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Mobile Advertising and Marketing is the third consecutive report analysing the rise of mobile advertising on the global market.
This strategic research report from Berg Insight provides you with 150 pages of unique business intelligence and expert commentary on which to base your business decisions.
This report will allow you to:
> Identify tomorrow’s most profitable advertising opportunities in the mobile space.
> Understand the fundamentals of the ad-based mobile media revenue models.
> Recognise the key barriers restraining the growth of the mobile advertising market.
> Comprehend the relative importance of digital channels compared to other advertising media.
> Learn about the early experiences of mobile marketing campaigns by top global brands.
> Profit from valuable insights about ad-funded business models for mobile operators.
What are the key business opportunities for value added services in the mobile industry? Berg Insight’s VAS Research Series is a unique series of analytical industry reports. Each title offers detailed analysis of current hot topics such as mobile messaging, mobile Internet, mobile TV, mobile broadband or mobile marketing. We put mobile VAS into a greater perspective, offering a realistic approach and accurate forecasts.
Mobile communication is a global phenomenon that has thoroughly changed the way people interact with each other. More than 4 billion subscribers are using mobile services every day, more than twice the number of traditional Internet users. Mobile devices have several unique characteristics that make them highly suitable for advertising and marketing. Handsets are extremely personal devices since they are owned and used by one person. They are almost always with the person, which allows contextual targeting of people on-the-go.
Being switched on at almost all times, they also allow advertisers to reach the consumers in the right moment. Since today’s mobile handsets are highly interactive devices and are featured with a range of functions including video players, music players, cameras and web browsers there are many different options for interaction.
Another major benefit is that the mobile space is less crowded than most other channels whereby adverts get more attention. For these reasons mobile is becoming a natural part of the marketing media mix. Handsets are highly private devices that offer a unique platform for personal interaction with consumers. Advertisers are increasingly aware of the opportunities and seek new ways to exploit them. Just the simple fact that people are able to make a phone call or send a text message anywhere at any time has changed the conditions for marketing in general. Many marketing campaigns are designed to trigger a response in the form of a voice call, SMS/MMS or a visit to a mobile website. Handsets are also a suitable platform for building brand awareness through the distribution of free content or applications. Mobile advertising is yet another channel that evolves along with mobile Internet access.
As the advertising and marketing industry acquires more and more experience of the mobile channel it will become a natural part of the integrated marketing media mix. As digital media converge there will however be less distinction between mobile and traditional Internet advertising. Digital campaigns will be designed to reach out to consumers on a broad range of platforms, including everything from full-size PCs to smartphones.
Berg Insight estimates that the total value of the global mobile marketing and advertising market was € 1,014 million in 2008. Asia-Pacific constituted the main regional market, accounting for around 75 percent of the total value. Despite the shrinking advertising market, the mobile channel has grown over the past year underpinned by increasing mobile media usage. Growing at a compound annual growth rate of 43 percent, the market will be worth € 8.7 billion in 2014 – corresponding to 11.7 percent of the total digital advertising market.
The mobile marketing and advertising ecosystem is highly fragmented and complex, which is typical for an immature industry.
Many companies try to find their place in the value chain and get a piece of the market. Much of the activities carried out are still on an experimental stage and actors are constantly looking for new business models and services that could generate revenues. However, many large brands have launched numerous campaigns and are now moving beyond the trial stage to establish the mobile channel to be part of the media mix. Campaigns are getting increasingly complex and more integrated into larger campaigns, spanning several media formats. Most firms specialized in enabling mobile advertising are still relatively small, venture capital funded actors.
Many larger players are taking a relatively cautious stance with the exception of a few companies such as Vodafone, Yahoo! and Google. Over the past three years a number of the larger players have acquired firms specialized in mobile advertising. The largest deal to date was Google’s US$ 750 million acquisition of AdMob in November 2009.
Many mobile operators have actively engaged in mobile advertising activities in some form. The level of activity, however, varies vastly between different operators. Turkcell is one of the most aggressive promoters of mobile advertising since Blyk discontinued its MVNO business. Vodafone offers a wide range of services across the globe, some commercially available while others are of an experimental character. Besides the operators, both Nokia and Ericsson have launched various services to accelerate the mobile advertising developments.
This report answers the following questions:
> Who will be the winners in the mobile advertising race?
> How can mobile handsets become integrated in the marketing media mix?
> What changes in the mobile industry and end-user behaviour are required before mobile advertising can become a multi-billion euro market?
