Saturday 28 February 2009

Mobile Advertisement may help industry achieve salvation

I have blogged in past that mobile advertisement industry will probably grow and its the same feeling that has tempted companies like Nokia to jump in this arena. Unfortunately the latest news is that Nokia is planning to cut its workforce in the advertisement division:

Just a year after establishing a division dedicated to mobile advertising networks, Nokia has slashed half the UK-based unit's workforce, with the loss of about 30 jobs.

The numbers may not be huge in the context of major vendors' cutback programs, but it is indicative of the gap, in the short term at least, between Nokia's dreams of turning into a web services giant, and the reality of keeping its conventional business ticking over through a downturn.

All is not lost though. As more consumers surf the Web on handsets like the iPhone 3G, the U.S. market for local mobile search will balloon from $20 million in 2008 to $1.3 billion in 2013, according to a report from the Kelsey Group.

The report, "Going Mobile: The Mobile Local Media Opportunity," said only about 20% of U.S. cell phone subscribers are on the mobile Web right now, and only about 5.2 million are doing searches. Because of this, SMS advertising is the dominant form of mobile advertising.

But the firm said habits will change over the next few years, and more mobile data networks will get rolled out. Local search in particular will be a beneficiary, and it's expected to grow in volume from 28% to 35% by 2013.

There is also interesting analysis on Mobile Advertisement market in The Mobile Broadband Evolution whitepaper:

Mobile search ads are billed to create their own sector of business in the advertising space. According to ABI Research (Mobile Search Critical as Search Advertising Races Towards $5 Billion in 2013. ABI Research. 16 April 2008), the market for mobile search ads is projected to jump from $813 million in 2008 to $5 billion in 2013. Over the same period, SMS searches will increase nearly six-fold, from 13 billion to in excess of 76 billion.

Juniper Research expects nearly 1.3 billion users – 30% of the mobile subscriber base – to use local mobile search services by 2013.(Local Mobile Search Finds Favor. Juniper Research. 29 April 2008) Juniper believes that advertising supported local search will be the key to driving this sector, with the caveat that the effectiveness of advertising in this sector will vary widely according to local conditions. The best equipped regions are thought to be Western Europe and North America, as countries within these regions typically have good local digital information suppliers such as Yellow and White Pages, as well as good mapping data. Total mobile search revenues are expected to reach $4.8 billion by 2013 with the caution from Juniper that “advertising overload” might act as a disincentive to consumers.

Every six months, The Mobile Marketing Association updates its global Mobile Advertising Guidelines providing advertising guidelines and best practices necessary to implement mobile advertising initiatives, including mobile web banner, MMS messaging, downloadable applications and mobile TV and video. (Mobile Marketing Association Publishes Updated Global Mobile Advertising Guidelines. Mobile Marketing Association. 28 October 2008.) With guidelines in place, consumers can expect to see more ads on mobile phones. Informa Telecoms & Media projected the mobile advertising industry would be worth $1.72 billion in 2008 and will rise to $12.09 billion in 2013.(Mobile Advertising: Cutting Through the Hype, 2nd Edition. Informa Telecoms & Media. 10 July 2008) According to eMarketer, worldwide spending on mobile advertising reached nearly $2.7 billion in 2007 and was expectedo each $4.6 billion in 2008, rising to $19.1 billion by 2012. (eMarketer: Worldwide mobile ad spending to hit $19.1 billion by 2012. eMarketer. 27 March 2008.) Most ad dollars will go to text messaging; SMS, MMS text-messaging and mobile instant messaging. Mobile email will account for more than $14 billion of the $19 billion total expected in 2012; up from $2.5 billion in 2007. The expansion of display and search advertising on mobile phones worldwide is expected to reach $1.2 billion and $3.7 billion respectively by 2012.

