March 4, 2008 4:03 PM PST

Mobile ads start to get traction

Posted by Marguerite Reardon

Nearly a quarter of all cell phone users in the U.S. say they've seen an advertisement on their phones in the past 30 days, according to a report from Nielsen Mobile, which tracks these trends.

About half of those who saw advertising on their mobile phones in the past month responded to an ad, the report said. In the fourth quarter, there was a big jump in the number or people reporting that they had spotted advertisements on their mobile phones. In fact, this figure rose 38 percent to 58 million users who said they saw advertising on their cell phone, compared with only 42 million who said they saw advertising on their phones in the second quarter of 2007. Nielsen surveyed 22,000 active mobile data users in its fourth-quarter survey.

Mobile operators and content providers have been talking about the promise of mobile advertising for more than a year. The hope is that advertising can help boost revenue for both operators and content providers. Consumer advocates also hope it will mean more content for users at a lower cost.

But service providers have been cautious about adding advertising too quickly, because they are afraid that bombarding customers with ads will result in a backlash. But the Nielsen report offers some encouraging news that should help ease these worries.

According to the report, almost a third of people who use data services such as text messaging or Web surfing say they don't mind advertising so long as it lowers the cost of their overall bill. And roughly 13 percent said they were in favor of advertising if it improved content. And 14 percent of those responding said they didn't mind ads if they were relevant to their interests.

Big Internet companies, such as Microsoft and Google, are already adapting their advertising products to work on mobile devices. In December, Microsoft launched mini banner ads optimized for cell phone browsers and screen size when people visit mobile MSN portal. And in September, Google launched AdSense for Mobile, which will allow marketers to place contextual ads on sites viewed via mobile devices.