> How are Google, Microsoft, Nokia and Yahoo! positioning themselves to become leading mobile advertising networks?
> Who are the rising stars that stand out from the crowd among the mobile advertising and marketing companies?
> How well suited for advertising are different existing and future mobile media channels?
> What are the initial experiences from mobile marketing campaigns?
> Which advertising formats will become most successful in the mobile environment?
> In what ways can location technology improve the relevancy of mobile advertising?
Executive summary
Mobile communication is a global phenomenon that has thoroughly changed the way people interact with each other. More than 4 billion subscribers are using mobile services every day, more than twice the number of traditional Internet users. Mobile devices have several unique characteristics that make them highly suitable for advertising and marketing. Handsets are extremely personal devices since they are owned and used by one person. They are almost always with the person, which allows contextual targeting of people on-the-go. Being switched on at almost all times, they also allow advertisers to reach the consumers in the right moment. Since today’s mobiles are highly interactive devices and are featured with a range of functions including video players, music players, cameras and web browsers there are many different options for interaction. Another major benefit is that the mobile space is less crowded than most other channels whereby adverts get more attention.
For these reasons mobile is becoming a natural part of the marketing media mix. Handsets are highly private devices that offer a unique platform for personal interaction with consumers. Advertisers are increasingly aware of the opportunities and seek new ways to exploit them. Just the simple fact that people are able to make a phone call or send a text message anywhere at any time has changed the conditions for marketing in general. Many marketing campaigns are designed to trigger a response in the form of a voice call, SMS/MMS or a visit to a mobile web site. Handsets are also a suitable platform for building brand awareness through the distribution of free content or applications. Mobile advertising is yet another channel that evolves along with mobile Internet access.
As the advertising and marketing industry acquires more and more experience of the mobile channel it will become a natural part of the integrated marketing media mix. As digital media converge there will however be less and less distinction between mobile or traditional Internet advertising and market. Digital campaigns will be designed to reach out to consumers on a broad range of platforms, including everything from full-size PCs to smartphones.
Berg Insight estimates that the total value of the global mobile marketing and advertising market was € 1,014 million in 2008. Asia-Pacific constituted the main regional market, accounting for around 75 percent of the total value. Despite the shrinking advertising market, the mobile channel has grown over the past year underpinned by a strong momentum and increasing mobile media usage. Growing at a compound annual growth rate of 43 percent, the market will be worth € 8.7 billion in 2014 – corresponding to 11.7 percent of the total digital advertising market.
The mobile marketing and advertising ecosystem is highly fragmented and complex, which is typical for an immature industry. Many companies try to find their place in the value chain and get a piece of the market. Much of the activities carried out are still on an experimental stage and actors are constantly looking for new business models and services that could generate revenues. However, many large brands have launched numerous campaigns and are now moving beyond the trial stage to establish the mobile channel to be part of the media mix.
Campaigns are getting increasingly complex and more integrated into larger campaigns, spanning several media formats. Most firms specialized in enabling mobile advertising are still relatively small, venture capital funded actors. Many larger players are taking a relatively cautious stance with the exception of a few companies such as Vodafone, Yahoo! and Google. Over the past three years many of the larger players have acquired firms specialized in mobile advertising. The largest deal to date was Google’s US$ 750 million acquisition of AdMob in November 2009.
Many mobile operators have actively engaged in mobile advertising activities in some form. The level of activity, however, varies vastly between different operators. Turkcell is currently the most aggressive promoter of mobile advertising since Blyk discontinued its MVNO business. Vodafone offers a wide range of services across the globe, some commercially available while others are of an experimental character. Besides the operators, both Nokia and Ericsson have launched various services to accelerate the mobile advertising developments.
