Making Science

Informa Forecasts Mobile Ad Growth

David Murphy

Informa Telecoms & Media is predicting over $11.35 billion (6.2 billion) of
advertising spend on mobile channels by 2011, affording consumers
cheaper mobile content, as advertisers come to terms with the medium

The next 12 months will mark the start of a sharp upturn in mobile
advertising spend as the proliferation of cheap, high-quality
multimedia handsets and the widespread availability of high-speed
mobile networks reaches a critical point, according to a strategic
report just issued by Informa, Mobile Advertising Services: generating
revenue through subsidised content. Informa says that in 2007, mobile
advertising spend will more than double from 2006 levels, to over
$1.5bn.
The potential economies of scale that the mobile channel offers
advertisers will prove a powerful draw, Informa believes. It forecasts
that there will be over 2.1 billion mobile subscribers worldwide by the
end of 2006, rising to nearly 4 billion in 2011. But it says there are
several issues that need to be addressed if advertisers are to realise
this reach. These include consumer acceptance, technology (screen size,
available bandwidth, interoperability between operators and handsets),
and industry regulation.

"Mobile advertising is not new; it's been around in some form since
2001," says Informa Senior Research Analyst, and principal author of
the report, Nicky Walton. "In the last 18 months there have been a
number of developments that are encouraging interest in the medium.
There are now more users with advanced multimedia handsets and the
number of subscribers who connect to mobile broadband via 3G and HSDPA
is growing significantly. Consumer interest in multimedia mobile
content is also growing and areas like mobile TV, and 'off-portal'
search are becoming more popular."

Brands are clearly eager to take advantage of the intimacy of contact
that mobile advertising promises, Informa says. With information available to
operators, it is theoretically possible to create very targeted
campaigns. The mobile is also a useful tool to track and measure the
success of campaigns, with users texting, calling in or clicking on
links all giving direct feedback on the effectiveness of a campaign.
But gaining access to customer information from operator customer
service records could prove complex, Informa says, both from a
technical perspective, and due to regulation governing the use of
customer data.

Findings from an industry survey conducted as part of research for the
report highlight that the only areas in which consumers are currently
"not at all willing" to receive mobile advertising was via SMS/MMS.
Other modes of delivery for mobile advertising will include via mobile
music delivery, mobile game delivery, Mobile TV and video, idle-screen
advert delivery, and via user generated content and community sites. It
seems that consumers generally accept the concept of mobile advertising
in return for 'free' media and applications on their handsets.

Operators are also pushing for the uptake of mobile advertising on
their portals. With stiff competition on voice and data services and
pressure from consumers to move to flat-fee tariffs, mobile operators
are urgently looking for new ways to increase average revenue per user
(ARPU), Informa says.

New mechanisms for mobile advertising enable advanced models for
selling value-added services to consumers, as well as providing revenue
from the advertisers directly. This provides a strong incentive for
operators to address compatibility and interoperability issues.

"2006 marks a change in attitude to the mobile channel as a viable and
competitive advertising channel says Walton. As operators push for
new revenue streams and advertisers search for more immediate, intimate
access to consumers, and the technology becomes more effective for
advert delivery, we'll see dramatic growth in this space."

The report costs 1,250 for a paper copy, 1,875 for a single-user
licence, or 2,500 for a PDF plus paper copy. Multiple-user price
queries should be addressed to Informa on: +44 (0) 20
7017 5555 (UK) or +1 508 453 4894 (US).
For more information, or to buy
the report, click here.