Mobile Marketing - All Over the World

By Sieglinde Friedman

Across the globe, it is estimated that mobile marketing will transform the advertising and marketing landscape with similar force as the Internet did some 10 years ago. According to ABI Research, the world market for mobile marketing and advertising is expected to be worth about $3 billion by the end of 2007. By 2011, many changes will occur: (a) the value of this market will reach $19 billion, including mobile search and video advertising--indeed it is expected that some of the highest levels of spending will come in the broadcast mobile video space; (b) it will surpass SMS as a source of mobile marketing spending, due in part to mobile broadcast networks' presence in all major markets; and (c) spending for broadcast mobile video advertising alone will reach $9 billion. But for this market to reach its full potential, carriers, advertisers and marketing companies must utilize multiple technologies to harness power of mobile marketing. The good news is that consumer text messaging continues to grow, according to the latest figures from the Mobile Data Association (UK), which reports 3.2 billion text messages for March 2006. Mobile Internet usage continues to grow, as well, showing some 1.3 billion-page impressions for December 2005.

ADDING THE DR COMPONENT
Many suggest that this year, multichannel incorporation with direct response capabilities of mobile handsets will offer the key to a rich media setup. The success of mobile marketing in Europe is a result of the saturation of the consumer market, which gives mobile marketers a greater reach regardless of the audience segment. According to data from In-Stat, in 2004, there were nearly 740 million mobile users in Asia (including Japan, Australia and New Zealand), with total revenue of roughly US$180 billion. By 2009, Asian mobile telecom revenues will reach over US$260 billion. India will be the fastest growing entity in this region, with a 32.8 percent compound annual growth rate (CAGR) in terms of subscribers, and 31.1 percent by revenue, for the period from 2004 to 2009. Research shows that by the end of 2004, 77 percent of Europeans subscribed to mobile services.

In Germany, France and the UK, branded advertisers (including packaged goods, automotive, fashion, beauty and financial services) have increased their use of mobile content--resulting in an excellent ROI. In Asia, Japan launched a mobile Internet service with mobile e-mail, thus creating a bridge to mobile websites--unlike Europe where messaging is based on SMS. In China, the explosion of mobile technology is a result of the majority of Chinese having no Internet access in their homes.

Mobile Advertising Spending Worldwide, 2006-2011 (in millions)
	2006	2007	2008	2009	2010	2011
General mobile ad spending*	$1,432	$2,496	$4,316	$6,141	$9,006	$11,746
Mobile multimedia ad spending**	$109	$215	$421	$749	$1,295	$2,116
Total	$1,541	$2,710	$4,736	$6,890	$10,300	$13,862
Note: numbers may not add up to total due to rounding; *includes spending on text message promotions and ad-supported voice minutes; **includes spending on ad placements around mobile video content, mobile music, mobile TV and mobile social networks Source: eMarketer, January 2007

CATCHING UP TO EUROPE, ASIA
As noted, mobile marketing in Europe and Asia is far more developed than in the United States. Several obstacles remain in the way: in the U.S., marketers are still in the test phase and are not generally including mobile marketing in their annual budgets. On the consumer side, consumers are reluctant to accept marketing or advertising messages that subsidize mobile content or service experiences. However, Jupiter Research reports that with a 76-percent penetration rate in the U.S., cell phones are nearly everywhere, offering marketers a highly personalized platform for targeting consumers. It is estimated that advertising spending on mobile messaging and display ads will grow from $1.4 billion in 2006 to $2.9 billion in 2011.

As a result, many specialized agencies are developing multimedia messaging service (MMS) and search options. Among the campaigns using MMS marketing, success was marked by a response rate of over 15 percent and a conversion rate of two. According to a number of research sources including ABI Research, global spending on mobile marketing and advertising will see a 13-fold increase between 2006 and 2011. The bulk of that spending will come from SMS-based marketing and in later years, from broadcast television and video services. It is essential for mobile content providers to adopt and utilize the successful, advertising-driven models used on broadcast television and radio. In fact, optimizing direct-to-consumer content via wireless application protocol (WAP) may very likely provide a similar structure to that of Japan's mobile technology. The growth in cross-channel marketing campaigns is making the direct-to-consumer mobile interaction far more valuable for the end user.

Of course, protecting the consumer will be as important as the upsurge of the media. As a result, groups are already forming codes of conduct, which have been divided into six categories: choice, control, customization, consideration, constraint and confidentiality. Nonetheless, surveys of mobile phone users show that consumers view the benefits of mobile marketing as saving money, saving time and providing useful information.

Sieglinde Friedman is ERA's vice president, board & strategy. She can be reached at (703) 908-1021, or via e-mail at sfriedman@retailing.org.