Mobile advertising yet to convince big brands

2nd June 2008

The mobile advertising industry has become consumed by short term hurdles and must focus on long-term strategic issues if it is to become a truly multi-billion dollar industry, according to the latest report from Informa Telecoms & Media, Mobile Advertising: Cutting through the Hype.

Informa forecasts that the global mobile advertising market will be worth US$12.09 billion by 2013. In 2008 mobile advertising will be worth US$1.72 billion, with 80% generated by the mobile content providers.

“The mobile content market is creating the mobile advertising opportunity, while the big brands remain sceptical about the return on investment that will justify the premium rate card already associated with this emerging medium,” says report author Nick Lane.

“The situation will change, but the plethora of companies looking to get a slice of the revenues must remain patient. Releasing the big brands’ spend is key to unlocking the potential of mobile advertising”.

The report claims the majority of early-adopter big brands are yet to transfer more than 0.5% of their advertising budget onto mobile. While this is in part down to the much-maligned issues of non-existent measurement and premium pricing associated with early formats of mobile advertising, the report argues that these are short-term hurdles. The mobile advertising industry would be better served concentrating on educating the consumer and providing a visible and measurable return on investment to the brands.

“There is an absence of innovation in mobile advertising that has enabled the industry to accept Internet-based models devoid of the functionality and capability that mobile technology delivers,” Lane continued.

“True mobile advertising does not exist today; what we are referring to is ‘advertising on mobile’. When mobile advertising combines user profiling, location and communication with unique mobile inventory, the industry can justify charging a premium rate over existing immeasurable advertising channels.”

The report makes a number of recommendations designed to spur the adoption of mobile advertising. Recommendations include utilising unused mobile inventory such as banner ads to advertise mobile advertising: a call-to-action to encourage consumers to visit a WAP site explaining the benefits, such as subsidised or free mobile services, in exchange of receiving advertising on their mobile device.

Further recommendations include an “advertising mode” button to allow the consumer to control the extent of adverts being delivered to his mobile device, based on activity and location requirements.