Smart Phones, Social Networks to Boost Mobile Advertising

Advertising on mobile phones should really take off within two to three years, driven by new applications on smart phones and the growing popularity of social networks such as Facebook.

Executives, who attended last week’s Cannes Lions 2009 ad festival, told Reuters that emerging economies were also promising though the lack of a global mobile phone standard could be a brake to speedy development.

As more consumers embrace new technologies and devices such as smart phones, personified by Apple’s iPhone, mobile advertising is seen growing at an annual average of 45 percent to reach $28.8 billion within 5 years from a current $3.1 billion, according to Ineum Consulting. “We have launched many mobile campaigns for the first time in the last three months. New people are coming in every week,” said David Kenny, Managing Partner at VivaKi, the digital arm of French advertising group Publicis. Social networks such as Facebook, which were becoming “increasingly mobile”, and applications for the iPhone would be key drivers, he said.

David Jones, global chief executive of Havas Worldwide and Euro RSCG Worldwide, said that advertisers needed to be more creative to fully benefit from opportunities offered by mobiles “If you are interrupted every two minutes by advertising, not many people want that. The industry needs to work out smart and clever ways to engage people on mobiles,” he said. Scott Howe, corporate vice president of the advertiser and publisher solutions group at Microsoft, predicted that mobile phone advertising will account for 5-10 percent of global media ad spending within five years. Mobile advertising was likely to attract interest from a niche of advertisers, such as small “mom and pop” local retailers which did not routinely embrace the mainstream online advertising, he said. These advertisers could shift their ad budgets away from local newspapers to mobiles for local highly-targeted campaigns. Emerging markets such as Latin America or Africa where “people probably have a mobile device before they have a wired PC,” looked promising, he added.

More from News & Analysis

What is the US HIRE Bill and why is India’s $250-billion IT sector worried? Is the internet dead? What's this theory that OpenAI's Sam Altman says might be true?

As advertising campaigns become increasingly global, the lack of compatibility between 3G phone networks in Europe and in Asia could however be a hurdle. “We have to have a common system and the technology has to have enough bandwidth for delivering the message,” said Martin Sorrell, the chief executive of WPP, the world’s largest advertising group by revenue. The LTE or Long Term Evolution standard, if it is widely adopted for new 4G high-speed mobile technology, could be a solution. But 4G is not expected to hit the mainstream before the middle of the next decade.