TV Stations Getting An Early Jump On Mobile

What a difference a few months make. Back in March, Marc Montoya of Nexstar Broadcasting Group, spoke enthusiastically about the mobile ventures that four Nexstar stations had launched.  But he was reluctant to make any projections on future mobile rollouts.

Now he confidently predicts that by the end of June, around 20 Nexstar stations will have some form of mobile service such as WAP-enabled mobile sites, SMS texting or apps for iPhone and Droid smart phones.

"Mobile is going to be the next big thing," says Montoya, Nexstar's SVP of e-media sales and operations.

And Nexstar is not the only TV station group that thinks so. Raycom Media, for instance, is offering mobile services at all 32 of its news-gathering stations. And Cox Media Group has either WAP sites or iPhone apps running in all 11 markets in which it operates.

Despite the enthusiasm, Borrell Associates describes the broadcasters' mobile business today as "more of a staging ground for TV stations in the next two or three years than it is a source of significant revenues."

Borrell estimates that local TV mobile revenues amounted to $29 million last year, or 12% of all local mobile advertising. The majority of TV stations received less than $20,000 from mobile advertising last year, according to Borrell's Benchmarking TV Web Site Revenues report.

But local mobile "is growing like Topsy" says Kip Cassino, Borrell's VP of research. He expects that by 2015 or 2016, mobile will comprise about 60% of all online advertising and TV will account for 20%-30% of it.

"TV stations have gotten a jump on other media in applying mobile to their online efforts," he says, noting that when online advertising came to the fore, newspapers beat TV stations to the table.

TV stations' current mobile efforts are a prelude to mobile DTV, the full-motion video service developed by the Open Mobile Video Coalition. With the help of area stations, OMVC is now conducting consumer trials in Washington. Broadcasters are hopeful that it will eventually become a robust revenue producer, but right now it is unproven.

At Nexstar, the mobile offerings aren't just some kind of trendy gimmick. "The stations have to make money on these apps, or they don't run them," Montoya says. "We have them do business plans before they launch [mobile services]."

The expectation is that Nexstar stations will generate "four times on return for any product or program that we put out there," Montoya adds.

Raycom's Pat LaPlatney, VP of digital media, says that the company's mobile business is "modestly" profitable today. "But we expect it to be a significantly profitable business before long. I think it's going to be a great driver of growth over the next five to 10 years."

Some of the companies that provide stations with mobile products and services are also bullish. Lee Durham, president-CEO of LSN Mobile, says that the national and regional mobile advertising his company sells for almost 250 stations is doubling every month.

One of LSN's competitors, News Over Wireless, announced an 800% increase in ad revenue in the first quarter 2010 versus same time last year.

Jimmy Goodmon, VP-GM of NOW parent Capitol Broadcasting Co., says that the company's WRAL Raleigh, N.C., is reaping profits from its mobile business. And the campaigns NOW is booking on behalf of more than 155 station affiliates range from $1,500 to $10,000 per mobile site in a typical 30-day period.

DoApp Inc. creates applications for mobile devices and has an ad network geared to local advertisers. The majority of its 200 clients are TV stations with news operations.

"We deliver over 2 million advertising impressions a day, with a growth rate of roughly 11% per month," reports DoApps CEO Wade Beavers, whose ad network allows advertisers to lure consumers with promotions in very specific geographic zones.

Jeffrey Ulrich, Cox Media Group's senior director, digital sales strategy and training, says local rivals in other media sectors don't have the footprint or the cross promotional power of TV to effectively compete. "That's a great opportunity and advantage that we have over non-broadcast companies," he adds.

But Ulrich is among those who also see some challenges with mobile as well. "It is a media sale that's accompanied by a higher level of education and enlightenment than we're used to," he says. "Clients are looking to us to be their digital tour guide. The key is to have trained sellers and vendor partners that are eager to join you in that conversation."

Others note that gaining TV sales team support has been difficult at some companies, particularly in a year like 2010, with the Olympics and a strong political advertising climate.

Rick Ducey, chief strategy officer at the research firm BIA/Kelsey, notes a need for better accountability of mobile ad results  -- "a nice analytic dashboard, getting an exclusive and timely assessment of ROI."