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| Mobile advertising and marketing: Market analysis and forecasts 2006-2011 |
Mobile advertising is coming to a phone near you - but simply translating
existing models won't work
The increasing availability of multimedia content is opening a large opportunity
for sophisticated forms of mobile advertising. As content that already
incorporates advertising - like live TV programming - makes its way to mobile
handsets, brands and entertainment content providers are beginning to see the
value of presenting full multimedia ads with programs.
Operators in the U.S. and Western Europe are currently either testing various
forms of advertising with 3G services or are allowing ads to be served on their
portals. A number of multimedia companies will launch advertising in H1 2006
within their multimedia offering. Furthermore, the entry of large online search
engines into the mobile world opens up new advertising opportunities in the
shape of context-based mobile search. What are the best strategies for success?
This report will tell you.
From 2005 when the nascent market garnered $255 million in Europe and the United
States, mobile marketing and advertising in these two geographical areas will
grow to exceed $1 billion in 2009, provided certain elements fall into place.
Issues to be resolved include business models and revenue share, the type,
length and frequency of ads, consumer attitudes and many others. Operators will
have to walk a fine line between maximising the revenue potential of
advertising, while at the same time not risk alienating subscribers and
increasing churn by doing so.
Based on interviews with key participants across the value chain, including
operators, media agencies, software application providers, access providers,
marketing specialists and trade association representatives, this 170+ page
report analyses the market drivers and barriers affecting mobile advertising and
marketing. It discusses the main market trends and charts the market evolution
in the US and Europe. The report examines mobile advertising opportunities
presented by MMS, video, TV, LBS, contextual advertising, as well as other niche
possibilities.
Questions answered in this report include:
What % of brand advertising and marketing budgets will go on the mobile channel
by 2011 and what will be the associated revenues?
Where are the biggest market opportunities?
How does mobile advertising compare to online and traditional media?
What advertising models exist and which ones will account for the biggest
market?
What types of mobile advertising are most likely to succeed?
How can operators and other companies in the value chain best position
themselves?
Why you should buy this report:
Mobile operators: Gain insight into the issues affecting mobile advertising and
where revenues can be derived from this new opportunity. Discover regional
adoption and usage of new technology and services, as well as market size data.
Obtain analysis of the key market participants and their products and services.
Brands/Advertisers/Marketers: Discover what opportunities exist in the mobile
advertising channel and what the best strategies are in this space. Learn about
market issues specifically related to mobile content and mobile marketing and
advertising including technology, media types, demographics, psychographics,
subscriber receptivity and trends.
Vendors: Learn what mobile operators' plans are with mobile advertising and
marketing. Find out how the market will evolve and how you can benefit from this
growth.
Chapter 1 Executive Summary
1.1 New Content and Technologies are Enabling Mobile Multimedia Advertising
1.2 Who Controls the Channel?
1.3 Market Trends
1.4 Multiple Advertising Opportunities Exist
1.5 Challenges and Issues to Consider
1.6 Market Forecasts
1.7 Conclusions
Chapter 2 Introduction
2.1 The Emergence of Mobile Marketing and Advertising
2.2.1 Technology to the Rescue
2.2.2 New Opportunities for Brands and Entertainment
2.3 Will Consumers Accept Advertising on Their Mobile Phones?
2.3.1 Opt-in and opt-out
2.4 The Bottom Line
2.5 Research Methodology
2.6 Focus and Objectives of the Report
Chapter 3 Strategic Overview
3.1 Mobile Phone Usage
Table 3.1: Mobile subscribers, 2004-2010
Table 3.2: Number of Handsets in Use and Penetration Rates in Selected
Countries
3.2 Handset Revenues
3.4 Impetus for Mobile Phone Upgrades
3.5 Adoption of New Technologies
Chart 3.1: US subscribers purchasing mobile video content, 2005 & 2010
(millions)
