Big brands sceptical about mobile advertising

The global mobile advertising market will be worth $1.72bn in 2008

The potential of mobile advertising is huge but has yet to convince mainstream brand owners, according to new research.

Informa Telecoms & Media said that the global mobile advertising market will be worth $1.72bn in 2008 rising to $12.09bn by 2013.

Around 80 per cent of the advertising will be generated by mobile content providers, according to the analyst firm.

"The mobile content market is creating the mobile advertising opportunity," said report author Nick Lane.

"But the big brands remain sceptical about the return on investment that will justify the premium rate-card already associated with this emerging medium."

Lane believes that the situation will change, but that companies looking to get a slice of the revenues must remain patient.

"Releasing the big brand spend is key to unlocking the potential of mobile advertising," he said.

The Informa report claims that the majority of early-adopter big brands have yet to transfer more than 0.5 per cent of their advertising budget onto mobile services.

While this is due in part to the "much-maligned issues" of non-existent measurement and premium pricing associated with early formats of mobile advertising, the report argues that these are short-term hurdles.

The mobile advertising industry would be better served concentrating on educating the consumer and providing a visible and measurable return on investment to the brands, according to Informa.

"There is an absence of innovation in mobile advertising that has enabled the industry to accept internet-based models devoid of the functionality and capability that mobile technology delivers," said Lane.

"True mobile advertising does not exist today; what we are referring to is 'advertising on mobile'.

"When mobile advertising combines user profiling, location and communication with unique mobile inventory, the industry can justify charging a premium rate over existing immeasurable advertising channels."