Monday, April 23, 2007

PAN-IIT event on “Mobile Advertising - Technical Challenges and Business Opportunities”

An interesting thing to look at is what the mobile advertising industry was forecast to be by 2005 by analysts at the turn of the century—between $890 million and $6.8 billion. In 2006 the actual mobile advertising market was $421 million. On the panel everyone was bullish about the industry (not surprising since they’re all in the industry, Infospace, Medio, Google, Voicebox) but they cautioned it will take time because the “reach” is not there yet.

A comparison was made with Japan: “Japanese Mobile Advertising market: Clearly, Japan has had more experience with Mobile Advertising than rest of the markets. In 2006, the average revenue/user/year stood at around $4. For US, this figure was less than $1.”

Mobile Advertising means different things to different people: Depending on a company’s focus, mobile advertising means different things to different companies. There are over a dozen different channels or strategies at our disposal in this framework, for instance -

¨Messaging – SMS/MMS
¨WAP/XHTML – on-deck/off-deck
¨Search – Mobile, Media, Local
¨Video – Unicast, Multicast
¨Audio – Streaming, Podcast
¨Downloadables – Games, Applications (BREW/JAVA) – Interstitials/In-app
¨Directory Assistance/ Call Inst.
¨Code based – Barcode, QRcode, Images
¨Bluetooth, NFC, WiFi, others

No one provider offers capabilities across a majority of them, you could argue that there is no need but from an advertiser’s perspective, the situation demands aggregation and simplicity.

Brendan Benzing, Infospace talked about the “ecosystem friction” where we have too many players for advertisers to deal with and an aggregated or simplified view is needed for the advertisers to jump in with both feet. Coming from the broadcast and Internet marketing background at TW/AOL, Brendan thought measurement authority like Nielsen is a must.

On the question of targeting, Brendan and Jai , Medio Systems mentioned the use of demographic data available from the carrier to make search results (and advertising) better. Jai went to say that recommendation is another form of advertising which appears non-intrusive and is actually useful for the consumers. Amazon gets a good chunk of their revenues from recommendation clicks. I myself find them quite useful and end up buying dozens of books this way every year.

There was general agreement that industry needs to focus on user’s needs rather than CPC and CPMs at this stage in the game. And that user privacy issues should stay at the forefront. The carriers need to fix the voice quality, reduce data rate plans, and make things usable before consumers are going to tolerate ads.


Dominik said...


Quote: "In 2006, the average revenue/user/year stood at around $4. For US, this figure was less than $1."

That sounds enormously little... where do you get that number from?

Alvin Foo said...

hi dominic, i read it somewhere, cant recall where i got the figure. my apology as the blog was written more than 1 year ago.