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Summary:

With an unstable economy brewing, the wireless industry may be even more reliant upon advertising as consumers cut back on spending and tigh…

With an unstable economy brewing, the wireless industry may be even more reliant upon advertising as consumers cut back on spending and tighten their belts. But the challenge for the industry is to identify ways mobile advertising can work since the sector is still in its infancy. During multiple panels today at Mobile Northwest 2008 in Seattle there was a general consensus that most advertising on the phone is more correctly labeled as “marketing,” and that the bigger opportunity is getting users to take actions like, click to call, or redeeming coupons, rather than solely focusing on ad impressions and click-thru rates.

On the infancy of mobile advertising: Chetan Sharma, president of Chetan Sharma Consulting, said mobile advertising this year will be a $700 to 800 million industry, and today, 20 percent of that goes to carriers. When compared to the other advertising mediums, such as TV, radio and print, mobile makes up a tiny percentage at .4 percent. Even in Japan, which can be considered the most advanced mobile advertising market, it’s about 1 percent. But with the uncertainty in the economy, advertisers will be reducing their budgets in radio and print, and focusing on the Internet and mobile. He said there’s two camps: some advertisers will stick with what they know, but others will make the determination that print and radio won’t work, and although mobile is new and more difficult to understand, they’ll be drawn to it by the promise of better ROIs. Last year mobile advertising revenues doubled, and it probably will again this year, with revenues estimated to hit $1.5 billion in the U.S.

More after the jump

On types of mobile advertising: Sharma said 50 percent of mobile advertising is coming from SMS, which is more like mobile marketing than it is mobile advertising. After SMS, 25 percent comes to display and 10 percent to mobile search. The remainder is going to mobile TV, audio and couponing in US, “and that will stay the same for the next 4 to 5 years.”

On mobile marketing: Ivan Braiker, CEO of HipCricket, which helps radio stations do SMS promotions, said: “We are creating a new revenue channel for the radio stations we work with. Through mobile, we created an additional $1 million in revenue by creating a mobile aspect to the traditional advertising methods. There

  1. I feel like there should be a 3rd camp included in Chetan's paragraph above – the marketers who integrate mobile, namely SMS, as a marketing tool to allow their target audiences to engage with their offline media – but steer clear of mobile as an Ad platform for the moment
    I agree with the statement that mixing SMS with traditional media is marketing and not advertising, I try to get our clients to stop thinking like marketers when it comes to mobile, and slip into their role as a consumer and what it will take to get them to take the next step.
    Engaging via text lets the intended audience take a baby step, to get a little more info while they convince themselves they’re doing the right thing. The response message is another chance to sway and include that extra incentive which rationalizes the next step.
    Accessing the internet on my phone is imperative for some information, however as far as graphics go, compared to my 22” widescreen monitor or modest 42” HDTV, my phone doesn’t really cut it…mobile Ads are still Ads, they’re just tiny.
    Cheers
    Cal
    http://www.interlinkedmedia.com

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