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Table of Contents
Table of Contents i
List of Figures. vi
Executive summary1
1 Advertising and digital media .3
1.1 The marketing and advertising industry.3
1.1.1 Global advertising expenditure ..3
1.1.2 Advertisement expenditure by media .5
1.1.3 Top 20 global advertisers..6
1.1.4 Marketing industry players7
1.2 The Internet media channel..8
1.2.1 Internet usage trends ..8
1.2.2 Internet advertising expenditure..10
1.2.3 Internet advertising formats13
1.3 The mobile media channel .14
1.3.1 Western Europe15
1.3.2 United States .17
1.3.3 Japan.17
1.3.4 Emerging markets ..19
2 Mobile advertising..23
2.1 The mobile handset as an advertising platform ..23
2.1.1 Physical characteristics of the mobile handset24
2.1.2 Handset software 25
2.1.3 Location capabilities..27
2.1.4 Mobile networks and data transfer capabilities28
2.1.5 Mobile Internet versus PC based Internet..29
2.2 Advertising on the mobile handset.30
2.2.1 Deploying mobile advertising30
2.2.2 Targeting the campaign ..31
2.2.3 Exploiting location technology.33
2.2.4 Privacy concerns.34
2.2.5 Pricing models and cost..35
2.3 The mobile advertising ecosystem.37
2.3.1 Advertisers..38
2.3.2 Ad agencies and creative designers.38
2.3.3 Digital ad networks.38
2.3.4 Technical solution providers .39
2.3.5 Mobile operators .40
2.3.6 Online media publishers and mobile application providers .41
2.3.7 Industry associations.42
3 Messaging and mobile marketing .43
3.1 SMS and MMS marketing43
3.1.1 Push messaging..47
3.1.2 Pull messaging and Common Short Codes .51
3.2 Idle screen and cell broadcast .52
3.3 Mobile coupons53
3.4 Proximity-based marketing.54
3.4.1 Bluetooth .55
3.4.2 NFC 56
3.4.3 Barcodes .57
3.5 Case studies ..59
3.5.1 GlaxoSmithKline delivers information about hay fever using SMS59
3.5.2 Ace Hardware drives sales through Mobile Posse’s idle screen solution .59
3.5.3 Cellfire takes coupons to the mobile handset..60
3.5.4 Sony Pictures promotes up-coming film using Bluetooth hotspots .61
3.5.5 Pepsi – first FMCG brand to launch a QR code campaign in the UK..61
4 Mobile web advertisement.63
4.1 Portals65
4.2 News and information66
4.3 Mobile search 68
4.3.1 Market players and strategies ..70
4.3.2 Directory services and local search ..71
4.4 Communities and social networking .72
4.4.1 Market players and strategies ..75
4.4.2 Social media marketing77
4.5 Case studies ..78
4.5.1 Vodacom in South Africa launches mobile portal for rugby fans ..78
4.5.2 Vodafone taking portals to the next level with Vodafone 360..79
4.5.3 Auto Trader sees surging mobile traffic due to improved search functionality ..80
4.5.4 Useful Networks increases conversion rate with location information 81
5 Ad-funded applications and content 83
5.1 Mobile applications.83
5.2 Mobile games 86
5.3 Mobile map and navigation applications.88
5.4 Mobile video and music ..91
5.4.1 Mobile video..91
5.4.2 Mobile music .93
5.5 Case studies ..96
5.5.1 Tohato engages consumers in mobile gaming to promote new snacks ..96
5.5.2 Location-based advertising a reality in Japan .97
5.5.3 Pizza Hut launches iPhone application for ordering pizza 98
5.5.4 Swisscom trials mobile video advertising ..99
6 Forecasts and conclusions.101
6.1 Mobile marketing industry analysis .101
6.1.1 Buyer-side: Continued shift from traditional to digital media.101
6.1.2 Supply-side: Some consolidation but still a multitude of players103
6.1.3 Consumer-side: Major gap between PC and mobile Internet usage 104
6.1.4 Channels and formats: Which will succeed? .106
6.1.5 Convergence trends110
6.2 Potential market value analysis .110
6.2.1 Target audience and exposure .111
6.2.2 CPM levels111
6.2.3 CTR for mobile campaigns .114
6.2.4 Revenue sensitivity analysis 115
6.3 Market forecasts 116
6.4 Final conclusions..120
7 Company profiles and strategies .125
7.1 Top advertising agencies .125
7.1.1 Dentsu 125
7.1.2 Omnicom Group126
7.1.3 WPP Group..127
7.1.4 Interpublic Group .127
7.1.5 Hakuhodo DY Holdings 128
7.1.6 Publicis Group128
7.1.7 Asatsu-DK.129
7.1.8 Aegis Group 129
7.1.9 Havas..130
7.1.10 MDC Partners .130
7.2 Telecom industry players .131
7.2.1 Blyk changes strategy and closes its MVNO.131
7.2.2 Turkcell a mobile advertising pioneer with 8 million opted-in subscribers.132
