Messaging software and service provider Critical Path Inc. has launched AdDirector to let free service providers generate revenue from their existing mobile messaging assets via targeted advertisements.

Mobile advertising is growing rapidly in both revenue and importance, with analysts estimating that worldwide spending will reach tens of billions of dollars by 2012. Consumers have indicated that they are more open to receiving advertising as part of their mobile services.

"Carriers face an increasing demand to manage the costs of critical non-revenue-generating consumer services while also trying to grow revenue from new services," said Nikki Gore, vice president of marketing for Critical Path, Toronto.

"AdDirector extends advertising business models to online and mobile services," she said. "This allows our customers to offset some or all of the subscriber costs that pose a barrier to usage while at the same time protect revenue streams."

Ms. Gore said that the mobile channel provides a compelling opportunity for advertising due to its ability to reach a more targeted audience in a highly relevant fashion.

Research by Vanson Bourne on behalf of Critical Path identified that 79 percent of mobile phone users are willing to accept ads attached to mobile email messages if the service was free.

Through AdDirector, service providers can deliver targeted advertising through multiple channels including portals, online and mobile email, SMS and MMS.

Multiple advertising formats are supported. The AdDirector tool provides the service provider with the flexibility to define multiple services for advertising-funded and -sponsored models.

"For the most part, it's about enabling customers to experience different revenue streams," Ms. Gore said. "On the mobile side, we do mobile email and in order to drive adoption, if service providers can ad fund it, they can help to create a more attractive adoption."