Ad spending on mobile messaging will reach $7.4 billion by 2017, fueled by a surge in location-based SMS text ads, according to a new forecast by U.K.-based Juniper Research.
While SMS may lack the pizzazz of rich media ads, they offer wider reach and a better chance of being opened, even if unsolicited, the firm said.
“Sending adverts using mobile messaging gives advertisers a simple, cheap and effective way of reaching consumers,” stated report author Charlotte Miller. “Adding location technologies is an even more powerful proposition, particularly for transactional advertising, as marketers can reach consumers who are near a location where they can purchase.”
Juniper acknowledges that while the idea of location-based SMS will likely raise privacy concerns, mobile operators such as O2 are relying on opt-in participation, allowing people to choose what types of offers they want to receive.
These types of approaches will become more common as operators look for revenue streams beyond voice and data without alienating consumers.