• by Mark Walsh  @markfwal, September 10, 2008

Nearly 77 million U.S. mobile subscribers recalled seeing some form of advertising on their phones--an 81% increase from a year ago, according to a new study by Nielsen Mobile.

 

While such trends signal an improving mobile ad market, the report also highlights how advertising has lagged behind the growth of mobile media usage. The majority of mobile ad viewers (63%), for instance, see ads just once a month or less.

Furthermore, less than two-thirds of page views of top mobile sites carry advertising, and half of that inventory is taken up by unpaid house ads. And overall response rates to mobile advertising appear to be flat compared to a year ago, at 13%.

At first glance, the expansion of mobile media in the U.S. would suggest stronger corresponding ad growth. In addition to a 23% year-over-year increase in mobile data services, phones have become more sophisticated, and media companies have boosted the quantity and promotion of mobile content.

Topping mobile data categories among U.S. subscribers are SMS text-messaging (53%), MMS messaging (26%), pre-installed games (21%), ringtone downloads (19%) and the mobile Internet (17%).

"What's more, the uniquely personal, portable and actionable qualities of mobile as a marketing platform appear today to be widely espoused and accepted in the advertising community. And yet, stagnation," the report states.

Nielsen points to three factors holding back mobile advertising: Advertisers and agencies are not yet fully aware of the size of mobile content audiences; the complexity of the mobile ecosystem which intimidates media buyers; and a lack of trust in the medium because of survey results showing that consumers are not receptive to mobile advertising.

Overcoming these hurdles requires demonstrating the mobile audience has reached critical mass, greater education about the mobile ecosystem, and providing targeted advertising and campaign results, according to Nielsen. (Naturally, the ratings firm touts its own data and tracking services to support efforts to boost mobile advertising.)

In dealing with the perception of daunting complexity, Nielsen suggests focusing on Internet and SMS messaging as the most straightforward opportunities in mobile advertising. They each provide critical mass of audience (43 and 138 million unique users, respectively) and simplicity of activation.

Mobile Internet users are 60% more likely to find advertising acceptable because of their familiarity with the texts ads and banners on the desktop Internet, according to Nielsen. In the same vein, mobile data customers are 44% more likely to be receptive to advertising if it's relevant to their interests. (Only 9% agreed mobile advertising was "acceptable" in a prior Nielsen Mobile report.)

For that reason, "profiling will play a critical part in the expansion of the mobile advertising market," stated the latest study. To that end, Nielsen last week unveiled its Mobile-Prizm service, combining mobile data with its research on audience lifestyle segments, aimed at improving mobile ad targeting.

This month, Nielsen is also launching Mobile AdRelevance, a new offering providing information on mobile campaigns and brands advertising in mobile.