Mobile Advertising and Marketing: Industry Report

Mobile Advertising and Marketing

Product Type: Market Research Report
Published by: Berg Insight
Published: October 2007
Product Code: R601-33

Description

Over time marketing and advertisement activities transform as new digital media streams emerge. The first major digital transition took place when advertisement extended from broadcast media such as television and cinema, also called the first screen, to the PC Internet, referred to as the second screen. In the last couple of years we have seen an expanding transition into the third screen represented by the mobile handset. What distinguishes this new channel from digital predecessors is the ability to influence consumers at the very moment they are ready to take action, thus closing in on the last mile of transaction.

Brands and marketing agencies play a key role in the nascent mobile marketing ecosystem. Their decisions on the distribution of advertisement spending ultimately decide the total monetary value of mobile marketing. Global advertisement expenditure in 2006 was approximately € 303 billion (US$ 435 billion) and global Internet advertisement expenditure reached € 18 billion in 2006. The year-on-year growth rate was reported to be 26 percent in H1-2007. Online media consumptions today accounts for 21 percent of overall media consumption, hence it is not difficult to realize why Internet advertisement is the fastest growing advertisement media.

In the last 12 months there has been an increase in the momentum around mobile advertisement. As the market is starting to move mobile operators are now partnering with mobile advertisement and content stakeholders to build competitive new business models. An important note is also that free content has never wiped out paid-for content in any other media channel and the most probable scenario will probably be a mixture of the two business models in the mobile channel.

SMS is currently the most widely used messaging vehicle for mobile marketing. Overall the worldwide SMS traffic increased with approximately 50 percent to more than 620 billion messages in the first quarter of 2007. However, only a small fraction of messages consists of commercial messaging. Another emerging marketing channel within mobile is the mobile Internet. Historically advertisement has played a critical role in driving the mainstream adoption of PC based Internet services. The service areas that are beginning to take off on the mobile Internet are very similar to the online world and consist of search, communities and web mail services. In addition, more and more mobile operators all over the world have in the past several years introduced location-based services in their service portfolio. Berg Insight believes that the ability to target consumers based on their position will have a significant effect on the way that companies advertise, not just in the mobile medium but it will also impact on their entire advertising strategies and channels. The technologies are already here to enable the offering of such services.

The shift of advertisement expenditure into new digital channels is a very complex process where traditional thinking clash with new, innovative and unexplored advertisement and marketing territory. The mobile marketing ecosystem is very multifarious and far from being mature. Since the mobile advertisement channel is still fairly new there are a number of new ventures entering the market space. The supply side is consolidating with major corporations positioning themselves to take substantial market shares on this emerging marketplace. Still there are formidable barriers - primarily the lack of popular mobile media channels - that threaten to divert marketing expenditure to substitute digital channels.

Berg Insight estimates that mobile channels will account for 0.8 percent of the total digital advertising expenditure worldwide in 2007. By 2012 the share for mobile media is expected to have reached 7.5 percent, while at the same time the digital advertising market more than doubles in size. In monetary terms, the value of all mobile channels combined is forecasted to grow with a compound annual growth rate of 79.8 percent from € 192 million in 2007 to €3,606 million by 2012.

Table of Contents

List of Figures: Summary; Executive summary
1 Advertising and digital media: 1.1 The marketing and advertisement industry; 1.2 Internet advertisement; 1.3 Mobile marketing and advertising
2 Key industry players: 2.1 Marketing industry players; 2.2 Internet industry players; 2.3 Mobile marketing aggregators and platform providers
3 Messaging and mobile marketing: 3.1 Push messaging; 3.2 Pull messaging; 3.3 Interaction and deployment of mobile messaging campaigns; 3.4 Case studies
4 Mobile web advertising: 4.1 Mobile Internet versus PC Internet; 4.2 Mobile browsing; 4.3 Mobile Web 2.0 applications; 4.4 Advertising on the mobile web; 4.5 Case studies
5 Location based services and mobile marketing: 5.1 Introduction to mobile location-based services; 5.2 Location-based advertising; 5.3 Location-based advertising and marketing solution providers
6 Ad-funded mobile services: 6.1 Ad-funded mobile TV; 6.2 Ad-funded mobile content; 6.3 Blyk - an ad-funded MVNO
7 Industry analysis and conclusions: 7.1 Mobile marketing industry analysis; 7.2 Potential market value analysis; 7.3 Market growth forecast; 7.4 Final conclusions
Glossary
List of Figures: Figure 1.1: Total advertisement expenditure (Worldwide 2006); Figure 1.2: Global advertisement expenditure by medium (Worldwide 2006); Figure 1.3: Top advertisers (US 2006); Figure 1.4: Internet advertisement expenditure by region (Worldwide 2006); Figure 1.5: Online advertisement spending by format (Worldwide 2006); Figure 1.6: Top 20 US web sites (August 2007); Figure 1.7: Mobile marketing ecosystem; Figure 2.1: Top 10 marketing groups in Europe and North America (2006); Figure 2.2: AdMob targeting statistics (March 2007); Figure 3.1: Comparison of bulk messaging methods; Figure 3.2: US Short code execution process; Figure 3.3: Mobile messaging advertising response types; Figure 4.1: Top off-deck mobile websites (US and UK January 2007); Figure 4.2: Top web mail providers, by active accounts (February 2007); Figure 4.3: Community sites, by unique monthly visitors (August 2007); Figure 4.4: Most popular mobile Internet site categories by country; Figure 4.5: Mobile advertisement cost CPM; Figure 4.6: MMA recommendations for mobile web banners; Figure 5.1: Generic LBS value chain; Figure 5.2: Performance of various handset position determining technologies; Figure 5.3: GPS enabled handset shipments (Worldwide 2006-2010); Figure 7.1: Digital advertising expenditure trends (Worldwide 2005-2008); Figure 7.2: Acquisitions of mobile and digital marketing companies (Q1-Q3 2007); Figure 7.3: Digital advertising revenues forecast by region (Worldwide 2007-2012); Figure 7.4: Share of subscribers accessing mobile media; Figure 7.5: Comparison of CPM levels by media; Figure 7.6: Mobile advertising revenue sensitivity analysis (€ million); Figure 7.7: Mobile advertising revenues forecast by region (Worldwide 2007-2012)

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