billion mobile phones worldwide with location awareness accessing the mobile web.
To date much of the expenditure has been experimental, but analysts expect mobile ad budgets to expand as some of the market’s technical and acceptance problems are ironed out.