3.6 The Battle Over Content
3.6.1 Who Controls the Customer?
3.6.2 Off-portal vs on-portal content
3.7 Mobile Network Operators Need a Revenue Boost
Chart 3.2: Mobile Operators' Data Revenues, as % of total Wireless Revenue (by
Region)
3.7.1 Which Operators are Most Likely to Embrace Mobile Advertising?
3.8.2 Achieving Synergies Between Advertising and Content
Chapter 4 Market Analysis and Forecasts
4.1 From Voice to Rich Media
Chart 4.1: Penetration of multimedia-enabled handsets by region
4.2 Japan: The Mobile Advertising Pioneers
4.2.1 Japan's Early Entrance into Mobile Advertising
4.2.2 Video formatted advertisements
Chart 4.2: Mobile marketing and advertising expenditures in Japan, 2006 & 2009
4.2.2 Mobile Advertising in Korea
4.3 Terminology
4.4 The Mobile Channel
4.4.1 A New Channel with Unique Characteristics
4.4.2 What Can Mobile Marketing and Advertising Accomplish?
4.4.2.1 Mobile Advertising Market Drivers
4.4.3 Barriers to Successful Mobile Marketing and Advertising
4.4.3.1 Technological Barriers
4.4.3.2 Attitudinal Barriers
4.4.3.3 Mobile advertising will not work for all products and services
4.5 Advantages of Mobile Advertising and Marketing
Table 4.1: Comparison of Media Campaign Response Rates
Table 4.2: Advantages of Mobile Marketing vs. Traditional Marketing
4.6 Typical Marketing Campaigns
4.7 Mobile Advertising and Marketing Techniques
4.7.1 SMS
4.7.2 Premium SMS
4.7.3 Voice SMS
4.7.4 MMS
4.7.4.1 Premium MMS Campaigns
4.7.5 LBS
Chart 4.3: LBS subscribers by region, 2005
4.7.5.1 Push- vs Pull-Based Mobile Advertising
4.7.6 Mobile Banner Ads
4.7.7 Games
Chart 4.4: Total Global Revenues from Mobile Gaming, 2005-2010 ($ billions)
