Marketing News: Grant Keller of Acceleration : If the Internet was invented for mobile devices…

News Release from: MarketingUK
18/02/2010
Morgan Stanley report , Grant Keller, Acceleration, AdMarvel,Opera Mobile , Ad Mob,

The industry has been musing about the possibilities the mobile Internet will deliver to marketers, advertisers and publishers for a long time, but its potential has yet to be fully realised. That said, things are beginning to make headway.

There's no doubt running effective advertising campaigns on the mobile Web isn't easy. Mobile devices are smaller for a start, and that creates all sorts of challenges from a display point of view. But my gut feel is that people are willing to spend money on their mobile. It's a straightforward experience to, say, purchase a ring tone and have it simply added to your phone bill at the end of the month.

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A recent Morgan Stanley report on the mobile Internet predicted that while advertising accounts for 40 per cent of revenue over desktops at the moment, it only accounts for 5 per cent over the mobile Internet.  However, the mobile advertising sector is likely to continue to grow as adoption of mobile handsets, particularly smartphones, rises.  Gartner forecasts there will be 1.82 billion smartphones and internet-equipped handsets in use around the world in three years, which is more than the estimated 1.78 billion PCs that will be in use.

These statistics suggest that the marketing opportunities for the mobile Web could potentially be on the rise.  But it does pose an interesting question about where advertising revenue will sit in the future: will it migrate to the mobile web or stay firmly positioned on the desktop PC?

To try and answer this, I think we need to consider a few factors…

What is going on within the mobile landscape at the moment?

Apple’s iPhone applications have, in part, contributed to how people consume content via mobile devices. More people with iPhones are relying on applications to be their first port of call to brands’ websites for news and information. To show how successful this has been, we only need to look to Sky News. It launched its free iPhone application in May, and since then more than one million people have downloaded it.

Okay, we need to acknowledge that people weren’t asked to pay for this content, but even so, this is impressive. And if we stick with Apple for a second, there’s a lot to be said for its developments surrounding the launch of the iPad and how this is also going to change the way content is delivered and how advertising is served on this platform.

Now let’s look at Google. It’s widely believed its search business is topping out and slowing down in the US. Added to this, is Google’s belief in the mobile internet – it sees this as an integral part of its own evolution. The evidence, of which, can be seen through the launch of Nexus One and the mobile businesses it purchased. For example it acquired Ad Mob, a mobile display ad technology provider; Grand Central, a phone management service; and it has also recently been reported to be in talks with Yelp about acquiring the local review site that will allow it to provide more targeted advertising for local businesses on the mobile web.

Mobile versus desktop advertising

At the moment it is easier to serve adverts to desktops than mobiles devices. There are a whole range of factors that have contributed to this. Devices and operating systems are different, devices have varying screen sizes, key pads, operating systems, and limitations…and this is just excluding the bundle deals that mobile service providers have with handset manufacturers to pre-load content on devices before sending them out to consumers.

Combine this with the fact that the ad serving technology was never quite ready before to achieve what marketers wanted, it makes sense why mobile has been slow on the uptake. But now that Google, Apple, and other vendors are stepping up to the plate, we believe we might start to see significant changes in what is possible for marketers to achieve.

For instance with Google’s purchase of Ad Mob, it’s believed the search giant will be able to get a stronger grasp of the mobile internet landscape and provide more that just search ads to its customers, and that it will also be able to also provide SMS ads, web display ads and app display adds.

Now add Opera Software’s acquisition of AdMarvel, a leading provider of mobile advertising mediation services, into the mix. It’s believed this will allow Opera to monetise its Opera Mobile and Opera Mini browsers through the AdMarvel technology. Therefore it’s clear there’s a lot happening within the space, with many companies grappling to take a hold of the opportunity that’s out there.

There’s no definitive answer….yet

While all these developments are great and very exciting, and while we’re confident they will drive the way in which advertising and content is delivered and consumed via mobile devices, we think marketers also need to evaluate what is actually technically possible at the moment and whether it’s right for their brands before trying it out.

Beyond this, I’d be interested to hear your views on where you think the market might be heading in light of the developments taking place.

Grant Keller, Acceleration