Mobile Ads Growing, Consumers Respond
Mobile advertising - everyone has been talking about but most experts don't expect it to take off for a while yet (or, in other words, "overhyped near term and underestimated long term.") According to this WSJ article, the audience is minuscule and advertisers have yet to commit significant budgets to it. The reasons for this situation:
- Mobile advertising results are difficult to measure (no universal standards specifically for mobile)
- Consumers resist commercial messages on their cell phones
- Few phones can display video advertising to its best advantage
- The cost of downloading video and other data to mobile devices is still "prohibitively high"
- "Confusing abundance" of formats (text ads, banner ads, game ads, video ads, search ads, etc.)
- "Privacy concerns limit the amount of customer information carriers can share with marketers"
- Restricted ability to "extract key demographic and usage information"
- The evolving nature of the mobile experience (mobile carriers "portals", traditional Web search, etc.)
While some commercial offerings have been introduced (the WSJ article mentions Amobee Media Systems, Nokia several large ad agencies and, of course, Google) and big advertisers expressed interest (for example, Coca Cola), mobile advertising revenues have yet to reach the $1 billion mark. Revenue estimates for 2011 hover around the $10-15 billion mark.
For now it seems that "advertisers can count on better response rates from the cellphone companies' portals than they can get from the search companies' mobile offerings," but that is expected to change over time as more callers discover the mobile Web (16% of US callers today, 40% by 2012). Two immediate motivators for mobile advertising - the industry's youthful demographics and the fact that click through rates are quite high (2-3% per ad compared to 0.1-0/2% on the Web, in certain cases even 15% and 40%!)
One example, recently discussed in RetaiWire, is Wal-Mart's test of sending text-based mobile advertising to hundreds of thousands of consumers. Their results - 10% agreed to participate and their lesson - limit the number of messages (three max) but its OK if they're sent together.
Another example, covered by BusinessWeek, is Tesco Mobile whose WAP advertising portal saw CTRs of 3-7% for brand ads. 60% of their users are female and 69% claimed they would click on a relevant ad.Meanwhile, a couple of research reports were released on the subject. Starcom USA's study (covered in MediaPost and MediaWeek) showed that while the people they surveyed (consumers from urban regions who identify themselves as mobile media users) are "not averse to advertising on mobile devices, they do object to the lack of relevant ads." In return for personal information, users expect personalized content in mobile ads. Additional findings - 90% of those surveyed were pleased with their mobile service and a majority described their phone as "indispensable'" and mobile Internet was ranked as the number-one mobile feature they would miss (18%), more than voice communication (17%), text (16%) and email (13%).
Nielsen's report (covered by Reuters, eMarketer, Promo and MediaPost) showed that:
- 23% of U.S. mobile phone users have seen advertising on
their cell phones in the last 30 days and about half of them responded
to the ads.
- The number of phone users who recalled seeing mobile ads rose by 38% to 58 million in the fourth quarter.
- Almost a third of those who use data services such as text messaging or Web surfing are open to advertising if it lowers the overall bill.
- 13% said they were open to ads if they improves the mobile content available, while about 14% said they were open to ads as long as they were relevant to their interests.
- Teenagers aged 13 to 17 were the most likely to recall seeing an ad, and that Asian-Americans and African-Americans were more likely to recall seeing ads than other data users.
Posted by Universal Ad
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