Today’s advertising crisis needn’t threaten mobile content at all. In fact, the mobile industry can exploit the coming shift in media buying patterns to establish itself firmly in the emerging landscape.

The word is out: advertising doesn’t work anymore, and the world’s biggest brands are looking for new ways to hawk their products. This doesn’t mean that no one will be left to pay for professionally developed media – only that the boundary between products and programs is growing decidedly less discreet.

Most existing sponsorship models have become obsolete in the age of channel surfing, Tivo digital video recorders and a public generally less tolerant of advertising clutter. A torrent of new studies have proclaimed what most television viewers have known for a decade: advertising simply doesn’t work. The mobile content area – and by this I mean everything from micro-videos to massively networked games – has yet to develop a compelling model of sponsorship, thank heavens.

Media was always a pay-per-view proposition. The audience got to watch a program, and paid for it in the form of their attention to the sponsor’s messages. But somewhere along the way, and thanks to their newfound ability to zap past the ads, audiences stopped holding up their end of the agreement. Meanwhile, cable and satellite TV expanded the number of available channels by more than an order of magnitude, fragmenting audiences into much smaller segments. Businesses tired of paying higher fees for less effective advertising shown to fewer people didn’t know where to turn – until now.

Pass the Reese’s Pieces

It was over 20 years ago when Steven Spielberg – unable to get permission to use M&M’s candy – chose Reese’s Pieces as bait for the alien in his movie E.T. and launched the first modern use of brand placement. Reese’s Pieces sales shot through the roof, and the race was on to find effective ways of featuring cars, pills and computers in just about every Hollywood TV show and movie.

For the most part, these more intentional product placements failed. They either called attention to themselves or proved too subtle to get noticed. Brand specialists soon realized that they’d need to make their products more organic to the programs they were using as media for their commercial messages.

In America, this brought us sponsored television reality shows such as The Restaurant, about the opening of a very real restaurant and its struggle towards profitability. The program is paid for by American Express’ small business unit as a way of promoting the various services it offers new businesses, like the one in the show, which makes ample use of American Express.

But even these worthy efforts pale in comparison with the increasing number of narratives literally built around products so completely that the advertising element becomes invisible, even though the brand proposition rings louder than ever.

Consider the Tom Hanks movie Castaway: it was a huge gamble for Federal Express, which lent its planes, infrastructure and brand identity to a film about a fictional employee who, after being marooned on a deserted island after a FedEx plane crash, living off nature and FedEx packages, still dutifully delivers the one package he just couldn’t open.

Or an entire subplot of the television series Sex In the City in which a young hunk gets his first big modeling job as the “Absolut Hunk” for the vodka company, which was so successful it led to the establishment of a new vodka drink in bars across America – while virtually no one in the viewing public realized the story had been written around the brand.

And of course we can’t forget American Idol, sponsored in the US, in part, by AT&T Wireless, whose customers exclusively can vote for the winner by SMS.

These sorts of branded entertainment experiences are very likely the future of free media, and the replacement of the more interruptive forms of messaging advertisers have staked their businesses on until now. New firms, such as Madison & Vine, are specializing in developing media experiences from the ground up that educate and entertain audiences about their clients’ brands.

Climbing A Wall

Still, something feels corrupt about a television show or movie whose plot is built around a brand. It’s because we’re used to an invisible but real wall between our advertising and content.

No such wall exists, yet, for mobile content providers, who haven’t yet developed effective ways of delivering content, much less commercial messages. The few who have dared to send advertisements to customers via SMS or interruptive screens have paid for it dearly in loss of goodwill.

I believe that two main factors make the mobile arena a much more promising environment for new forms of branded media experiences more integrated with the propositions of the brands they are meant to support.

First, and most importantly, mobile users do not yet have set behaviors and expectations regarding their entertainment and services. True enough, making phone calls is practically in our cultural DNA; but even SMS is a developing form of communication, with new ways of organizing buddy lists and reaching out to select groups of friends emerging every month. The fact that there is not yet a set of formal conventions in this medium is a plus. It means that they can be invented around the new economic reality, rather than last century’s advertising revenue model. And no one will get upset about corrupting anything.

Second, and even more important, as narrative storytelling platforms, handheld mobile devices will always be inferior to television and movie screens. But narrative dramatic stories will probably never be the best way of conveying a brand experience anyway. Though Castaway was a brilliant film for conveying the heart behind FedEx, it did very little to enhance or extend anyone’s appreciation of the brand.

Cell phone-based games, on the other hand, offer users the opportunity to get involved in pursuing a goal or completing a story themselves. A FedEx-sponsored game, for example, could demonstrate, experientially, the company’s global reach, its ability to track, the movement of multiple characters or packages or any particular brand attribute the company wants.

Intensifying Experiences

While films and television shows offer viewers an opportunity to intensify their relationship with a brand, mobile devices – properly implemented – offer users the opportunity to intensify their relationships with one another, through the brand that has sponsored their experience. This is a key distinction most brand managers are just beginning to understand: people don’t want to relate to a company, they want to relate to one another and will thank any company that helps them make another valuable human-to-human connection. (Boys don’t get girlfriends so that they have an excuse to wear expensive jeans. They buy the expensive jeans so that they can get the girlfriend.)

So if a brand is an excuse for a meet-up in real life, interactive mobile devices are clearly capable of offering experiences more consistent with brand attributes that traditional media cannot.

Even when social contact is not the immediate goal, mobile devices can offer experiences that extend well beyond the boundaries of their own screens. While a branded entertainment experience on TV is limited to what can be done in a living room with the TV on, branded mobile experiences are limited only by our imagination. And offering utility could prove an even more effective brand extension than entertainment.

Car rental companies could offer map programs, city guides and emergency contacts for traveling executives. Fast-food chains can offer calorie diaries, games that let kids assemble burgers or practice sustainable agriculture. Trendy clothing designers can offer games where girls pass secrets. A sport shoe company can alert member customers of impromptu appearances of its sports legend spokesmodels.

Mobile platforms offer companies a way to extend the experience of their brand beyond the media and into the real world. Mobile companies will have to be creative enough to think up some of these experiences or partner, quickly, with people who can.