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SUMMARY
Executive Summary
Suffering from a devalued proposition and diminished audience via traditional
media, advertisers are shopping around for better promotional avenues. For
brands that have recently discovered the power of the World Wide Web, the leap
of imagination to mobile is not a hard one to make- almost any advertising or
marketing activity that has been possible over the Internet is now possible on
a mobile handset. Still, the potential of this opportunity, and the business
models that would make mobile advertising work remain difficult to fully grasp.
There are four types of mobile media that will enable brands to build presence
in a manner that is appropriate to nurturing a stable and long- lasting
relationship with mobile subscribers. Some will stay, others will fizzle. SMS
currently accounts for 90 percent of mobile marketing revenue; we expect
WAP-based advertising to be the largest category for mobile advertising spend
in the short-term; mobile TV and video are more longer term opportunities, but
will bring in tangible revenue.
Similarly, we expect a disintermediation of the mobile advertising value
chain. Even operators are not immune to disintermediation as brands bypass
operator portals to go directly big to media WAP sites (e.g., Google). In this
report, we analyze which players are unlikely to survive - unless they take
action. We also review sample MNO and MVNO approaches to Mobile advertising,
from the now-defunct Mobile ESPN model to the far-fetched ad-supported Xero
Mobile model.
Key questions answered:
- Which of the four types of "pull" mobile media - SMS, Mobile Web (Display
& Search), Mobile Video/TV, and Downloadable Applications/Content - will be
the largest categories for mobile advertising spend, in both the short and
long term?
- Of the six parties in the mobile advertising value chain - the Brand, the
Advertising Agency, the Advertising Enabler, the Media Company, the Mobile
Operator/MVNO, and the Subscriber - which will remain a driving force in the
industry, and which will become obsolete? What will the long-term mobile
advertising landsccape look like both in terms of number of players and type
of players?
- How effective will mobile advertising be in providing new revenue streams
for operators? What are the risks and considerations, including the affect on
churn, that operators should consider?
- What is the best way to introduce subscribers to mobile advertising? How
can all parties facilitate a learning curve that brings end users up to speed
with the medium?
- How can brands best accomplish a shift in perception of mobile advertising
from a short-term revenue focused view to a longer-term, more strategic
approach?
- How will 3G adoption relate to mobile advertising uptake? What other
factors will contribute, and which will be the most important in predicting
spend?
- What will the global mobile advertising market be worth in 2011? $5
million? $5 billion? What markets and regions will see the biggest share of
that revenue, and why?
TABLE OF CONTENTS
List of Exhibits
Acronyms and Abbreviations
Companies Mentioned in This Report
Executive Summary
Glossary
Section 1: Deciphering Mobile Advertising
- 1.1 The Shift of Advertising Dollars to Digital
- 1.2 Internet Advertising: A Rehearsal for Mobile
- 1.3 Is the "Third Screen" Ready for Advertising?
- 1.4 Mobile Advertising Requirements: Valuable, but Optional
- 1.5 Mobile Advertising Models: From SMS to Mobile TV
- 1.6 SMS: Effective, but Not the Real Thing
- 1.7 Mobile Display Advertising- The WAP Renaissance
- 1.8 Mobile Search: Google Is Coming
- 1.9 Mobile TV: A Well-established Advertising Format?
- 1.10 Applications/Content
Section 2: The Mobile Advertising Value Chain
- 2.1 The Brand: Looking to Maximize Ad Spend ROI
- 2.2 The Advertising Agency: Of the Need to Understand Mobile Advertising
- 2.3 The Advertising Enabler
- 2.4 The Media Company
- 2.5 The MNO/MVNO: The Strongest Link
- 2.6 The Subscriber
- 2.7 Towards a Value-chain Disintermediation
Section 3: Success Factors
- 3.1 The Operator Value Proposition: More Risk than Reward?
- 3.2 The Subscriber Experience: I Don't Like It, I Don't Want It (unless
you reward me)
- 3.3 Advertising Agency Volatility: Make Waves, but Don't Rock the Boat
Section 4: Where and When?
- 4.1 Handset Evolution/Technology Adoption: Are We There Yet?
- 4.2 Where Will It Take Off?
- 4.3 How Large Is the Mobile Advertising Opportunity?
List of Exhibits
- Exhibit 1: 2004/2005 Advertising Spend by Category, Top 5 Largest US
Spenders
- Exhibit 2: The US Mobile Marketing Landscape by Revenue (US$m), 2006
- Exhibit 3: Top Mobile Internet Websites, USA, June 2006
- Exhibit 4: Example WAP Banner Ad Link to WAP Microsite
- Exhibit 5: Total Global Unicast/Broadcast Mobile TV Subscriptions, 2006-
2010
- Exhibit 6: Example Mobile TV Caption Link to WAP/Video Microsite
- Exhibit 7: Mobile Advertising Summary Table: Strengths, Weaknesses, and
Market Opportunity
- Exhibit 8: Mobile Advertising Value Chain
- Exhibit 9: Operator Margin Scenarios for Broadcast Mobile TV
- Exhibit 10: 3G Subscribers by Region (percentage of total subscriber
base), 2003- 2010
- Exhibit 11: 3G Subscribers by Country (percentage of total subscriber
base), 2007
- Exhibit 12: Internet Advertising Spend per Capita, 2006
- Exhibit 13: Mobile Advertising Revenue Forecast 2007- 2011 by Region
(US$bn)
Companies Mentioned in This Report
- Action Engine
- AOL
- Bango
- Cisco
- Cingular Wireless
- CNN
- Coors
- Enpocket
- ESPN
- Fox Networks
- Google/YouTube
- Ingenio
- MapQuest
- MobiTV
- Motorola
- MSN
- Orange
- Rhythm New Media
- Screen Tonic
- Sprint
- Third Screen Media
- Verizon
- Virgin Mobile
- The Weather Channel
- Xero Mobile
- Yahoo!
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