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Thursday, 22 May 2008 |
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Mobile advertising next big thing. Or not.
A new analysis from 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 market early. Forecast figures predict roughly 60% annual growth in mobile advertising spend over the next four years. The report, ‘A Mobile Playground’, published Arthur D. Little’s TIME (Telecommunications, Information Technology, Media and Electronics) practice, includes predictions about the size and content of the European mobile advertising industry, as well as offering both telecoms operators and advertisers insight into what is driving interest in mobile advertising and how they can best navigate the often unchartered waters of advertising to consumers via a hand-held device.
Key findings include:
· mobile advertising is the next step in the evolution of the online advertising industry. With the rise of mobile broadband unavoidable – Arthur D. Little recently predicted 50% European penetration over the next five years – the report argues that mobile advertising will grow alongside mobile broadband and build on the interactivity of IP technology and mobile devices’ unique functionality to develop new forms of online advertising particularly suited for the hand-held web surfer
· only 5% of mobile operators’ revenue is currently generated through advertising, compared to 16% in the wider media world. If operators do not identify and secure their role in the provision and delivery of mobile advertising, they risk losing a major revenue stream to traditional Internet advertisers such as Google or Yahoo!. Telecoms providers risk falling behind their competition in the Internet advertising space if they do not begin developing the technology and infrastructure to eventually deliver large-scale, multi-format mobile advertising to their customers - either by forming partnerships or through specialist acquisition.
“Advertisers prefer to deal with a single broker when launching a mobile phone ad campaign rather than striking deals with individual carriers across the markets,” judges Klaus von den Hoff Global head of Arthur D. Little’s TIME Practice. “Making mobile advertising a true success requires cooperation among operators - something mobile operators typically haven't been very good at.”
But not everyone is convinced that mobile advertising will be a money spinner any time soon. In another new report – ‘Future Mobile Operator Business Models: Broadband, Partnerships, Wholesale and Mobile 2.0’ - Informa Telecoms & Media looks at strategies mobile operators need to be adopt to protect their profits and survive the onslaught from Internet firms and business models. Informa notes that advertising is touted as a lucrative new revenue stream which would complement an Internet access strategy, but the analyst firm does not believe that this will translate into a significant operator revenue stream within the next five years. More promising, according to Informa, is aggressive cost cutting. The company reckons lower handset subsidies, outsourcing and network sharing all offer huge scope for lowering OpEx levels, as does the migration to all-IP infrastructures.
John Williamson |
