Advertising is about to catch up with mobile customers. The reason is simple: Carriers need the revenues.
As mobile operators merge, produce less-expensive phones, build faster networks and, due to competition, charge less for voice service, the pressure on their bottom lines increases. They have to begin exploring new ways to generate revenue, and advertising-subsidized content is hard to overlook.
Informa estimates that worldwide advertising spending on mobile devices will rise from less than a billion this year to $11.35 billion in 2011.
Informa is also forecasting that there will be over 2.1 billion mobile subscribers worldwide by the end of 2006, rising to nearly four billion in 2011.
That represents a sharply higher growth rate than an earlier estimate this summer from PricewaterhouseCoopers and Wilkofsky Gruen Associates, which estimated over two billion mobile phone users in 2006, close to the Informa number, but only 2.8 billion by 2010.
Either way, there are a number of issues that must be addressed before advertisers can effectively grow the mobile channel, including technology (eg, screen size, available bandwidth, interoperability between operators and handsets) and industry regulation.
"Mobile advertising is not new, it’s been around in some form since 2001," said Nicky Walton of Informa. "But in the last 18 months there have been a number of developments that are encouraging interest in the medium. There are now more users with advanced multimedia handsets, consumer interest in multimedia mobile content is growing, and mobile TV and ‘off-portal’ search are becoming more popular."
Still, findings from an industry survey conducted as part of the research for the Informa report point to the fact that consumers are currently "not at all willing" to receive mobile advertising via SMS/MMS. And that is a problem.