June 29, 2009

Mobile Advertising To Grow In The Next Few Years

New applications and the growing popularity of social networks like Facebook will boost advertising on mobile phones in the next two to three years, according to what executives have told Reuters.

According to Ineum Consulting, the more consumers embrace smartphone technologies, such as Apple's iPhone, the more mobile advertising will grow.  They have seen advertising grow 45 percent in that field, which projects the market to reach an annual average of $28.8 billion within 5 years.  Currently the earnings are at $3.1 billion annually.

"We have launched many mobile campaigns for the first time in the last three months. New people are coming in every week," said David Kenny, Managing Partner at VivaKi, the digital arm of French advertising group Publicis.

He said that applications for the iPhone, like Facebook's social networking app, would be the key drivers for advertisements because of their increasing mobility.

Havas Worldwide and Euro RSCG Worldwide's global chief executive, David Jones, said that advertisers would need to be better at creativity to be able to fully benefit the opportunities that will come from mobiles.

"If you are interrupted every two minutes by advertising, not many people want that. The industry needs to work out smart and clever ways to engage people on mobiles," he said.

Scott Howe, Microsoft's corporate vice president of the advertiser and publisher solutions group, says that he thinks smartphone advertisements will account for 5-10 percent of global media ad spending within five years.

He added that mobile advertising would most likely attract interest from a niche of advertisers from local retailers that have yet to embrace the mainstream online advertising.

These advertisers might be able to shift their ad budgets away from local newspapers to mobiles for a better-targeted campaign, according to Reuters.

He also said that emerging markets like Latin America and Africa were promising because of their use of mobile devices over a computer.

Although advertising campaigns have become more global, there is still a hurdle to overcome with the lack of compatibility between 3G networks in Europe and Asia.

"We have to have a common system and the technology has to have enough bandwidth for delivering the message," said Martin Sorrell, the chief executive of WPP, the world's largest advertising group by revenue.

The Long Term Evolution standard might be the solution if it is adopted for the new 4G high-speed mobile technology.  However, 4G is not expected to be widely available until the middle of the next decade.