• by Diane Mermigas , October 26, 2010

Mobile ad spending is ramping faster than predicted, growing more than six-fold from 2009 to nearly $2.55 billion in 2014. But the changing dynamics driving it will have a more profound impact on marketing and media business models.

That is the underlying message of a new eMarketer report by Noah Elkin, "Mobile Advertising and Marketing: Past the Tipping Point." He analyzes a broad array of data and concludes what this column has contended for years - that personal relevance is the new value proposition.

Consumers are embracing marketing messages on their personal connected devices as long as they get something relevant and tangible in return: customized shopping selections, discounts, data or other content. Consumers will increasingly pay for some of this - if it enhances their quality of life. Marketers and media content providers failing to grasp that fundamental will miss the mobile gravy train.

Early growth indicates mobile devices will continue to be the dominant pathway to consumers. Still in its infancy, mobile ad spending grew 30% in last year's languishing economy and is expected to increase another 78% this year, driven in large part by the fierce competition of hardware, software and service providers. The race by Apple and Google for mobile consumer and advertiser market share has morphed into a full-blown clash of the titans encompassing Microsoft, Verizon, AT&T and others.

Particularly important are the rapid gains made by Google's Android (better positioned to simplify the ad-buying process, according to Elkin) and by Apple's iPad (sales are nearly equal to Mac desktop and laptop computers combined since its April debut). Expanding iPad distribution beyond its own 300 stores to more than 8,000 mainstream Wal-mart and Target stores could remarkably push 2010 iPad sales past 15 million units sold, according to Forrester Research.

Google has the ability to bring scale to mobile advertising by ongoing strategic acquisitions and integrating mobile ad market with its AdMob desktop inventory and media-buying process, Elkin says. Even Microsoft's Advertising Exchange for Mobile is off to a quick start with real-time auction-bidding to set values across mobile and desktop inventory.

But mobile is about so much more than advertising.

The emergence of texting as a universal communication tool among mobile users (and supported by 90% of the handsets on the market) provides another cornerstone for the new mobile marketing and media mind-set. That nearly half of U.S. mobile phone users ages 18 to 34 (particularly adults with children, according to Harris Interactive) are interested in receiving text alerts from marketers, and that more than one-third would act on them (visiting or buying at the merchant's website or store) represents an extraordinary opportunity to achieve consumer relevance.

Free and paid mobile apps are another shortcut to consumers - anchored by as much as 80% adoption by iPhone and Android users - that must be mastered by marketers and media content providers.

The same applies to mobile permission-based orientation of social networks and geotargeted or location-based marketing, which provide a more functional and transactional relationships with consumers. GroupOn and LivingSocial are rapidly demonstrating the economics of instant connection-instant buy. Through basic applications, such as couponing and barcode price comparisons, companies have the opportunity to transform connections into push-button sales.

It's also easy to overlook the potential potency of virtual goods, expected to top $2 billion in 2011 according to social-games publisher Inside Network, as major brand advertisers, such as McDonald's and Cascadian Farms, flock to auction-based SVNetwork to connect with Zynga's 250 million game playing members.

The overriding implication is that advertising in the traditional sense will be redefined by interactivity and reduced to just one of many mobile marketing and content approaches. Mobile devices are, by sheer numbers, already the universal screen and platform of choice. That guarantees a resetting of marketing spend and expectations.

While content providers continue wrestling with digital economics (the latest, noisiest example is the Fox-Cablevision fiasco), they could be missing the opportunity to more aggressively follow their advertisers into an interactive mobile arena already exceeding expectations.

Mobile is the first level playing field in which all media and marketing are confronted by the same learning curve, and where entrepreneurial innovation is more valuable than experience or size. It is no place for siloed businesses, such as television (now video), radio (now audio), newspapers and magazines (it's all about words).

Mobile is not so much a shock to traditional marketing and media systems as a way to expand them, for those enterprising enough to try.

The aggregation of information in the eMarketer report serves as a wake-up call to companies still pinning their future fortunes on static platforms. Waiting for a clear, massive shift of ad dollars from print and television to mobile devices is misguided. The mobile paradigm is much bigger and bolder.