Our coverage of the CTIA continues. This is a Q&A with Jesse Goranson, Senior Vice President of Mobile Media, Nielsen (pictured). Nielsen is a leading source of data for the mobile industry. VentureBeat’s mobile expert Matthaus Krzykowski led the questioning. This is the second part of an extended series by Krzykowski on mobile advertising.

VentureBeat: Next to the discussion on “open networks” the other big debate at the CTIA is on mobile advertising. Is a boom in mobile advertisements really coming? There’s been skepticism in the past, with critics saying there’s a lot of hype.

Goranson: The answer appears to be a resounding yes. Marketers have a knack for finding audiences, wherever they roam. Our research shows that consumers have been increasingly exposed to mobile advertising over the past 12 months. In a recent study by Advertising Age, fifty-three percent of advertisers said they anticipate an increase in mobile ad spending, with only 9 percent expecting a decrease.

VentureBeat: Okay, so it’s coming. How big will the market be?

Goranson: With all its different formats, mobile advertising is increasingly difficult to talk about in a collective fashion. Mobile is actually a composite of many different advertising forms: For example, mobile video, with under 10 million active users in the US, is still in its nascent days as a marketing channel, while nearly 138 million subscribers use text messaging, and around 43 million mobile subscribers already use mobile internet—giving advertisers access to scalable audiences for marketing efforts throughout these content types.

Here’s a table showing some data about audience size. Here’s a table showing some data about audience size. If you’re asking about monetary value, frankly no one knows, because the market is so fragmented.

VentureBeat: I’ve heard estimates that the mobile display ad market is around $100 million. That doesn’t count search ads. It also doesn’t count SMS, and so on. Gartner currently estimates the entire global market to be worth up to 2.7B, growing up to 12B $ by 2012. Will this advertising be effective?

Goranson: Consider the Obama campaign’s excellent leverage of text message marketing, when he delivered last month the “need to know” information of Obama’s running mate via text message to 2.9 millions supporters. Will it have an impact in the presidential race? It remains to be seen whether that database of numbers will help the campaign between now and November. The other question is, are users actually noticing the ads on their phones? Earlier this year, we estimate that 77 million mobile users per quarter see some form of mobile advertising while using data service on their phones—up 81 percent over just two quarters prior. Users of the mobile internet were the most likely to have seen mobile advertisements (57 percent of mobile internet users recalled seeing some form of mobile ads), but users of email, social networks, mobile video, music and other media are first likely to start seeing ads this year.

This uptick in exposure is the direct result of increasing agency and advertiser dedication toward mobile. In the past year, agencies have brought mobile out of the backroom, designating teams and financial resources to this medium, as they would to other media channels. Positioned to explore the possibilities, agencies have, in our opinion, started better exploiting mobile’s unique marketing functionality of time, place and interactivity.

VentureBeat: The Obama campaign is cited very often as as case study here at the CTIA as some companies hope that SMS will become more important in the US market. Mobile expert Tomi Ahonen calculated that the campaign got 2.1 million extra votes for Obama for a cost of $300,000 dollars and I heard this numbers of his already used twice in sales pitches. Next question: What are the barriers to more uptake of mobile advertising?

Goranson: There are still hurdles. For one, mobile media is late to arrive to a media and advertising economy that has developed greatly in the past three to five years in terms of reliably quantifying return on investment (ROI). Mobile, coming of age at a time when ROI calculations are expected of modern advertising, will have to quickly show how server logs, independent research and electronic measurement will jointly bring clarity to the results of mobile marketing. The second major hurdle to mobile advertising will be consumer receptivity. Receptivity is closely related to ad relevance, which will be increased by higher quality ad targeting. The communications laws generally prohibit carriers from using or disclosing for marketing purpose information about their customers’ use of the service except with express, opt-in consent ,so as we look for ways to leverage those unique capabilities of mobile, consumer profiling research is critical to helping advertisers determine where to place relevant advertising.

VentureBeat: Interesting. Admob’s Russell Buckley argued on VentureBeat recently that “mobile advertising is becoming increasingly accountable and measurable.” While you both agree on the trend towards more accountability, your data suggests the industry still has ways to go. Final question: Where do you think breakthroughs will happen in mobile technology to help mobile advertising along?

Goranson: Consider the marketing opportunities when a consumer uses mobile mapping functions, with physical location documented either technically through GPS or manually by entering a ZIP code. This possibilities for advertising presented by Google Android’s inclusion of Street View Google Maps seem endless. From an interactive standpoint, we expect to see an increase in mobile ads that incorporate click-to-call functionality, which allow consumers to see an advertisement and link directly into call mode to request more information, order the pizza or talk to an agent. Our research shows that one in ten mobile ad viewers have already used click-to-call to respond to a mobile ad, a functionality that will be even more important as local mobile advertising expands.

