Delivering opportunities for highly-targeted mobile advertising is a key goal of many of the ten finalists in the Israel Tournament of the 2010 Mobile Innovation Grand Prix competition.

Take XSIGHTS’ image and text recognition software, for example, which processes pictures captured by the user’s camera phone and then sends the user relevant content, potentially supported by targeted advertising. The user doesn’t need dedicated software on their handset, as the images can be transmitted by video call or MMS to be processed in the cloud by XSIGHTS’ algorithms, which the company claims can cope with blurred and dimly-lit pictures.

Location-based advertising opportunities could also arise from the data generated by waze’s crowd-sourced navigation app for GPS-enabled handsets. As soon as a user starts driving, their handset starts sending back speed and direction information to waze’s servers. By aggregating data from many different drivers, waze creates maps showing real-time traffic flows and then advises its users on which is the best route to take to their destination. Telmap also enhances basic navigation and localised search services, this time using widgets to personalise the end-user experience, again creating a potential platform for targeted advertising.

On a more whimsical note, TuneWiki’s Lyrics Legend app enables users to listen to a music track, while watching the lyrics appear in “bubbles” promoting the brand of the sponsor. If the user bursts the bubbles, which could be designed to resemble Coke cans or McDonald’s burgers, in time to the music, they score points. Taking a different tack, MeeMix’s software platform is designed to sell more entertainment content by sending users recommendations on what music tracks and other media to purchase based on their buying history.

By aggregating social networking, IM and VOIP services in one client, fring can also create opportunities for personalised advertising, as well as potentially generating revenues from “premium” communication services, such as terminating calls to conventional telephone numbers. Fellow-finalist Mobixell Networks provides operators with a platform that enables them to send customers, who have opted in, MMS messages with tailored content, promotions and benefits that they can then forward on to their friends.

While all of these new services will boost operators’ data traffic, they will clearly only generate more traffic revenues if the user has to pay an additional fee beyond a flat-rate plan. For many users, that won’t be the case. So, the question is this: Will the rollout of a new generation of sophisticated and, often personalised, apps and services lead to a major step-change in the advertising revenues generated by the mobile medium?