Mobile Advertising in a Down Economy

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mobilemarketing3.jpgADOTAS EXCLUSIVE — Advertising and marketing executives in companies of all types and sizes all over the world are reconfiguring their advertising spending in order to accommodate tighter budgets, smaller margins for error, and less room for experimentation.

All forms of advertising are likely to see a decrease in spending. But there is a bright spot in the midst of all the doom and gloom: mobile advertising.

Mobile advertising, at this point in its development, is one of the few areas of the global technology sector that may just be largely recession-proof. Just think of how important mobile phones have become to a broad range of people—from those of moderate means to the wealthy. According to the Mobile Marketing Association (MMA), there are now 267 million mobile phone users in the U.S.—up from 251 million at the end of Q4 of 2007. This means that more people in the U.S. (and around the globe, in fact) have a mobile phone than an Internet-connected PC. And think about how many people are giving up their land lines as their primary phone—a phenomenon that has become so common that a major U.S. mobile operator has made ditching the landline an advertising slogan. Mobile technology is truly changing the communications paradigm—and an economic downturn is not going to stop its evolution.

Not only are mobile phones and devices quickly becoming a necessary tool for consumers and professionals alike, but users are realizing that mobile devices can actually save them both time and money. For example, a recent report from comScore suggests that smartphone users are finding that they can save money by taking advantage of the utility of the mobile Internet. It should be noted that a smartphone isn’t necessary to access the mobile Internet, and as more people realize what even more basic phones can do, the more we’ll see use of the mobile Internet grow.

But back to the numbers—besides the steady growth in handset sales and new subscribers, growth in data (mobile Internet and text messaging) has been explosive and there are no signs of a slowdown. For example, ABI Research recently released the findings of a report that found that the global economic downturn is not effecting the growth of mobile messaging (text and multimedia). In fact, the firm predicts that worldwide mobile messaging service revenues will grow from $151 billion in 2008 to more than $212 billion by 2013. Additionally, Nielsen’s latest measure of mobile Internet usage shows an ongoing and steady rise, recording more than 100 million unique mobile subscribers and $1.8 billion in revenues for the second quarter of 2008.

The most impressive numbers in terms of growth, however, are in mobile advertising. As the head of a company that runs a mobile advertising network on a global scale, I’ve witnessed this firsthand. Here at BuzzCity, we’ve seen a 97 percent increase in mobile ad impressions in the U.S. alone between Q1 and Q3 this year. And we don’t see any significant slowdown on the horizon. Numbers from other sources also support this strong outlook for mobile advertising. The MMA report I cited earlier found that mobile ad awareness—a key metric for effective and targeted advertising—increased 56 percent during the first nine months of 2008 in the U.S. Nearly four out of 10 American mobile phone users (totaling roughly 104 million U.S. consumers in all) recalled seeing mobile ads between July and September of this year, the study found.

In addition, major advertisers see real promise in the medium, again despite the sour economic outlook. A recent Internet Advertising Bureau survey found that 62 percent of agencies, media planners and advertisers believe mobile ad spending will continue to grow and emerge in marketing budgets. These executives realize that, with the exception of the direct sale, mobile advertising may be the most targeted advertising medium ever devised. Mobile phone users are active Internet surfers and motivated buyers, more so than any other medium. In addition, mobile advertising allows companies to measure effectiveness in unprecedented ways through metrics that speak directly to the motivations and buying habits of customers. And, mobile advertising opens up possibilities for new and even more targeted technologies like location-based marketing.

While some may continue to be skeptical about such a new and innovative advertising medium, the evidence continues to mount for the emergence of mobile advertising as a highly effective way to reach customers. And as awareness continues to grow, there will be more segmentation—both by vertical and by specific technology (i.e.—location-based, mobile couponing, etc.) that will allow marketers to target potential customers with even more specificity. For now, the continued steady adoption of mobile phones, growth of the mobile Internet, and steadily increasing awareness of mobile advertising will shield the industry from most of the pain of the economic downturn. However, what really makes the mobile advertising business largely recession proof is the increasing importance of mobile devices and data services to consumers’ daily lives. Mobile is, in many ways, becoming indispensible—in good times and bad.

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3 COMMENTS

  1. It makes sense that Mobile Advertising will be strong during a downturn in the economy.

    Mobile is an emerging channel and Mobile advertising is quite cost effective compared to other avenues of advertising.

    It is the reason that Bluebook Advertising has partnered with an innovative tecnology company in this Mobile Marketing Space.

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