4.7.7.1 Advertising is being embedded in many games in multiple ways
4.7.7.2 In-game advertising spending
4.7.8 Multimedia - Music, Video, TV
4.7.8.1 Mobile Music and Advertising
4.7.8.2 Mobile Video Advertising
4.7.8.3 Advertising Through Mobile TV
4.7.8.3.1 Determining the Mobile TV Ad Model
4.7.8.3.2 Advertisers will find the mobile channel an increasingly attractive
alternative to TV
4.7.8.3.3 Differences Between Advertising on Mobile and Regular TV
4.7.8.3.4 Mobile TV Advertising is Seeing Early Traction in the US
4.7.8.3.5 Mobile TV Presents a Significant Opportunity for Advertising
Chart 4.5: Global mobile TV subscribers, 2005-2010
4.7.9 Adult Content
4.7.9.1 Adult Content Provides a Good Opportunity for Multimedia Ads
Chart 4.6: % of searches relating to adult material on PCs and mobile handsets
4.7.10 The Future of Messaging and Rich Media
4.7.10.1 Which Technology is Most promising for Mobile Advertising?
4.7.11 Differences Between Europe and the United States
4.8.1 Fixed-Line and Mobile Phones
4.8.2 Pre-paid vs. Contract
4.8.3 Attitudinal Differences
Chart 4.7: European wireless users are willing to receive SMS- promotions on
their phones
4.8.4 Structural Differences
Table 4.3: Penetration of 3G Phones per Country in Western Europe, 2005-2010
4.9 Characteristics of the European Market
Table 4.4: Relative Monthly Consumption of Mobile Data Services By Type Over
2G and 3G Networks, Quarter Ended December 2005
4.9.1 UK market
Table 4.5: U.K. Mobile Subscriber Monthly Consumption of Content and
Applications
4.9.1.1 Mobile Advertising Activity is on the Increase
Chart 4.8: Mobile Advertising Spending in the UK, 2005 & 2006
4.10 Characteristics of the U.S. market
Table 4.6: Mobile Content and Applications Used by U.S. Mobile Subscribers
4.10.1 SMS in the U.S.-The American Idol Effect
Chart 4.9: Percent of U.S. Mobile Phone Subscribers Who Have Used SMS, by Age
Grouping
4.10.2 MMS
4.10.3 Multimedia
Chart 4.10: US 3G subs vs. total subs growth, 2005-2010
Table 4.7: U.S. Consumers Who Watch TV Programs on Mobile Phones
4.10.4 TV Broadcasters and Other Entertainment Providers
4.10.4.1 Hollywood Takes Control of its Content
4.10.4.2 NBC Mobile
4.10.4.3 CBS Mobile Content
4.10.4.3 ABC
4.10.4.4 ESPN
4.10.4.4.1 ESPN's Mobile Advertising Strategy
4.10.4.5 MTV Looks to Mobile Advertising-Based Business Model
4.10.4.6 Warner Bros
4.10.4.6.1 Warner Bros' Revenue Share Concerns
4.10.5 Advertising Opportunities with Mobisodes
4.10.6 Magazines Embrace the Mobile Channel with Mobizines
4.10.6.1 Advertising on Mobizines
4.11 Privacy and Spam Considerations
4.11.1 Regulations
4.11.2 Attitudes Towards Spam
4.11.2.1 Perceptions of Spam in the US and Europe Among Operators and
Consumers
4.12 Demographics
4.12.1 Targeting the Right Product Advertising Towards the Right Age Group
4.12.2 Advanced Mobile Service Users
4.12.3 The Sweet Spot Ages
4.13 Key Players in Providing Content to the End-User
Table 4.8: Mobile Marketing/Advertising Participants
4.13.1 Agencies
4.13.2 Mobile Marketing Specialists
4.13.3 Aggregators/Gateway Providers
4.14 The Role of Wireless Network Operators
4.14.1 Operator Positioning in the Mobile Advertising Value Chain
4.14.2 Operator Attitudes to Full-Scale Advertising
4.15 Revenue Sharing and Billing
4.15.1 Display Advertising Cause Revenue Sharing Splits to be More Evenly
Distributed
4.15.2 Technology Services Billing
4.15.3 Premium SMS
Table 4.9: Premium SMS Revenue Sharing Splits - U.S.
4.18 Cost of mobile campaigns
Table 4.10: Mobile advertising cost comparison by bearer technology
4.19 How will mobile advertising evolve?
Figure 4.1: Mobile Advertising and Marketing Market Evolution
4.20 Alternative Advertising Models
4.20.1 Sponsorship of Mobile Services
4.20.2 Advertising funded content
4.21 Mobile Search
4.21.1 Internet Search vs. Mobile Search
4.21.2 Mobile Search Takes Off
Chart 4.11: Unique users visiting Yahoo!'s and Google's mobile search
interface
4.21.3 Proliferation of Major Search Engines into Mobile is Stimulating the
Market
4.21.3 Contextual Advertising will Become a Lucrative Market
4.22 Market Forecasts
Chart 4.12: Global Mobile Search Advertising and Marketing Spend, 2005-2011
Chart 4.13: Mobile Advertising Investment by Region, 2005-2011
Chart 4.14: Mobile Marketing Investment by Region, 2005-2011
Chart 4.15: Mobile Advertising Revenues, 2006-2011
4.23 Market Trends
4.23.1 Emergence of more one-stop shops
4.23.2 Emergence of mobile advertising specialists
4.23.3 Outsourcing of Mobile Advertising and Marketing
4.23.4 Demographic Changes will Shift Types of Mobile Advertising and
Marketing
4.23.5 Mobile Search Growth
4.23.6 The Fall of the Walled Garden
4.23.7 Falling Costs of Mobile Advertising and Marketing
4.23.8 Increasing Importance of CRM to Mobile Brands and Advertisers
4.23.9 Evolution of a Sustainable Mobile Advertising Business Model
4.23.10 Ad-subsidised MVNOs
4.24 Chapter Conclusions
Chapter 5 Competitive Landscape
Table 5.1: Major Mobile Players by Category in the Mobile and Advertising
Space
5.1 North American Marketing, Media, Access, and Platform Companies
5.1.1 Air2Web
5.1.2 AdMob
Chart 5.1: AdMob Revenue Split with Publishers
Chart 5.2: AdMob Revenue Split with Ad Source Partners
5.1.3 Captive Interactive
5.1.4 Enpocket
5.1.5 Mobile 365
5.1.6 g8wave
5.1.7 ipsh!