Arthur D. Little predicts that in the coming years, mobile advertising is poised to be the next major digital media platform for brands to reach customers, and the key telecoms players have a great deal to gain from bringing their services to the market early. (Little, Arthur D. Report Forecasts 60% Annual Growth in Mobile Advertising over the Next 4 Years. 20 May 2008.) Roughly 60% annual growth in mobile advertising spending over the next four years is predicted in its 2008 report. Future mobile advertising formats will be more interactive and dynamic than online advertising or mobile advertising today, including call waiting, idle-screen advertisements, mobile TV ads, games and voicemail ads. Push ads via SMS/MMS are another traditional option. The Arthur D. Little report cites the Blyk case study: Blyk, a UK-based Mobile Virtual Network Operator, successfully launched large-scale mobile advertising to early adopters with a 29% response rate by using highly defined target groups and user data to achieve such a positive rate compared to .05% response rate for typical online marketing campaigns.

A report from GfK and social network website, Limbo revealed that mobile advertising awareness grew 33% in nine months, suggesting an increased allocation of advertising dollars to mobile formats through the first nine months of 2008. Nearly four out of ten, or 104 million, Americans with a mobile phone recall seeing advertising on their devices between the months of July and September 2008, marking the first time the number of Americans aware of mobile advertising has exceeded 100 million in a three month period. (More Than 100 Million Americans Viewed Mobile Ads in Q3 2008. Cellular-News. 3 November 2008) The most commonly viewed mobile ads were in the form of SMS messages, reaching 60 million consumers – a 42% increase in nine months. The report also noted that although Mobile Web advertising had about half the reach of SMS ads, it also saw strong growth, with 31 million people recalling ads in this format.

A report by Media Analyst Screen Digest examined the emerging market for rich media advertising delivered to consumers via their mobile phone in the form of TV, video, games, user-generated content (UGC) and music. Screen Digest projects the market for rich media advertising on mobile will reach $2.79 billion by 2012, with global mobile TV advertising accounting for the lion’s share at $2.44 billion. By 2012, advertising will account for 20% of mobile TV revenues. The reason for success? More ubiquitous than the PC, the mobile method offers the opportunity to send personalized messages to people in all markets. Advertising sent via mobile phones reaches the recipient directly, wherever they are, at any time and location, offering effective targeting as well as interactivity and consumer engagement. “The potential is huge, and some of the world’s largest companies are vying for control of what they see as the next major advertising medium,” stated David MacQueen, co-author of the report.(Mobile Advertising Using Rich Media Formats. Screen Digest. 29 April 2008.)

Key findings of survey conducted by Transverse and iGR consultancy provided insight to mobile customers’ phone use and their willingness to view advertisements in exchange for discounts to their monthly service bill. “Mobile advertising has taken on many forms, and is generally considered to be obtrusive. But when consumers are given the choice to receive ads and share their usage patterns in exchange for discounts, mobile advertising has the potential to be highly targeted and highly effective,” stated Iain Gillott, President of iGR. (Survey Finds 61 Percent of Mobile Users Would Agree to View Advertising for Discount on Monthly Bill. FierceWireless. 18 November 2008.) Among those surveyed, 46% said that a 25 to 50% discount on their monthly bill was enough of an incentive to provide access to their usage patterns, including browsing, email and texting habits, as well as location – but not personal information such as the content of texts and emails.


Anonymous said...

Interesting content.

Just wanted to share some information that I came across in a few articles discussing about recession and how we can adopt a different marketing strategy to promote our business. It’s quite eminent that most of the advertisers and businesses are taking to online advertising medium since the Internet has now become a necessity to reach global audience. However, even today there is still a huge chunk of people who do not access Internet and to reach this segment of the society; we can rely on the print media. This in fact would be a great choice for anyone whether they are looking out for global, national or local exposure.

Since the economies are now at the bring of recession, it’s a good idea to consider print media as well in the marketing mix so that you can extend your reach further to get additional traffic to your website or business. You can try a blend of online and print advertising through a reputed ad agency that can help you professionally.

Zahid Ghadialy said...

I agree. You may be surprised to hear that but I read few months back that radio advertising is one of the most effective mediums. The reason being that in TV and print advertisements you can choose to skip them but what generally happens with Radio is that its going in the background and people dont flick radio channels or cant ignore them.

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