[by Ingrid Lunden] With some 495 million subscribers and counting, China is a booming market for mobile advertising, but the head of one big ad agency working in the country says that it’s also riddled with fraud and speculation.

Feng Guangming, the CEO of Beijing Dianyi Advertising Co Ltd, called the Chinese mobile ad market “far from mature” and says it will take at least two years to see a major upturn, according to an interview in Malaysia’s Star newspaper. Dianyi is a JV between Japanese companies CA Mobile Ltd, Dentsu Inc. and Cyber Communications Inc.

The country has seen a flood of investment and activity in the mobile ad space—with VCs like Sequoia capital investing in WAP, and companies like Monstermob and Pixel Interactive Media moving into the region. (The latter today said it has raised $3.1m in an institutional placing, with the proceeds to be used to invest in developing Pixel’s online advertising and digital marketing products and services, particularly in the Asia Pacific region. The ordinary shares will be traded on the AIM market in London.)

But strong interest from consumers isn’t yet translating into strong returns on investment. Ad agency Madhouse ran a campaign for Hennessy Congnac in Shanghai that took 3.9 page impressions and 120,000 hits, but partner publishers only got paid around 800 yuan ($105) on average for running the campaign, says the article.