The use of advertising on a mobile device is poised for the big take-off. There are several factors that are contributing to the rightness of the model, right now. 

The easiest model to understand is the willingness of large content providers to spend advertising investment to attract subscribers to their premium-SMS services. Today, much of that investment is directed at the Web. There is evidence to suggest that the effectiveness and conversion rates for ads on a handset, for services that are targeted for the handset, is superior to the Web.

This conclusion is almost completely intuitive.

If you are sitting in a stadium and you see a beer commercial, you are more likely to purchase a beer, immediately. If you are instead in an environment that does not have that immediate purchase opportunity (like watching the game on TV), the effectiveness of that ad to drive immediate sales is reduced.

 So, ads for handset-targeted services seem like a complete no-brainer for the industry.

These ads can come in various forms.

Carriers are opening their Wireless Web (WAP) portals to advertising through both agencies and direct contract. With this model, the carriers can get a cut of the ad revenue. The real estate bears limited space, so ads are required to be as condensed as possible to be effective.

Other models include MMS interstitial slides and SMS tags. Both of these models have been experimented with and have not been widely deployed — yet.

The next wave of ads is also being brought in through the Trojan Horse that is a combination of Smartphones and Google services.

  With Internet-compatible browsing on iPhones and others, the traditional Web advertising model is being dragged on handsets. Based on browser type, ads will be targeted on Smartphones for services that are applicable for the phone itself and for the mobile consumer. 

 These latest models have the potential to remove the carrier from the advertising value chain. 

I am sure there are significant discussions throughout the carrier community on trying to derive value from this emerging and potentially huge revenue stream. Anyone care to weigh in? I welcome your comments!