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Advertising’s lucrative new frontier

13 февраля 2008

Mobile advertising looks set to be one of the most discussed topics at this week’s Mobile World Congress in Barcelona, but the challenge for the telecoms industry this year will be to prove it is more than just hype.

Advertising on the small but incredibly personal screen of the phone is attractive to a number of parties. For mobile phone operators there is hope of replacing some of the revenues they are losing as the price of voice calls falls.

For companies such as Yahoo and Google, who dominate internet advertising, the mobile market offers a new, much larger market – the eyes of more than 3bn consumers globally, compared to about 1bn on the fixed-line internet.

For advertisers, the response rates for mobile campaigns look promising.

Vodafone, for example, says it gets a 2 per cent click-through rate on banner ads on its mobile internet pages, more than 10 times the response rate to ads on the fixed-line internet.

Rival UK operator 3 claims 8 to 10 per cent click-through in ads on its mobile portal, and Nokia has claimed 20 per cent click-through rates on its sites.

Blyk, an ad-funded mobile phone start-up, says its highly targeted text message campaigns sent to 16 to 24-year-olds in the UK get response rates of 29 per cent on average.

However, analysts advise caution over these early results, saying that high response rates are probably due to the novelty of the medium. A decade ago, when the internet was a nascent medium, click-through rates were similar.

Estimates for how much the market will be worth vary greatly. Analysts at Informa believe the global mobile ad market will grow from just over $1bn in 2007 to $8.4bn in 2012.

Analysts at IDC have a more optimistic forecast of $11bn by 2011.

However, analysts at Jupiter Research take a dim view, saying that the European market – one of the furthest developed – will go from €58m ($84m) in 2007 to €1.3bn in 2012, and account for 1 per cent of total ad spending.

This year, revenues are likely to remain small. “We believe mobile advertising will not deliver meaningful operator revenues in 2008,” said Ben Wood, analyst at CCS Insight, the telecoms consultancy.

There is still much uncertainty around about what works and what does not.

According to research by operator Orange, consumers were most in favour of ads linked to services and content, such as mapping, video and games. Attitudes to banner ads are neutral and the least favourite are unsolicited text messages.

The bulk of mobile advertising is still focused on banner ads and text messages, although companies such as 3 in the UK and Vodafone’s Italian unit are experimenting with offering free video clips supported by ads screened before and after.

Measuring the effectiveness of ads is a key problem, however. Click-through rates on banners and messages can be counted, but there is little agreement on how to calculate the reach of a display or video ad, for example.

According to Jupiter Research, 47 per cent of mobile advertising executives said they had problems with measurement and reporting of campaigns.

The GSM Association, a worldwide industry body, is hoping to ease the measurement issue by pooling data from operators on how many consumers are browsing mobile pages. All five UK mobile operators have agreed to share these data.

It is also uncertain how the market will be organised. Mobile operators, internet companies and equipment makers such as Nokia are all jostling for space.

Yahoo has deals with Vodafone and T-Mobile to sell advertising on their mobile internet pages, Google provides them with search advertising, and Nokia has declared its intention to become a mobile advertising network, having bought Enpocket, a mobile ad specialist, last October.

A host of small start-ups has also emerged, offering advertisers new ways of reaching mobile consumers.

London-based Celltick, for example, recently launched software that can be loaded on to a handset and deliver adverts directly, without having to go through an operator or media agency.

“It’s a little chaotic out there,” said Mike Baker, head of Nokia’s mobile advertising business.

“Media agencies are coming to grips with a profusion of new channels, such as widgets, podcasts and now mobile. It took them 10 years to get up to speed with online advertising, and it could take 10 years to get them used to mobile. They will need a new set of tools and relationships and that is what we hope we can offer.”

Источник: Financial Times

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