• by Erik Sass , May 15, 2008

On average, small banner ads on mobile devices produce the same level of brand recall as the typical 30-second TV spot, according to Stephanie Bauer Marshall, the mobile advertising leader for Verizon Wireless, who shared some of the telecom giant's data at the Mobile Advertising Degree conference in Los Angeles on Wednesday.

Along with executives from mobile ad agencies and other mobile service providers, Marshall made a strong case for mobile advertising --but conceded the medium hasn't been growing as rapidly as it should.

"The banner ads work really well, and that's where you have the greatest reach," Marshall said, adding that she "was blown away" by IAG data showing they were on par with TV spots in terms of brand recall. (IAG used the same method for measuring brand recall that it does with TV ads). Mobile banner ads also produce click-through rates that are "exponentially higher than online" banner ads, where CTR has fallen to about 0.3%; mobile banners produce an overall click-through rate of 2%, even "slightly higher for entertainment brands."

But Marshall conceded that click-through rates are increasingly viewed as insufficient measurement by some advertisers, and described a variety of additional measurements used by Verizon. In addition to IAG, Verizon has commissioned brand recall studies by Insight Express and Dynamic Logic, as well as customer insight studies by GfK Starch.

She also acknowledged that there is confusion among advertisers and media buyers on pricing--an issue that was also touched on by Ben Kennedy, director of business development for GroupM Kinetic's mobile advertising operation. Kennedy cautioned that CPMs, while fluctuating, will be higher on average for mobile than other media because of the high level of engagement, evident in the click-through rates.

Marshall assured the audience that "over time, the market's going to find out where the balance is." Currently, CPMs range from $20 to $30, and she opined that "around $20 or so is probably reasonable."

Finally, Dag Olav Norem, a senior analyst with M:Metrics, noted that the United States lags far behind other parts of the world in terms of penetration by mobile marketing. Altogether, just 20% of U.S. mobile users receive an SMS marketing message at least once a month, versus 75% in Europe. But there is also an "opposite correlation between penetration and response rates": Of people receiving SMS marketing messages in Europe, 4.9% respond, compared with 12.4% in the U.S.

Looking to the future, "the trajectories are all headed in the right direction" for the expansion of mobile marketing in the U.S," Norem said.