The Big Mo
Sizing the mobile ad market remains as nebulous a project as estimating Web ad spending back in the day. I hear numbers in the $150 million range and up for U.S. mobile marketing, but I don't think anyone even knows how to count all of the start-ups and marketing models at play here.
Informa claimed this week that a confluence of forces will make the sector explode in the next year. The proliferation of 3G networks and handsets is accelerating, as is consumer tastes for mobile multimedia. The brands are ready to buy in, analysts seem to think, after some years of experimentation. Informa estimates current worldwide spending at something in the area of half a billion, but for 2007 it sees ad sales hitting $1.5 billion. By 2011, Informa projects an $11.35 billion spend worldwide on mobile, when almost 4 billion people will have cell phones.
Informa echoes pretty much what we have been seeing and saying all year. The marketers seem eager for this, and even the carriers now recognize their own need to leverage the marketing potential of their platforms to goose otherwise stagnant average revenue per unit. But most of all, the consumers are demonstrating little of the much-feared resistance to the mobile ad models. In fact, Informa found in its survey users were willing to get free content in exchange for seeing pre-rolls, getting banners, and even seeing interstitials during load screens. The only exception seems to be SMS/MMS delivery. Consumers don't want ads pushed to their phones in a way that intrudes on their normal usage. They prefer to have messages attached to the content they like. According to people I have spoken with who participated in some of the carrier trials, everyone was surprised at the absence of consumer pushback for most of the formats they tried.
And it looks as if mobilistas will get a lot of practice with the ad model if they dip into the torrent of ad-supported big brand media gushing in. NYTimes.com went mobile this week, making much of its content available in one of the longest scrolls you will ever suffer on a cell phone. Micrososft is sole sponsor well into next year. Meanwhile Hachette Filipacchi announced it is launching Elle, Car and Driver, Premiere, ElleGirl.com and Shock in free WAP browser versions. If you don't mind clicking through fifteen pages of text, you can read the latest on Lindsay Lohan. Clearly some of the big brands will need to work a bit on customizing these experience for mobile, but it is notable how many of them are piling on this season. I noticed that the familiar Web advertisers seem to be migrating to handsets, with Vonage banners on the Elle Mobile site.
This follows Reuters, which moved to the ad model several weeks ago, and MSNBC.com, which also concluded a beta of its free mobile news and video. The quietest one of the bunch, oddly enough, was Google, which started offering Ad Word buys on mobile searches last week.
The momentum clearly is behind the mobile ad model, and I can't help but think it pressures the carriers to figure out their place in this ecosystem sooner rather than later. According to Informa, the mobile entertainment market (games, TV, music) will be worth $25.9 billion in five years, but how much of that will be funded by consumers and how much by advertisers? In the United States, mobile competes with too many other screens to easily show its singular value as a media platform. I suspect there will be a lot of price sensitivity with mobile content, and consumer eagerness to opt for the free alternatives as they come rushing in.
My guess is it is still too soon to hear from carriers exactly where they want to fit into the ad model, and no doubt each of the big three will give somewhat different answers. Keep an eye on the search engine partnerships and free content trials that get announced this week, which will give us some directional guidance about what they are thinking.