For startups, it's all about the bottom line – page 2

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The upshot is that the new funding environment favors companies that have the best chance of being profitable quickly. By demonstrating a clear, fast return on investment to potential customers, a mobile marketing company creates value not just in the eyes of those customers, but of VCs, too. Because mobile marketing offers such a great rate of return in brand lift, CPM, CPC and CPA depending on what the customer is looking to measure, startups in the mobile marketing area can be highly attractive investments to fund. At the MMA we study our members and do research on them and aggregate that information to see the trends. It is clear that despite the state of the economy and the difficult funding environment, many of our small- to medium-size member companies that are specialized in delivering mobile marketing and mobile advertising campaigns are having a very good year with record revenues and profits.

"We work with about 18 mobile advertising companies, and we're clearly seeing a handful pulling away from the pack and earning more of our advertisers' dollars," said John Hadl, founder and CEO of Brand in Hand, which advises mobile companies and major brand marketers, with clients that include Procter & Gamble, Red Bull, American Express and General Mills.

Nothing sells like success

Effective mobile marketing benefits not only the brand but also the mobile marketing company in terms of revenue and profitability. For young companies seeking funding, the good news is that there are plenty of success stories to emulate. Some examples:

• In November 2008, Cricket Nirvana wanted to build awareness of its new mobile Internet site throughout India and parts of Asia Pacific. Its partner, mKhoj, designed banner ads with content--including live game scores--that refreshed every 60 seconds. Within the first week, the Cricket Nirvana mobile site averaged an incremental 72 percent page views per day. In the first three months, the site hit 8 million page views per month. The campaign helped Cricket Nirvana increase its brand awareness and its user base, and it encouraged repeat visits from existing users. As the traffic grew, so did the monetization opportunities because the site began to attract ads.
• In December 2008, Intel worked with Madhouse to launch a treasure hunting campaign on the mobile Internet to promote the Intel Centrino 2 processor. The campaign featured a mix of mobile ad formats, including video, banners and text links. In 18 days, 13,574 mobile users participated in the game, and 8,271,838 icons were collected.
• In February 2009, Hyper worked with Golden Gekko on behalf of Universal Pictures to develop an iPhone application to promote the new movie "The Unborn." The app was the world's first interactive movie trailer, and with no promotions, it went straight to the iTunes App Store's 10 most-downloaded free apps and stayed there for two weeks. Universal Pictures was so pleased with the campaign's success that it's now integrating mobile into its overall marketing strategy for the remainder of 2009.

These individual success stories also benefit the sector as a whole by helping convince other brands and agencies that mobile marketing is highly effective, with a clear, fast ROI. In the process, these successes also help convince VCs that the sector is a good place to look for young companies capable of becoming profitable quickly and self-funding soon after that.

"Mobile advertising is clearly a maturing medium," says Hadl, who also is an adviser to the VC firm U.S. Venture Partners. "Marketers are finding real value and ROI."

The bottom line is the bottom line. Demonstrating fast and significant ROI to customers and investors alike is critical. Today's funding environment is cutthroat and is focused on the business basics not on the hype. The opportunity that mobile brings allows innovative companies to deliver unprecedented value in a way that has never been possible before. For these reasons, it is the hot space to be in.

Mike Wehrs is president and CEO of the Mobile Marketing Association (MMA). For more information, visit www.mmaglobal.com.

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