Table 5.3: ipsh! clients
5.1.8 mBlox
5.1.9 mia
5.1.10 MobiTV
5.1.10.1 MobiTV's Advertising Strategy
5.1.10.2 Advertising for live mobile TV and on-demand mobile TV
5.1.10.3 Future Opportunities
5.1.11 Mobliss
5.1.12 Modeo
5.1.13 m-Qube
5.1.14 Neven Vision
5.1.15 Nextcode
5.1.16 PaperClick/NeoMedia
5.1.17 QUALCOMM/MediaFLO
5.1.17.1 MediaFLO's Advertising Strategy
5.1.18 Soapbox Mobile
5.1.19 SquareLoop
5.1.20 Telescope
5.1.21 Third Screen Media
5.1.22 Twelve Horses
5.1.23 Versaly Entertainment
5.1.24 Vibes
5.1.25 Vidiator
5.2 European Marketing, Media, Access, and Platform Companies
5.2.1 12snap
5.2.2 Active Media
5.2.3 Ad2Hand
5.2.4 Buongiorno
5.2.5 Dynetics
5.2.6 Emexus
5.2.7 Flytxt
5.2.8 MindMatics
5.2.9 mkodo
5.2.10 Netsize
5.2.11 Opera Telecom
5.2.12 Phonevalley
5.2.13 Que Pasa
5.2.14 Screen Tonic
5.2.15 Streamezzo
5.2.16 Upstream
5.2.17 Watisit
5.2.18 Zamano
5.3 Mobile Search Firms
5.3.1 Google
5.3.1.1 Looking to the Third Screen
5.3.1.2 Click-to-call advertising service
5.3.1.3 Call-on-select
5.3.1.4 Towards mobile location-based advertising?
5.3.2 Yahoo!
5.3.2.1 Yahoo!'s Mobile Advertising Strategy
5.3.3 Microsoft
5.3.3.1 Integrating mobile search capability
5.3.4 Action Engine
5.3.5 4INFO
5.3.6 iCrossing
5.3.7 Ingenio
5.3.8 m-Spatial
5.4 Mobile Operators' Advertising Strategies
5.4.1 North American Operators
5.4.1.1 Cingular Wireless
5.4.1.2 Sprint Nextel
5.4.1.4 T-Mobile USA
5.4.1.5 Verizon Wireless
5.4.2 European Operators
5.4.2.1 Orange
5.4.2.3 O2
5.4.2.4 SFR
5.4.2.5 Hutchison
5.4.2.5.1 3 UK
5.4.2.5.1 3 Italy
5.4.2.6 T-Mobile International
5.4.2.7 Telefónica Móviles
5.4.2.8 Vodafone
5.5 Handset Manufacturers
5.5.1 Nokia
5.5.2 Samsung
5.5.3 Sanyo
5.6 Trade Associations
5.6.1 Mobile Marketing Association (MMA)
5.6.2 Mobile Entertainment Forum
5.6.3 Mobile Data Association
5.6.4 ICSTIS
Chapter 6 Case Studies
6.1 Flytxt and Orange UK
6.1.1 Objectives
6.1.2 Solution
6.1.3 Results
6.2 m-Qube and NBC/Endemol Entertainment
6.2.1 Objective
6.2.2 Solution
6.2.3 Results
6.3 12snap and Coca Cola
6.3.1 Objective
6.3.2 Solution
6.3.3 Results
6.4 Mobile 365 and Volvo
6.4.1 Objective
6.4.2 Solution
6.4.3 Results
Chapter 7 Strategies for Success and Recommendations
7.1 Strategies
7.1.1 Mobile Advertising/Marketing Doesn't Stand Alone
7.1.2 Recognise the Channel's Unique Features
7.1.3 Timeliness and Context Awareness
7.1.4 Relevance
7.1.5 Value
7.1.6 Opt-in Only
7.2 Recommendations
