Communications and Technology Industry Research

Though mobile is an appealing advertising platform and the most direct channel to reach customers, experts say for mobile advertising to take-off it needs to overcome the annoyance factor and find its niche.

 

New analysis from Frost & Sullivan (News - Alert), “Sizing-up the Mobile Advertising Opportunity in Asia-Pacific,” finds that mobile advertising across 13 Asia-Pac countries raked-in revenues of $807.8 million in 2007 and expects this to reach more than $4 billion by end-2012, at an annual growth rate of 37.8 percent.

 

Jeff Teh, Frost & Sullivan analyst, believes that mobile has huge potential as a highly-targeted and engaging advertising medium. “Unlike traditional media which mainly delivers content, mobile advertising has the ability to also deliver services and personalized content to consumers,” he says.

 

Although mobile advertising is expected to account for only 5.8 percent of the total Asia-Pac mobile data revenues by 2012, it will account for nearly 3 percent of the total advertising expenditure in the region. A key driver of mobile advertising is the evolution of the mobile phone into something inseparable from the owners, Teh says.

 

The struggle, he says, is establishing a profitable value chain for all players within the mobile ecosystem, including operators, ad agencies, content providers, technology or solutions vendors, and even subscribers. A further challenge is that mobile ads need to deliver value and be presented in an unobtrusive manner.

 

“As mobile users pay for services, they are unlikely to be receptive to ads and promotions unless there is a perceived value from receiving such ads,” The notes. “Currently however, there remains very little free content available over mobile unlike over the Internet or in broadcast.”

 

The sell-through rates for mobile advertising, even for available inventory such as news feeds, weather and sports content, are relatively low in Asia-Pacific at under 15 percent, compared to between 20 and 30 percent in regions such as the U.S.

 

Hence, advertisers and media agencies are still evaluating how the new digital and interactive channels that online Internet offers can fit into their ad campaigns and media mix, beyond just simple SMS-based campaigns.

 

Teh believes that the ad-funded model – where subscribers are able to download or access content for free in exchange for receiving selected ads – is likely to prove effective. Incentive-based ads such as offering cash, free minutes and downloads, and discount coupons are also an attractive way of pushing content.

 

“Mobile operators’ portals remain a significant part of the first point of entry to the mobile Internet and a source of content for most subscribers in Asia-Pac. Operators are in a unique position to exploit subscriber data to ensure that only relevant content reaches subscribers, as well as enable easy single-access for advertisers, publishers and content providers,” Teh says.

 

For more information about Frost & Sullivan’s Growth Partnerships, visit http://www.frost.com