Mobile Advertising - A contrarian view April 13, 2007
Posted by chetan in : Mobile Advertising , trackbackEnders Analysis noted in their research today:
· Mobile advertising has recently been talked up by both mobile operators and media companies, with some analysts estimating that it could be worth more than $11 billion by 2011, or over one third of the current internet advertising market
· The reality, however, is that the current market is very small (c.€100 million globally), with even this supported heavily by experimental campaigns, and it cannot grow significantly without mobile browsing increasing dramatically, whereas adoption is currently stable or even shrinking in some markets
· The economics of advertising generally depend on a mass market of consumers spending hours a day viewing or listening to a medium, not occasional usage by a hard-core group of techies, and unless the mobile internet can be brought to the masses mobile advertising will remain very niche
Comments»
While some people or group are skeptical about the future of mobile advertising, I like to look at it from a first-mover perspective. The cost of experimentation will prove very expensive to many companies particularly those emerging companies but a pioneer in any industry usually gains majority of accounts and significant jump in profits. Absorb initial losses and take risks in return for something really big!
I agree with the idea of bringing mobile marketing to the masses - I think this is the only way to expand this particular industry.
I think the market where it will grow in significantly in the short term is India and I’m certainly very interested to see how that market grows. With 6 or 7m new subscribers added each month and browsing costs of next to nothing, it means that inventory will increase and the number of eyeballs increases. Until other markets sort out their pay as you go data rates, the mobile industry, not just advertising, will be on hold.
Mobile advertising is working for me and my clients in the UK - we just don’t have enough inventory. There are simply not enough wapsites out there to advertise on [yet].
I agree with the essence of your post. As I have mentioned on my blog, the cost for consumers to use mobile data services remains high, and this creates a huge barrier to moving mobile advertising beyond early stage experimentation.
As you point out, advertisers want to reach a large number of consumers. I’d argue that they will quickly move beyond brand advertising (viewing and listening is OK) to product advertising (interaction is necessary).
While mobile technology appears to provide some really advantages vs. web when it comes to interaction, mobile behavior models introduce additional complexities. I will elaborate on my blog later today.
Regardless, I think its pretty critical for mobile advertising to work on mobile — not just for the mobile infrastructure guys and the MNOs, but for the advertisers and content providers, too.
[...] 17 Apr 2007 Mobilizing Advertising Posted by Ted Wugofski under business models , D2C , mobile advertising , user experience , mobile, wireless , google Chetan Sharma writes a contrarian view to some analysts recent market size projections. I agree with his general position and offered a few comments, to which I am extending here. [...]
For mobile advertising to be successful, brands must feel that they can ‘reach’ mass market consumers through this new medium. I recently discussed this topic with the Yankee Group who indicated that most big brands feel that if they can’t reach the ‘magic’ 20 million consumers number than the advertisement is not worthwhile. The only way this number will be achievable in mobile is if companies start to make accessing and discovering the mobile Web a more user-friendly and personalized experience. I think Yahoo! has done it right with their new Yahoo! Go on-device portal service. Hopefully other brands will follow their lead to drive greater adoption of mobile Internet services. Only then will consumers start to enjoy more ‘free’, mobile advertising subsidized services.
Thanks guys for writing in. you all raise excellent points. Reach is the magic word to get advertisers and agencies interested and they want to get it done in a frictionless way, meaning, they don’t like to 5 providers and 3 carriers to run a campaign. Mobile is part of their digital strategy and like fewer touch points to make their lives a bit easier. Of course, everyone is throwing in 50K to test things out, but to branch out to 6-7 figure mobile ad budgets, tools need to be in place that allow for easy launch and tracking of campaigns across multiple modalities and across multiple carriers and finally across multiple geographies.
Thanks