Mobile advertising - Madison, we have lift-off

Nov 27th 2008
From The Economist print edition


Advertising on mobile phones finally seems to be getting through
MARKETERS have often claimed that mobile advertising is taking off. But this time they could be right, recession or not. Global numbers are hard to come by, but a leading mobile-advertising firm, AdMob, says the number of advertisements it has delivered worldwide has tripled, to 4.5 billion, in the past 12 months. Why? Because many of the obstacles that have held mobile advertising back are going away.
One is hardware. For years, surfing the internet on a phone was a pain, because screens were too small and the controls too clunky. But a new generation of “smart” phones such as Apple’s iPhone, Google’s G1 and the BlackBerry Storm have solved this problem. They have touch-screens large enough to display the web properly—and advertisements, too.
Faster networks and lower rates also help. Having to wait for an advert to download, while being charged for the privilege, was unlikely to inspire warm feelings about the product being advertised. But with download speeds increasing and flat-rate “all you can eat” data plans, mobile services and applications are becoming more popular—and, increasingly, funded by advertising.
Perhaps most importantly, marketers are starting to work out which types of advertising work on mobile phones. Simple text-messages and banner adverts still dominate, but a more interesting idea is to spread the word using several channels. Amobee, a start-up, allows customers to insert adverts not just into text messages and mobile-internet sites, but also into games and other programs that run on handsets.
Another promising approach is to trade services for attention. Some of Amobee’s customers let people send free text messages if they allow them to insert advertising. Blyk, a mobile operator, offers subscribers—who must be between 16 and 24 years old—217 free text messages and 43 minutes of free airtime per month as long as they agree to receive six ads every day. A year after its launch in Britain, Blyk has signed up 200,000 subscribers—twice what it had aimed for.
Yet another approach is to combine mobile services with real-world events. This summer Phonevalley, a mobile-marketing agency owned by Publicis Groupe, an advertising conglomerate, offered a service that set up a teleconference between friends when their football team scored. It was sponsored by Puma, a sportswear-maker.
Advertising on mobile phones, like that on social-networking sites, presents risk and opportunity. The risk is that it can seem intrusive, since it appears in an intensely personal context. But that is also what makes it so attractive to advertisers—provided they can target their audience without seeming insensitive.