Yahoo in image advertising test on mobile phones

*http://www.washingtonpost.com/wp-dyn/content/article/2006/11/07/AR2006110700089_pf.html*

By Eric Auchard
Reuters
Tuesday, November 7, 2006; 1:16 AM

SAN FRANCISCO (Reuters) - Yahoo Inc.
<http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=YHOO&nav=el>
(YHOO.O) is to begin delivering graphical ads to mobile phones as part
of a test of how it can extend corporate brand marketing on the Web into
the wireless market, the company said on Monday.

The Internet media company said it will start an initial public
evaluation later this week in the United States of slimmed-down banner
ads and similar advertising to the small, but growing number of users of
Yahoo's Mobile Web service.

"The challenge is that because cellphone screens have limited real
estate, ads have to more relevant," said Julie Ask, an analyst with
JupiterResearch.

"There is an extra burden" compared to ads delivered to computer users
on the Web.

The brand advertising trial comes a month after Yahoo began a parallel
test to deliver relevant text advertisements tied to searches phone
users can perform on mobile Web browsers. That test is taking place in
the United States and Britain.

Banners ads are nothing new on cellphones. Start-ups like Third Screen
Media of Boston already work with ad agencies, buyers and mobile
carriers to deliver ads to wireless users.

But as more and more U.S. mobile phone users own phones with fast
Internet access, major Internet players are eyeing the market. On the
computer Web, Yahoo is the largest provider of image-based, brand
advertising and the No. 2 supplier of online search advertising behind
rival Google Inc.
<http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=GOOG&nav=el>
(GOOG.O).

It's a potentially lucrative market.

Because consumers carry mobile phones with them around town, advertisers
are willing to pay several times more for wireless ads as they for
standard computer ads over the Internet.

"The bottom line is there should be a premium for mobile advertising,"
Ask said.

Now consumers can click on interactive ads to learn more details about
an advertiser's offer or to call the advertiser. The ads, which measure
150 pixels by 21 elements, are images that take up a small portion at
the top of the screen.

Yahoo's Mobile Web service is available on most phones offered by major
wireless operators in the United States. It gives consumers access to a
basic set of Yahoo services, including search, e-mail, news, stock
quotes and sports.

JupiterResearch estimates that 10 percent of U.S. mobile users browse
the Internet on their phones. But only 2-3 percent check the Web on
their phones at least five times a week -- a key measure of active
Internet use and advertising readiness.

"Now is the time for Yahoo to experiment," Ask said.

As more U.S. users sign up for high-speed mobile Internet services and
buy newer phones, "Eventually consumers will treat the phone as a
mini-Web experience," Ask predicts.