Getting a handle on how much money actually is being spent on this platform for marketing has always been tough. For years, the sheer youth of the field meant that mobile marketing was just a wilderness of small start-ups whose revenue was hard to see -- let alone track. The field is still fragmented by display, SMS, mobile search, IVR, and a content sales market in ringtones and wallpapers that could be considered both direct sales and marketing.
But recently we have been seeing more financial institutions and marketing conglomerates weigh in for their clients on the size and potential of the market. Analyst Brian Wieser at Magna generally proves a sober voice among otherwise hype-driven forecasters, for instance. He reports yesterday that mobile advertising should grow 36% this year (to $229 million), which represents a bit of a slowdown from earlier projections. Still, he anticipates a "re-acceleration" next year, especially as the ecosystem latches more firmly onto the promise of ad supported apps. He sees mobile spend hitting $409 million in 2011.
Wieser cites the usual suspects for the upbeat forecast: high mobile and SMS penetration, rising habitual use of mobile Web, widening use of smart phones; and, of course, the iPhone. "The establishment of an endemic ecosystem of software developers and consumers capable of performing 'closed-loop' marketing creates real demand for marketing services inside of the platform," he says.
Mobile ad networks are poised to benefit most from mobile growth, Wieser contends, so I started by checking in with some of the CEOs actually cashing whatever checks are coming into the sector. Both Quattro's Andy Miller and Millennial Media's Paul Palmieri think Wieser is coming in low. Miller calls mobile "the Internet on steroids." In addition to the familiar spenders driving Web growth early on -- auto, financial and retail -- he is seeing the consumer packaged goods firms get interested earlier in the lifecycle of this medium. "The benefits of an always-on, always-there personal medium are driving the mobile growth curve to be much steeper than the Internet curve in regards to major consumer and business brand investment," Miller says. For Quattro specifically, he expects 3.5X to 4.5X growth in 2009.
Palmieri, too, aims higher than the Magna projection, although he agrees many others have been unreasonably high. "We are seeing revenue growth already this year far exceeding this forecasted growth, so I think the predication is too conservative by calling for a doubling in the next two years."
Of course both Miller and Palmieri can be enjoying the fruit of consolidating market share, perhaps experiencing greater growth than others. Anecdotally, I continue to hear mixed messages from various pieces in the mobile marketing value chain. Some tell me volume is up but revenue is down, and others say they are indeed seeing one of the main fears about the downturn realized: mobile is a "test" that is easily cut from budgets.
There is no doubt that the app platforms are driving a lot of interest in display, however. App analytics and ad technology company Medialets is seeing "significant interest from brands in display spending in applications on iPhone, Blackberry and increasingly on Android," says CEO Eric Litman. "Mobile display overall will grow this year," he adds, but the increasingly important shift is from mobile Web to applications.
But that still leaves the curious cases of carrier-based marketing revenue and the value or robustness of SMS campaigns and in-text SMS advertising. I see a lot of analysis out there speaking to the mobile Web and apps recently, but less about these segments that may in the end represent more revenue than the others.
But let's do our own gut check of the Q1 results. Any other CEOs of ad networks and mobile marketing executives want to belly up with their impressions of the market health after a quarter of real billings in 2009? What do the ledgers tell you? Want to share publicly? Write in below. Otherwise, send me a note and I will anonymize you. We will gather together all reports in an upcoming column.
Clarification: We've updated the April 30 Mobile Insider to reflect new stats from MySpace, which reports that the share of mobile traffic coming from applications rose from 10% to 35% last year.