Mobile advertising is catching the attention of the entire global mobile ecosystem, particularly with moves by
Apple and Google, the buzz around the iPad and the exploding use of mobile browsers.
Mobile devices now represent 1.3 percent of all Web page views in North America, and researchers anticipate mobile phones will overtake PCs as the dominant Web access device worldwide by 2013, reports Fierce Wireless. Mobile advertising and marketing also is expected to grow to a $54 billion market in the U.S. by 2014, representing a cumulative annual growth rate of 84 percent over the next four years, accord- ing to a report from Borrell Associates.
Advertisers are salivating at the mobile advertising potential…
Apple and Google have unleashed a frenzy of acquisitions reminiscent of the early days of the Internet. Apple purchased the ad- platform company, Quattro Wireless, for $360 million and the mobile app search company, Siri. Google is acquiring AdMob for $750 million and introducing online product reviews and brand recommendations.
Apple’s iAd mobile advertising platform has tremendous revenue opportunities with developer revenues projected to reach $825 million this year, and with developers reportedly pocketing 60 percent and Apple keeping the remaining 40 percent of all iAd revenues. Estimates say iPhone developers presently generate up to $1.8 billion in annual App Store sales. iAd revenues would generate an annual increase between 40 percent and 80 percent. Apple anticipates that it will collect $550 million from apps and $265 million from media providers like publishers and television networks.
The Wall Street Journal (WSJ ) reports that Apple is planning to charge nearly $1 million for mobile ads in iPhone applications when iAd launches this summer. WSJ reports Apple could charge marketers as much as $10 million for inclusion in the first wave of iAd promotions when the service goes live on iPhone and iPod Touch devices. By comparison, ad execs say they typically pay between $100,000 and $200,000 for similar mobile deals.
Not to be outdone, Google expects to release details about its own platform shortly. Reportedly Google generates $9.40 per month per unique user in revenue from advertising to Internet users. Multiply that by 280 million U.S. wireless subscribers and the potential for the mobile advertising market is more than $2.5 billion per month or more than $30 billion per year in the U.S. alone.
Where Are We?
Advertisers are salivating at the mobile advertising potential to create connections between consumers and sellers, particularly now that these heavyweight technology leaders are investing in platforms to expand into hosting and selling mobile ads.
Mobile advertising offers brands and retailers a goldmine for instantaneous gratification, and many are considering how to optimize revenues across the cloud and devices. In a universe where the consumer is physically within a retailer’s grasp based on geo data and can integrate location and immediacy, consider the potential revenue from impulse purchases based on location- based advertising and couponing. It’s not lost on BestBuy.com and PayPal who presented at the annual GSI Commerce Executive Summit, where key themes centered on local and mobile for digital marketing.
Content companies also are exploring new business models. Is it subscription- based, a-la-carte pricing or about deliver- ing free and ad-supported content, like the analog TV model?
Recently, Comcast demoed new soft- ware, Xfinity Remote, to turn Apple’s iPad into a remote control and allow cable TV subscribers to change the channel and search for programming and on-demand content. The application also features con- tent discovery, chat and recommendation features and likely new opportunities for advertising.
Metrics also play a key role in establishing value and pricing models. The Audit Bureau of Circulations’ (ABC), interactive unit began to measure the growing number of readers who interact with newspaper content via mobile devices, including e-readers, mobile Web-browsers and free and paid apps on smart phones and the iPad. This mobile measurement initiative is being undertaken with Verve Wireless, and initial audits will include about 600 newspapers in North America and Europe that use Verve’s publishing platform.
As consumer confidence in mobile security builds, devices are being used increasingly for transactions. More than 850 million mobile payment transactions were made by 2009, and by 2020 roughly 10 billion mobile devices will be in use, more than 1.5 times the population of the planet, says the market research firm, Informa. Trans- action processors like Visa and MasterCard are looking at migrating consumers from a plastic card to an electronic wallet.
MiTek Systems has partnered with J&B Software and Conestoga Bank on a system that allows Conestoga’s customers to deposit checks from their camera-equipped smart- phones using J&B’s mobile software and MiTek’s Mobile Deposit® feature.
Look around as you travel. Many people have some smart mobile device—iPhones, Kindles, laptops, BlackBerries and iPads. Advertisers know that it’s the one device that is always with consumers. We are a mobile society, and the potential for advertisers and marketers is enormous.
E-mail comments to: . susan@c4trends.com