ON ADVERTISING Published: May 4, 2008

PARIS: Seen that great new ad on your mobile phone? No? Neither have we.

Well, maybe, if you are the texting type, you have responded to a marketing promotion that asked you to send an SMS from your cellphone in order to enter a contest or receive information about a product.

Despite several years of escalating hype about the prospects for mobile advertising, the business remains in its infancy. Analysts say current spending totals around $1 billion annually, or around two-tenths of 1 percent of global outlays on advertising.

And it’s debatable whether the activity that accounts for the lion’s share of that spending, text message campaigns, even qualifies as mobile advertising. That is because these campaigns typically employ advertising in other media, like billboards or newspapers, to encourage consumers to respond, rather than beaming ads directly to their phones.

Now that mobile television and other video services are being rolled out widely, advocates of mobile advertising are renewing their pitch - that cellphones could be a highly effective medium, allowing marketers to reach consumers anytime, anywhere, on a device they love. Analysts, meanwhile, have been busy updating forecasts for the growth of mobile advertising.

EMarketer says overall mobile ad spending will rise to more than $19 billion by 2012. The Mobile Marketing Association, a trade group, says it should account for about 5 percent of ad spending worldwide by 2013. Given that the global ad market totals about $500 billion, that means about $25 billion would be allocated to cellphones.

Other forecasters are skeptical that mobile advertising will grow this quickly. Juniper Research said last month that spending would rise to $7.6 billion in 2013 from $1.3 billion this year.

“A certain number of people have been, shall we say, overly sanguine about the prospects for mobile advertising,” said Windsor Holden, principal analyst at Juniper Research. Still, he added that mobile TV would be a big driver of future growth.

Screen Digest, meanwhile, says mobile television alone will account for $2.44 billion in ad spending in 2012, up from a pittance today.

One reason the overall growth of mobile advertising has been slow has been a lack of data on the audiences. Cellular operators in Britain recently took a stop toward addressing that problem, agreeing to release traffic figures for the mobile Internet. Similar tests are under way elsewhere.

Another hurdle, from the standpoint of the consumer product companies that account for a big chunk of global ad spending on traditional television, is a shortage of advertising opportunities on cellphones. Yet wireless operators, media owners and others have been reluctant to make more advertising time and space available until the spending materializes.

“It’s a bit of a chicken and egg problem,” said Julien Theys, an analyst at Screen Digest in London.

In an effort to address that problem and to get more multinational brand owners interested, the Mobile Marketing Association last month released a new set of guidelines for mobile ads. It was the sixth time that the group had updated the guidelines, which advise advertisers, agencies, mobile operators and others about things like ad formats and buying practices, but this was the first time that they were issued globally. Previously, the group had released separate codes for North America, Europe and Asia, reflecting the fragmented development of the market.

“I would say that globally we are now pretty much in synch in terms of mobile advertising investment, creativity and innovation,” said Laura Marriott, president of the Mobile Marketing Association.

Meanwhile, there are signs that the mobile content available to advertisers is diversifying.

The Associated Press, for instance, recently announced plans for a free, ad-supported mobile news service for devices like Apple’s iPhone. Revenue would be split between The AP and newspapers that provide the content.

Mobile television services are also spreading. (See story, this page.) Screen Digest says that by 2012, advertising will account for 20 percent of revenue from mobile TV. But that means operators still will have to rely on subscribers for the bulk of mobile TV revenue, a reversal of the traditional television business model.

Indeed, over the next few years, some analysts say the mobile advertising market will still consist largely of text messaging tactics.

“Text gets you ubiquitous coverage, while video still is spotty,” Marriott said. “It comes down to reach.”

source : IHT

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