Introduction to the Mobile Advertising Industry

Jim Cook Editor

Topics for today

How big is this market? What are the ad formats? Who is the audience, and What are they watching? Who is in the Value Chain? What can we expect in the coming year?

How big is this market?

The most widely quoted market projection seems to be from eMarketer, which forecasts global mobile advertising spending to be almost $14 billion in 2011 This is spread across a number of formats:
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2006 2011 Content/Sponsors Browsing Mobile TV Messaging

Global Mobile Advertising Revenue Forecast by Format

Source: CapGemini

How big is this market?

In the UK, mobile advertising spend is projected to be 187m by 2011.

Source: Strategy Analytics

How big is this market?

Look at it from the perspective of brand budgets:
70% 60% 50% 40% 32% 30% 20% 10% 0% 2007 2009 2012 58%

14%

What percentage of your marketing communications budget do you plan to spend on mobile marketing in 1, 2 and 5 years time? Percent of brands spending 6% to 15% of their budget
A survey of 50 global brands by AirWide Solutions
Source: AirWide Solutions

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen!
Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Call screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Dial screen ads Company WAP sites Messaging Ads
Recently launched Disney site in US Eventual further Integration with Disney.com and Disney virtual worlds

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Dial screen ads Company WAP sites Messaging Ads

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Dial screen ads Company WAP sites Messaging Ads SMS Ad Tags

Mobile Advertising Encompasses a Wide Variety of Formats

It is more than internet advertising on a small screen! Display Ads Search In-game Ads Text to win SMS Coupons Proximity Marketing Idle screen Dial screen ads Company WAP sites Messaging Ads LOreal Ad Dialogue

Who is the mobile audience, and What are they watching?

Mobile has its own characteristics, it is different from other advertising media. Wide perception that mobile is only for 1 to 24 year olds

Downloaders and Browsers in UK

Indicative of mobile internet usage Mobile is not only about the youth market - very healthy segments above 25 year old Under 24 years old account for 30% of mobile content consumers, while only 20% of mobile subscribers.

3 month average ending Aug 2007

Data source:

Mobile marketing is reaching the masses

80% 70% 60% 50% 40% 30% 20% 10% 0% FR DE IT ES UK US
Respondents expressed as a % of those who have received an SMS ad 3 month average ending Aug 2007

% of all Mobile Subs receiving an SMS advert % of Recipients of SMS adverts responding

Data source:

What are they watching?

Top 10 Smartphone Web Sites
Top 10 for unique subscribers, UK Company 1 2 3 4 5 6 7 8 9 10 Google Inc. British Broadcasting Corporation (BBC) Orange Personal Communications Svc Ltd Microsoft Corporation Vodafone Group PLC eBay Inc. Telefnica O2 Europe plc Hutchison Whampoa Limited Yahoo! Inc. Deutsche Telekom AG 1 2 3 4 5 6 7 8 9 10 Top 10 for page views, UK Company Hutchison Whampoa Limited Google Inc. British Broadcasting Corporation (BBC) Yahoo! Inc. Microsoft Corporation Vodafone Group PLC Orange Personal Communications Svc Ltd eBay Inc. Deutsche Telekom AG TheFacebook, Inc

Data from M:Metrics on-device meter, tracking an opt-in panel of Smartphone owners, June07

Data source:

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Interested in Mobile Not yet putting major budgets behind mobile Dont really understand mobile in depth Not getting enough info from their agencies

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Interested in Mobile Starting to dedicate full time people, but not always enough business to justify it Most do not have in depth understanding of mobile Need more data to effectively plan for mobile in overall context

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Rapidly growing Usually part of some other organization Industry consolidation taking place Local and International

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Many players Internet incumbents are entering Consolidation is happening Examples of Ad Servers include: Nokia Ad Business, ScreenTonic (Msft), Amobee, Third Screen, AdMob, Rhythm NewMedia

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Many are actively building highvalue inventory Ad-funded content & services are growing rapidly Starting to see some sold out periods No common measurement or planning info from publishers

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator
Some are actively engaged, some are fast followers Need to develop cross operator inventory They have the data, but not clear if they can make it into useable information any time soon

Mobile Advertising Value Chain

Advertisers Agencies Ad Network Ad Serving Mobile Publisher Mobile Operator

What do consumers think?

What do consumers think?

Studies show most consumers are OK with ads
IF the ads are relevant IF they get something of value in return IF they can control the ads

Studies are now coming out that demonstrate the effectiveness of mobile advertising, both for transactions and branding.
3UK video service Male Grooming Brand, Aerodeon Weather Channel Interactive More on the MobiAD site

Key trends for the next year

Consolidation

Targeting

Cooperation

Brand Participation

Key trends for the next year

Industry consolidation has started
Consolidation

Targeting

Nokia buys Enpocket Microsoft buys ScreenTonic Publicis buys Phonevalley Yahoo buys Actionality AOL buys Third Screen Media plus many others

Cooperation

And it will continue over the coming year

Brand Participation

Key trends for the next year

Consolidation

Ad targeting and profiling should become more of a reality

Search companies will make progress Social Networks will make progress Operators will keep trying, but its difficult for them.

Targeting

Cooperation

Brand Participation

Key trends for the next year

Consolidation

We will see increased level of cooperation among the various mobile advertising players, for example
Standards for ad formats Reporting of audience metrics Operators working for cross operator inventory Industry groups setup and working together (IAB, MMA, MEF, GSMA)

Targeting

Cooperation

Brand Participation

These are critical for developing the reach of mobile advertising and making it easier to implement.

Key trends for the next year

Consolidation

Targeting

Cooperation

Brand Participation

Thank you very much Enjoy the day

Most of the information for this presentation is on www.mobiadnews.com Subscription is free. jimcook@mobiadnews.com