7.2.3 Vodafone offering mobile marketing services across 18 markets..133
7.2.4 Ericsson establishing itself as an ad-broker ..135
7.2.5 Nokia increasingly focusing on services and acquiring LBA specialist136
7.3 Digital industry players ..138
7.3.1 Google aims at leadership in mobile advertising.138
7.3.2 Microsoft challenges Google in the digital space140
7.3.3 Yahoo! changes strategy and focus more intensively on mobile services.141
7.4 Mobile advertising players142
7.4.1 AdMob142
7.4.2 Amobee.143
7.4.3 Comverse .144
7.4.4 mBlox..145
7.4.5 Netsize145
7.4.6 Smaato ..146
7.4.7 Velti..146
Glossary 149
List of Figures
Figure 1.1: Total advertisement expenditure (Worldwide 2008).4
Figure 1.2: Global advertisement expenditure by medium (Worldwide 2008)5
Figure 1.3: Top 20 advertisers Worldwide (2007)..6
Figure 1.4: Top 10 advertising agency companies (2008) 7
Figure 1.5: Most popular online activities across Western Europe 24–34 years old (2008) 8
Figure 1.6: Top 20 US websites (August 2009) ..9
Figure 1.7: Online advertisement expenditure by region (Worldwide 2008).10
Figure 1.8: Online advertising as share of total advertising spend per market (2008) 11
Figure 1.9: Online ad spend by category in the US (2007–2008) ..12
Figure 1.10: Online advertisement spending by format in main EU markets (2008) 13
Figure 1.11: Mobile subscribers by region (Worldwide Q4-2008)..15
Figure 1.12: Mobile Internet usage penetration among mobile subscribers (2008) .16
Figure 1.13: Mobile Internet users in the US (2008–2009) .17
Figure 1.14: Japanese mobile subscriber statistics (July 2009)..18
Figure 1.15: Mobile penetration rates on major emerging markets (2008)20
Figure 2.1: User behaviour by phone capabilities in the UK (January 2009)25
Figure 2.2: Performance parameters for different position determining methods .27
Figure 2.3: MMA recommendations for mobile web banner ads (October 2009)..31
Figure 2.4: Stakeholders in the mobile marketing value chain 37
Figure 3.1: Proportion of users that received SMS ads in Europe during November 2008..44
Figure 3.2: People receiving SMS ads and response rates in Europe during August 2008.45
Figure 3.3: Comparison of bulk messaging methods ..48
Figure 3.4: Examples of mobile messaging advertising response types51
Figure 3.5: Examples of barcodes..58
Figure 4.1: Activities done over mobile Internet (UK & US May 2008).64
Figure 4.2: Top mobile sites in the US ranked by audience composition (July 2009).67
Figure 4.3: Top Internet search engines user trends (July 2009) 68
Figure 4.4: Number of subscribers performing search in the US (January 2009) .69
Figure 4.5: US subscribers accessing local mobile content (March 2009)72
Figure 4.6: Most popular communities (Worldwide 2009) .73
Figure 4.7: Mobile social networking usage in EU-5 (November 2008)..75
Figure 5.1: Application stores offered by handset vendors (2009) 84
Figure 5.2: Mobile subscribers playing downloaded games in EU-5 (November 2008) 86
Figure 5.3: Examples of mobile map and navigation solution providers 89
Figure 5.4: View from the Layar application ..90
Figure 5.5: Share of mobile subscribers watching mobile video during November 2008.92
Figure 5.6: Digital music as share of total recorded music sales (2008) 94
Figure 5.7: Examples of ad-funded streaming music services.95
Figure 6.1: Acquisitions in the digital media industry (2009)..103
Figure 6.2: User behaviour for average Internet and mobile data users (US 2008)105
Figure 6.3: Video and TV viewing audience by format in the US (Q1–2009) .106
Figure 6.4: Comparison of CPM levels by media (2009)..112
Figure 6.5: Typical CPM rates for mobile advertising (2009) .113
Figure 6.6: Typical CPM for Internet and mobile advertising (US 1998–2009) .114
Figure 6.7: Mobile advertising sensitivity analysis115
Figure 6.8: Total and digital advertising revenues by region (Worldwide 2008–2014) .116
Figure 6.9: Mobile advertising revenues and forecast by region (Worldwide 2008–2014) .117
Figure 6.10: Online and mobile marketing expenditures in Japan (2004–2008) .118
Figure 6.11: Mobile advertising revenue forecasts in selected markets (2008–2014) ..119
Figure 7.1: AdMob ad requests by country (August 2009) .143
For full details, please email keithw@cmsinfo.com
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