Dialing For Dollars: Analysts Boost Mobile Ad Outlook

Forecasts of breakthrough years and big growth are nothing new for the mobile industry, and 2008 appears to be no exception, according to early predictions by mobile analysts and other industry watchers in recent days.

Much of the optimism stems from mobile initiatives begun in 2007. They include the launch of the iPhone, setting a new standard for mobile Web surfing, and the shift toward more open mobile platforms reflected in Google's forthcoming Android system and Verizon Wireless' move to open its network to any device meeting certain specifications.

eMarketer projects mobile ad spending overall to cross the $1 billion threshold for the first time, jumping to $1.55 billion in 2008 from $878 million last year. The market research firm also predicts the mobile marketing industry will execute its first campaign of more than $1 million and that "local mobile search will become a huge battleground among Web giants, mobile operators and local directory publishers," according to Senior Analyst John du Pre Gauntt.

Other analysts also expect the mobile screen to become a more advertising- and e-commerce-friendly medium in 2008.

"As an ad medium, mobile is no longer a novelty and some interesting and creative mobile campaigns and promotions emerge this year," wrote Greg Sterling, principal at Sterling Market Intelligence on his Screenwerk.com blog. He also foresees mobile devices playing a more crucial role linking the Internet to brick-and-mortar stores by providing in-store price-comparison and product information.

Both eMarketer and Sterling expect smart phones to become increasingly mainstream as their prices continue to drop. As the iPhone in particular gains growing market share, it will in turn help spread mobile Internet adoption.

Meanwhile, Michael Gartenberg, vice president-research director at JupiterResearch, wrote on the Jupiter analyst blog on Tuesday that he already "had a pretty good idea what's coming" in 2008 but couldn't spill the beans because of various confidentiality agreements. But he advised readers to look for big developments in three areas: the consumer digital home, consumer mobile devices, and "things that bridge these two worlds seamlessly."

Not all the predictions for mobile in 2008 are unfailingly upbeat. Mobile industry newsletter FierceWireless looks for high-end mobile service Helio to go bust this year after reporting a $92 million loss during its fiscal third quarter. The mobile startup backed by SK Telecom and Earthlink had attracted only 130,000 subscribers as of August 2007.

Separately, FierceWireless expects that Verizon's widely praised decision to open its network to any device and any application will prove disappointing to consumers. That's because Verizon will still block phones that offer competing voice services such as Skype and won't carry phones incompatible with its CDMA network. Given the history of overly enthusiastic forecasts for mobile media and advertising, the last two predictions could prove the most accurate.

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