Mobile Advertising Takes Off with Tier-1 Operators Adopting the Service

Published on: 15th September 2008

The ubiquity of mobile services and increasing uptake of various mobile data services and applications have provided mobile operators with new channels of communication and always-on connectivity to their target audience. With a mobile penetration rate of nearly 85 percent, the U.S. mobile operators have a customer base of almost 250 million waiting to be tapped for mobile advertising revenues.

New analysis from Frost & Sullivan finds that the market revenues are expected to reach $1,893.5 million in 2012.

Mobile operators are developing ambitious new campaigns for both on-deck and off-deck advertising, as they are rapidly realizing the services' ability to subsidize the cost of content production and lower the cost of service usage. Industry participants are closely observing the run of play within the in-application mobile advertising in the off-deck model.

Adoption by market majors will go a long way in further enhancing the use of mobile advertising across on-deck and off-deck environments.

"Adoption of mobile advertising by the nation's largest mobile operators and innovative mobile virtual network operators (MVNOs) is a testament to the perceived potential of the market," says Frost & Sullivan Industry Analyst Vikrant Gandhi. "Mobile advertising efficiently serves the expectations of advertisers, mobile operators, and even subscribers when offered in a highly targeted, non-intrusive manner."

Mobile operators should be prudent while sharing the personal information of their subscribers to ensure that their subscribers do not suffer overzealous marketing efforts. Although advertisers will want to delineate their target audience by demographics, location, handset, and other parameters, mobile operators should be cautious while providing information to preserve their subscribers' privacy.

Mobile advertisements are mainly broadcast through messaging, wireless application protocol (WAP), mobile video, in-application, and performance-based advertising within search, WAP, and other environments. Each of these channels is suited to a particular situation and type of subscriber, since ad types, pricing models, ad sourcing approaches, and distribution vary among channels.

The channel assumes great importance when it comes to mobile advertising because mobile phones are inherently personal devices and unlike the PC, only one person is likely to access the device and the content delivered to it. This single-user benefit increases the efficiency of advertising campaigns.

Ideally, mobile advertisers would like their messages to appear as informational content and present an immersive experience. They can offer ads that fulfill users' informational and entertainment needs by delivering relevant messages within the applications and services used by subscribers and tracking their usage history, preferences, location, and device types.

Once subscribers are more accepting of mobile advertising, advertisers could resort to communication services such as peer-to-peer messaging.

"Around 15 percent of U.S. mobile subscribers use mobile Internet regularly to access information through their mobile devices, thus, opening up new avenues for advertising," observes Gandhi. "Mobile operators are also reporting considerable uptake in the usage of mobile video services that can include advertising messages."

 

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