Tuesday, May 8, 2007

Exponential Growth expected on Mobile Advertising

The world market for mobile advertising is expected to be worth about $3 billion by the end of 2007, and is likely to reach $19 billion in value by 2011 if mobile search and video advertising is included.

A recent study from ABI Research said some of the highest levels of spending will come in the broadcast mobile video space, with spending for broadcast mobile video advertising alone expected to hit $9 billion by 2011. By 2011, the report said mobile video will surpass SMS as a source of mobile advertising spending, due in part to mobile broadcast networks' presence in all major markets.

$19 billion in value by 2011 is certainly a figure that would stir immediate frenzy to the VC community and the Internet Giants into investing and acquisition mode. Acquisition of ScreenTonic by Microsoft and the on-going negotiation between Third Screen Media with AOL are certainly signs that mobile advertising is heading for prime time.

Mobile advertising may be risky, but definitely an enticing business model as the road ahead though bumpy but I m sure many analysts will agree with me that the future is bright. Unlike the PC, a mobile device offers a uniquely personalized communications channel. Carriers worldwide have quite a bit of information about their end-users: name, sex, age, geographical location. And depending on the handset and plan their users have purchased, the carriers probably also know something about their economic status and credit record. But they don't like to release this information to third parties because they want to protect and control their customers.

Mobile advertising is also at varying levels of maturity, depending on the market or country. In Europe and Asia, mobile marketing is fairly well developed. Madhouse Inc, based in Shanghai, China had rolled out several successful mobile advertising campaigns with big brands like Apple, Dell, Pepsi and Nokia. Japan is certainly leading the Asian pack and mobile advertising revenue is reckoned to surpass $1 billion by 2007 in Japan.

I must admit that most are still in the process of testing the water and they don't typically allocate a set percentage of their annual budgets to mobile but i m sure this is changing as more and more big brands are beginning to see the true value and power of mobile advertising. It wont be long before mobile advertising will go prime time in china and rest of the world.

Another factor why the roll out of mobile advertising has been slow is due to the lack of experience and understanding of major ad agencies with mobile marketing campaigns, and technologies such as MMS and mobile search that are still in the early stages of deployment. Their slow pace in exploiting opportunities in mobile marketing and advertising, however, has opened the door for a number of specialized agencies, aggregators, and other enablers.

But i m sure the mobile advertising landscape is changing rapidly with more and more mobile users accessing the internet from the mobile phone. The road ahead though bumpy and risky, i m confident it will be equally exciting and promising. Feel free to comment.


Anonymous said...

Alvin, very nice blog. That is a pretty interesting diagram of the photo-linking idea. where does it come from?

Steven Mc

Alvin Foo said...

hi steve, i had picked it up from one of the presentation paper that i was reading. thanks for your comment.