Voice interaction looks to quiet mobile advertising's critics

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Jason

Mobile advertising's proponents remain bullish on the medium's future. A new BIA/Kelsey report projects total U.S. mobile ad spending will surge from $3.2 billion in 2012 to $16.8 billion in 2017, fueled in part by the growth of the mobile local advertising segment, which is expected to increase from revenues of $1.2 billion a year ago to $9.1 billion by the end of the forecast period, representing a compound annual growth rate of 49.3 percent. The report adds that search advertising will continue to outpace other mobile ad formats, especially within the local space, citing the high correlation between search and user intent: According to BIA/Kelsey, search spending will leap from $704 million in 2012 to $5.7 billion in 2017, followed by display ($379 million to $2.7 billion), commercial SMS ($101 million to $162 million) and video ($38 million to $515 million). 

But not everyone is sold on mobile advertising's potential. This week, Viber CEO Talmon Marco said his company's popular free voice and messaging app will soon roll out value-added services designed to monetize its platform. Marco did not reveal what kinds of premium services and features Viber plans to introduce, but he did make it clear that advertising subsidization is out of the question.

"The problem with advertising… is that [devices] don't have that much screen real estate," Marco explained. "You take up some of it with an ad, you have even less. It just doesn't look good. There are better ways to make money."

Assuming screens aren't going to get significantly larger, it's time to reduce the size of their role in the mobile advertising paradigm. That's the idea behind Nuance Communications' new Voice Ads format, introduced earlier this week. Expanding on voice and natural language technologies powering Nuance products like Dragon NaturallySpeaking and Dragon Mobile Assistant, Voice Ads enable consumers to interact directly with campaigns by speaking into their smartphones, leveraging core mobile device capabilities like location awareness and voice input to deliver targeted ads that prompt the consumer to ask questions.

Nuance is releasing a Voice Ads software development kit that enables mobile ad platform and network providers as well as creative agencies to integrate the technology into new and existing mobile campaigns. Nuance is additionally partnering with mobile ad firms Millennial Media (NYSE:MM), Jumptap and Opera Mediaworks as well as creative agencies Digitas, OMD and Leo Burnett to provide distribution to app publishers and consumers. "Mobile has a monetization challenge," Nuance Vice President of Advertising Mike McSherry told AllThingsD. "By introducing voice you can transcend the small screen size."

In a YouTube video posted to the Nuance site, McSherry demonstrates a virtual Magic 8-Ball-inspired campaign that answers consumers' verbal queries to promote a fictional deodorant brand. It's a rudimentary example, but it underlines Voice Ads' enormous potential for consumer engagement, especially around mobile search, a format all about question-and-answer interactions. It's going to take some time for the Voice Ads concept to evolve, and developers and publishers must sign on for the format to gain traction. But, it could turn out to be the game-changer that transforms Viber and other mobile ad skeptics into true believers.--Jason

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