Appendix A Lead author's biography
Appendix B About visiongain
Appendix C Report evaluation form
12snap
3 Italy
3 UK
3GPP
4INFO
ABC
ABN-Amro
Absolut Vodka
Action Engine
ActiveMedia
ActiveSky
Adidas
AdMob
Aicent
Air2Web
AirCROSS
Airwide Solutions
Alltel Wireless
American Express
Anheuser Busch
AOL
Apple
Arqiva
BBC
Bell Mobility
Bertelsmann
Blockbuster
Boost Mobile
Boulanger
Bouygues Telecom
BT
Buongiorno Vitaminic
Cadbury
Calvin Klein
Canalsat
Captive Interactive
CBS
Channel 4
Cherrysauce
Chrysler
Cingular Wireless
Citibank
Citroen
Coca-Cola
Conde Nast
Crown Castle International
Cuervo
D2 Communications
Dentsu
Dimension 5
Dunkin' Donuts
Dynetic
Emexus
Empower Interactive
Endemol
Enpocket
ESPN
ESPN Mobile
Experian
Fandango
Flytxt
Ford
Fox Broadcasting Company
g8wave
Gavitec AG
General Motors
Gizmondo
go2
Google
Graphico
Harvest Media Group.
HBO Mobile
Hilton Hotels
HipCricket
HP
Hutchinson Whampoa
ICSTIS
Index Group
InfoGin
InfoSpace,
ING-Barings
Ingenio
Intel
Internet Broadcasting
ipsh!
ITV
Jamba
KDDI
Kelloggs
Leap Wireless
LG
LogicaCMG
Master Card
MauiGames
mBlox
McDonalds
Microsoft
Midwest Wireless
MindMatics
mkodo
Mobile 365
Mobile Data Association (MDA)
Mobile DTV Alliance
Mobile Information Access (mia)
Mobile Marketing Association
Mobile Media Sales
MobiTV
Mobliss
Mobot
Modeo
MotionBridge
Motorola
m-Qube
m-spatial
MTV,
NBC Mobile
NBC Universal Digital Media
Neo One
NeoMedia
NeoMedia Technologies
Netsize
Neven Vision
Nextcode
Nike
Nokia
NTT DoCoMo
O2 UK
O2 Ireland
O2 Nederland
Omnicom Group
Opera Telecom
Orange France
Orange UK
Palm
PaperClick
Pepsi
Phonevalley
Pot Noodle
Proctor and Gamble
Qualcomm
Que Pasa
Refresh Mobile
Rogers Wireless
Samsung
Sanyo
Screen Tonic
SFR
Sharp
SK Telecom
Sky
SmartVideo Technologies
Soapbox Mobile
Sony
Sony Ericsson
Sony Pictures
Sprint Nextel
Sponge
SquareLoop
Telefónica Móviles
Telescope
Telia
Telus Mobility
Texas Instruments
The Chrysalis Group
Third Screen Media
Time Warner Cable
T-Mobile Austria
T-Mobile Germany
T-Mobile UK
T-Mobile USA
Turner Broadcasting
Twelve Horses
Twentieth Television
Unilever
Universal Music Group
Upstream
USA Today
Verizon Wireless
Versaly Entertainment
Vibes
Vidiator
Vindigo
Virgin Mobile
VISA
Vivendi Universal
Vivid Entertainment
Vodafone Ireland
Vodafone Japan
Vodafone UK
Walt Disney Co
Warner Bros
WATISIT
Weather Channel
Weather Channel Interactive
Western Wireless
Xero Mobile
Yahoo!
Zamano
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