Mobile advertising is indisputably a potent way to generate value: Consumers are alerted to offers they want, marketers gain traffic by providing relevant offers, and mobile operators capture more revenue from increased mobile content purchases. But will the model really deliver? Courtney Jane Acuff, an associate director at Denuo, the Publicis Groupe consultancy who has studied the market, has her doubts. In an interview with the Wall Street Journal, she lists the hurdles advertisers must clear before their efforts begin to pay off. (Research firm eMarketer forecasts spending on mobile-phone advertising will grow 58% to about $860 million in 2007.)
The number one obstacle is privacy. Advertisers must be doubly careful their mobile campaigns are not intrusive. And even if they manage this, they face their second biggest challenge: lack of inventory. “Certain content providers are offering inventory, such as ESPN, which has advertising opportunities that can include banners and logos. They offer the ability to sponsor text messages. Fox also has opportunities, and it has taken off a bit, where advertisers can create unique content for the mobile device. But there is still a long way to go to having traditional media embrace putting content on cellphones.” Finally, there is the third barrier which revolves around consumer education – or more specifically – a lack of it.
So, is the dream of mobile advertising a pipe dream? Acuff’s research shows a “willingness to participate by consumers if they feel they can get something out of it.” While users are open to video entertainment on their mobiles, they’re not warming to video ads – yet. “This means that there is a great opportunity to educate clients about how to best think about engaging consumers with mobile video. It is not an immediate proposition but something that we are watching develop with a hopeful eye towards the future.”
“Overall, the outlook for 2007 is upbeat, provided all parties sit at the table and figure out how to move the market forward,” Acuff said. Look for more banner ads on mobile phones (Sprint offers the Sprint mobile media network and, in Europe, Orange has also opened its portal to banner ads). Mobile advertising – based on demographic targeting, behavior targeting, time of day targeting and even zip code targeting – may also become more the norm.