With audience and interest in place, the missing link for mobile advertising adoption has been the ability to invest intelligently in mobile media. Advertisers needed tools in place to allow them to make fact-based and measurable advertising decisions. Here, Nielsen and other firms have greatly accelerated the development of media research and advertising planning tools over the past year, to help agencies take a bolder step into mobile media. There are further advancements to be had, to be sure, but already a number of tools are in place that enable the market and allow advertisers to better track the ROI of their mobile ad buy.

Today, audience reach and demographic information is available for hundreds of channels across mobile video, internet, games and applications, and agencies can track the performance of hundreds of marketing shortcodes for fortune 100 brands and a presidential candidate. But audience measurement isn’t enough.

Goranson can be reached here: jesse (dot) goranson (at) nielsen (dot) com

Here’s some of the mobile data just presented by Nielsen at the MobileBeat 2008 today in Sunnyvale, Calif. It shows how mobile Internet usage is growing, and bringing in some new Internet users who don’t access the Web from their PCs.

1. Amazon S3, VentureBeat go down
2. Montalvo Systems vs. Intel, with chip for handheld devices
3. Fox Interactive to introduce “music Hulu for MySpace”
4. Yahoo’s board moving against Yang
5. Google searchers are wealthier, buy more online
6. Xobni hires Jeff Bonforte away from Yahoo, to be its new CEO
7. Stormfisher raises $350 million for biofuel project
8. Cable veteran Philip Balboni moving to online news site
9. Nielsen buys Audience Analytics
10. Air commuter conference coming up this spring
11. Report: Online Community Best Practices
12. Wal-Mart chooses Blu-Ray

Amazon S3, VentureBeat go down — Online data storage service S3 went down. Affected startups include SmugMug, 37Signals, Twitter and many others. Lots of coverage on Techmeme. Earlier today, VentureBeat was down because of separate hosting problems.

Montalvo Systems taking on Intel, focusing on a chip for handheld devices — It has designed a chip for smartphones, notebook computers and other portable devices, that should run software that works on Intel or AMD chips. The company’s plans have been outlined in some detail by Michael Kanellos at CNET (our previous coverage ).

Montalvo’s chips, however, will fundamentally differ from the latest Core or Opteron processors from Intel and AMD in that the cores on its chip won’t be symmetrical, i.e. identical to each other. Instead, Montalvo’s chips will sport a mix of high-performance cores and lower-performance cores on the same piece of silicon, similar to the Cell chip devised by IBM, Toshiba, and Sony, according to sources close to the company.

Bay Partners, U.S Venture Partners, NEW-IndoUS Ventures, Leapfrog Ventures, CMEA and Adams Street Partners.

Fox Interactive to introduce “music Hulu for MySpace”– The project, which is still being put together, intends to sign up all the major music labels as content providers — who would get equity. The music would be distributed on widgets and contained in a portal page, similar to video-sharing site Hulu, which Fox is a part of. The music on MySpace would be DRM-free and ad-supported. PaidContent has the scoop.

Yahoo’s board moving against Yang — Founder and chief executive Jerry Yang and a small group sympathetic members are trying to avoid a sale to Microsoft at all costs. But Yahoo Chairman Roy Bostock is leading an informal group of board members and billionaire Ron Burkle who think that Yang may be ignoring his fiduciary duty to maximize shareholder returns. The New York Post has more.

Google searchers are wealthier, buy more online — Hitwise numbers here. See chart for more.

Xobni hires Jeff Bonforte away from Yahoo, to be its new chief executive — Bonforte was previously a vice president who helped lead the growth of Yahoo Messenger. Company blog post here.
Stormfisher raises $350 million for biofuel project — It turns agriculture and food-industry byproducts into methane gas, which reduces the levels of waste in landfills. The investor is private equity firm DenHam Capital, which has already sunk many millions into biofuel projects.

Cable veteran Philip Balboni moving to online news site — He’s leaving New England Cable News to join online international news company Global News Enterprises LLC, which is slated to launch in April with more than 70 international correspondents. The new company has taken on around $8 million from angels. (Photo via Columbia University.)

Nielsen buys Audience Analytics – The web measurement company says the Provo, Utah-based startup will improve its ability to handle large quantities of audience measurement data
Air commuter conference coming up this spring — Tech commentator Esther Dyson and publisher Imaginova are teaming up to organize the fourth annual Flight School from July 4-6, an event that brings entrepreneurs together to talk about innovation in aviation and space travel. The focus is still on “air taxis” — basically, smaller planes making local flights on-request — but Flight School’s scope will be broader this year, Dyson told us. Since the conference began, air taxis have become a marketplace reality through companies like DayJet, and commercial space flight is becoming more and more practical too, Dyson said. She added: “When I was a kid, I took it from granted that I would go to the moon. Now it looks like I’m going to have to work pretty hard to get there.”

Report: Online Community Best Practices — Forrester analyst Jeremiah Owyang delivers the report (buy here). It’s tagline is “Communities Are A Powerful Tool, As Long As You Put Members’ Needs First.”

Wal-Mart chooses Blu-Ray — More here. Meanwhile, Toshiba may be ready to give up on HD DVD.