Mobile Marketing in a Flash

MoreVisibility - October 24, 2007

Mobile Marketing in a Flash

Expectations of mobile search and local Mobile search in particular are rising. What took the desktop Internet roughly a decade to develop is happening in a much more condensed period of time in mobile. However, at this point, advertising on mobile phones is a tiny business. Last year spending on mobile ads was $871m worldwide according to Informa Telecoms & Media, compared with $24 billion spent on traditional Internet advertising and $450 billion spent on all advertising combined. That said, analysts are predicting that Mobile advertising is an industry that’s about ready to explode. Although the market’s explosion has been prematurely predicted in the past, research firms are confidently forecasting that annual global expenditure will reach $11 – $20 billion by 2011. In the United States alone, Mobile search advertising revenues are projected to reach $1.4 billion in 2012. Therefore, major players in Online advertising, such as Google, Microsoft, and Yahoo, as well as the major Mobile carriers, undiscouraged by previous unfulfilled expectations, are maneuvering to capitalize on the emerging market.

What has everyone so excited about Mobile advertising? One reason is what has happened on the Internet. Ad spending on the Web is growing at a compound annual rate of 18.3% and will reach $73 billion in 2011, according to PriceWaterhouseCoopers. The consultancy says Internet advertising will comprise 14% of the entire global advertising market by that year. In addition, the 2.5 billion Mobile phones around the world can potentially reach a much bigger audience than the planet’s billion or so personal computers. The number of Mobile phones in use is also growing much faster than the number of computers, especially in poorer countries. Better yet, most people carry their Mobile with them everywhere–something that cannot be said of televisions or computers.

Yet the biggest selling point of Mobile ads is relevance. Advertisers believe that about half of all traditional advertising does not reach the right audience. Less effort (and money) is wasted with Online advertising: half of it is sold on a “pay-per-click” basis, which means advertisers pay only when consumers click on ads. But Mobile advertising through text messages is the most focused: if marketers use Mobile firms’ profiles of their customers cleverly enough, they can tailor their advertisements to match each subscriber’s habits. Some carriers are already starting to take steps to make it possible for advertisers to target particular demographic categories.

The main problem with Mobile marketing is that phones are considered personal space, which makes them appealing for marketers but is dangerous ground for push advertising. While consumers are accustomed to ads on television and radio, they consider their Mobiles to be personal devices. A flood of advertising might offend the Mobile audience, and thus undermine its own value. Another issue is that operators have lots of databases with information about their clients’ habits that would be of great interest to advertisers, but privacy laws may prevent them from sharing it. Lastly, advertisers are not used to advertising via this channel. Traditionally they are familiar and comfortable working with print, TV, radio, and Internet advertising. Utilizing new forms of advertising will take some time to get used to.

At the moment, most Mobile advertising takes the form of text messages, since few customers have taken to more elaborate services that allow them to download music, games, and videos, and to surf the web. Only 12% of subscribers in America and Western Europe used their Mobiles to access the Internet at the end of 2006. Most people think Mobile screens are too small for watching TV programs or playing games, although newer models, such as Apple’s iPhone, boast bigger and brighter screens. Although text-driven Mobile advertising has been the main driver in the industry, telecoms firms are also beginning to deliver ads to handsets alongside video clips, web pages, and music and game downloads, through Mobiles that permit such things. In the future, Mobile advertising will become more interesting when richer content on wireless devices becomes more widespread, especially video and TV. The richer the media, the richer the consumer experience, which drives sales and brand recognition.

With technology developing by the minute Mobile marketing is the field that is sure to substantially grow.