Mobile phones have become as indispensable as wallets and doorkeys. Most people won�t leave home without them, and if they do, they will more than likely go back to pick them up. So why is mobile advertising�sending promotions and targeted adverts to people via their handsets�not yet perceived as big business by advertising agencies in Europe?
The revenue for mobile advertising is set ot rocket to $11.5 billion in the next 5 years according to Informa, the research company.
The mobile marketing and advertising sector in the UK is currently dominated by smaller digital agencies rather than the big ad agencies.
So far mobile is being investigated, but not invested in, by the above-the-line agencies.
Many agencies are not famed for their forward-thinking, especially when it comes to technology. But there is another reason for reticence on the part of the above-the-line advertising agencies. Penetration of mobile in the UK may be high, but it�s still very early days when it comes to mobile multimedia use.
This is a combination of slow and poor technology combined with the data costs for mobile users.
�The big steps that need to be in place for any brand to seriously consider a new channel is to be able to reach as broad an audience as possible and to do so in a compelling way and to have the ability to measure its effectiveness,� he says. �Those aspects have not been in place in mobile.�
Indeed, even a basic issue like the cost to produce a mobile advert yields wildly different estimates, ranging from �100 to start a trial to �13,000 for a full-blown campaign.
On the plus side, there are signs that the building blocks are being put in place. For starters, mobile advertising platform vendors like Bango are bringing out new products to measure the response to mobile adverts. Systems such as immedia24 also hope to tap into that market.
There were reports that mobile operators, including Telefonica�s O2 and Vodafone, were in discussions to create a common search platform that could work across multiple mobile Internet portals. Their thinking is that a single platform would help ease the burden of larger companies investing in this still-emerging space. The operators are reportedly debating whether to create their own platform or to buy one in from an established search portal, such as Yahoo! or Google, which want to mark out their own advertising territory on the mobile Internet.
Some major brands have already seen early mobile advertising success. Last November, Coca Cola launched its newest campaign, The Happiness Factory, on mobile before doing so on traditional media. Over the Christmas period, the drinks giant reported 579,000 page impressions for a mobile campaign it ran with operator 3, with a conversion rate of 9.5% for click-throughs on the advert.
Typical conversion rates for mobile adverts are between 1.5% and 6% - �Coca Cola now considers mobile media just like any other media in the mix,� an agency insider said.
�You can see agencies wanting to get involved and move into the space, which is being driven by the tightening of ad budgets across the board�. �In the last year, we�re seeing a lot more budget coming into digital.�
Countries in Asia have stolen a march on mobile advertising, by far. In fact, in Japan advertising has become the primary way that mobile content companies make their revenue. Anderson at Bango believes the US, too, has huge potential.
Back in Europe, the market could be at a tipping point this year. If increasingly sophisticated devices and high penetration can be accompanied by new mobile advertising initiatives, from operators and Internet portals, it could be the opening that agencies and their large media clients have been waiting for.
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