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Operators Must See the Big Picture when it Comes to Mobile Advertising

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Mobile operators stand to gain by investing in mobile advertising, but only if they ensure it is implemented correctly, according to a new report published this week by Analysys. "Mobile advertising could provide an additional revenue stream for operators but it must be implemented carefully. Flooding mobile phones with advertising would destroy consumer confidence and, with it, the potential value of the mobile advertising market," says the report's author, Martin Scott, Analyst at Analysys.

"If they focus on delivering mobile advertisements that are unobtrusive and relevant to the target audience, operators and advertisers may be able to create a mutually beneficial cycle of revenue and rewards," Scott explains. "Virgin Mobile USA, for example, seems to have achieved this with its Sugar Mama advertising campaign."

The motivation for operators to develop mobile advertising has been limited, as voice services have historically yielded the quickest return on network investment. However, in mature markets, core voice revenues are no longer delivering the growth that they once did. Analysys Research forecasts that, in Western Europe, mobile voice revenue will grow at a CAGR of only 2.3% between 2006 and 2012. Mobile operators need new sources of revenue to provide future growth – and mobile advertising could be one such source.

Operators, handset manufacturers and content providers need to grasp both the dynamics of the advertising space and the full potential of the mobile advertising market. According to Scott, "Obstacles to mobile advertising are now beginning to fall, making it more feasible for operators, handset manufacturers and advertising agencies to exploit the revenue potential of mobile advertising."

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Tags: mobile advertising  cagr