Mobile advertising could become a strong source of revenue for the mobile industry, according to Frost & Sullivan.
The report: “Ad-based Content and Communications: A Lucrative Avenue for the Mobile Industry”, reveals the European mobile industry has extensively explored the use of advertising as a sustainable business model for mobile content, mobile messaging and other services. Despite being in the initial stage, these models have galvanised the industry, notes the company. The level of confidence of the mobile communications and advertising industries in the potential of mobile advertising is high.
The analysis estimates mobile social and content advertising market revenue should reach 2.18 billion euro in 2012 in Europe. Mobile content advertising, ad-based music, video, TV and games will represent the major source of revenue.
"To achieve high revenue, the mobile advertising industry will need to successfully confront three main challenges: continuously enhancing the mobile user experience through high-speed connectivity and high-quality user interfaces; using ads as a transparent value to consumers' mobile experience without being intrusive; and educating the advertising industry on how to exploit the advertising power of mobile devices," notes Saverio Romeo, Frost & Sullivan research analyst. "If these challenges are not adequately faced, the advertising market will not grow strongly as the mobile industry expects."
From the mobile industry point of view, advertising is a potential revenue stream that can counterbalance the continuous decrease of revenue from voice and SMS services. However, advertisers and agencies, the sources of the advertising revenue stream, are, only now, gradually learning to use the mobile device as an advertising medium.
"Agencies' budgets rarely include a specific allocation for mobile communications. An intense synergy between the mobile and the advertising industries is crucial to transform today's enthusiasm into strong revenue in the future,” Romeo concludes.
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