Mobile Ad Biz Comes of Age

Broadcast mobile video is likely to be a huge source of spending by 2011. Carriers and advertisers have to bring their message to the public

The world market for mobile marketing and 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 marketing spending, due in part to mobile broadcast networks' presence in all major markets.

But for this market to reach its full potential, the New York-based research firm said carriers, advertisers, and marketing companies must utilize multiple technologies and business models to bring their messages to mobile consumers.

"Mobile advertising and marketing is a risky, albeit enticing business," said Judith Rosall, principal analyst at ABI Research. "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 marketing and advertising is also at varying levels of maturity, depending on the market or country, according to Rosall. In Europe and Asia, mobile marketing is fairly well developed. However, early-adopting brands in the US are still in the process of testing the water. They don't typically allocate a set percentage of their annual budgets to mobile, the report emphasized.

In turn, major ad agencies are still relatively inexperienced with mobile marketing campaigns, and reluctant to utilize location-based services 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, the report said.