Advertisers have tiptoed around mobile marketing since its inception nearly a decade ago. However, a series of developments look set to strengthen its place on the media schedule.
Research released last week by Universal McCann identified a number of fresh opportunities for brand owners keen to experiment with advertising via wireless devices. The study of 10,000 mobile phone users around the world reveals that just 47% of the time they spend using their handset is for phone calls. Nearly 90% of those surveyed use their phone to take photos, while 28% download video clips.
This shift in mobile use is opening doors for advertisers, according to Tom Smith, EMEA research manager at Universal McCann. 'Marketers can now realistically take advantage of wireless devices to foster positive relationships with consumers,' he says.
Mobile marketing has been slow to take off in the UK, with technological restraints and a lack of consumer acceptance limiting advertisers to simple SMS promotions. The Internet Advertising Bureau (IAB) values the mobile marketing sector at just £50m, compared with £2bn for internet advertising and more than £3bn for TV. This is changing, however, with sophisticated mobile handsets and low-cost wireless internet access allowing brands to be more creative in the way they target consumers.
'The potential for using mobile to engage with consumers is huge,' says Ian James, head of digital media at Bacardi Global Brands. 'Like all advertisers, we need to think carefully about what we can do in this space to add value.'
In a significant step for the sector, Nokia last week bought mobile marketing provider Enpocket to boost its wireless advertising business. The acquisition will enable the world's biggest handset maker to provide clients with the technology and services to plan, create and measure mobile ad campaigns on a global scale. 'This game-changing move will give us the chance to strengthen the mobile advertising market and make it easier for the commercial ecosystem to develop,' says Tero Ojanpera, chief technology officer at Nokia.
The deal also brings Nokia into closer competition with Vodafone, which has partnered with Yahoo! to offer savings on services including games, mobile TV and picture messaging to consumers who opt in to targeted display ads. 'The UK's biggest brands are starting to dedicate research and development budgets to mobile marketing,' says Blake Chandlee, commercial director at Yahoo! UK & Ireland. 'We're confident that mobile display advertising will be a strong business area for us in 2008.'
T-Mobile and 3 are also working hard to strengthen their fledgling commercial offerings. Last month, T-Mobile made its first foray into advertiser-funded programming with a free-to-view video service backed by brands including Lynx, Nivea and Emap's Heat magazine. The company partnered with Rhythm New Media to enable its customers to download news, entertainment, celebrity gossip and film clips for free in exchange for watching TV-style ads before and after each video. 'Mobile video advertising is becoming popular with brands as they seek to reach time-poor consumers in a cost-effective way,' says Owen Hanks, UK media sales director at Rhythm New Media. 'We can measure spontaneous and prompted awareness and brand message recall.'
While mobile display advertising is finding its feet, sponsored search is well on its way to becoming big business. As the cost of wireless internet access falls, more consumers are using their mobile to search for information on the move.
Google last week moved to capitalise on this by rolling out AdSense, a sponsored search service that enables brands to run contextual ads on websites, to sites created specifically for wireless devices. The search giant is hoping to extend its dominance of the £1.2bn paid-search sector onto mobile, potentially a highly lucrative area given that there are three times more wireless devices than PCs globally.
'Mobile is becoming a key gateway for consumers to access information,' says David Thacker, group product manager at Google. 'As technology improves and mobile internet uptake increases, advertising budgets will follow.'
Wireless devices' growing sophistication is also allowing brands to experiment with location-based campaigns and rich-media ads. Earlier this month music label Parlophone became one of the first brands to run an initiative using Quick Response technology, which allows consumers to take a picture of a TV screen or billboard to be automatically directed to a branded mobile website.
Other emerging opportunities include Bluetooth marketing, which enables brands to send messages to people with Bluetooth-enabled handsets within a radius of 100m. 'Marketers have been incredibly conservative when it comes to mobile,' says Paul Seaton, managing director of Marvellous Mobile. 'This is changing with the introduction of cost-effective technology allowing them to leverage the medium properly.'
Mobile marketing remains a largely unproven sector despite these innovations; brands are only just beginning to experiment with advertising via wireless devices and budgets are small. Nonetheless, media owners, mobile networks and handset makers are investing heavily in developing opportunities that look set to drive the industry forward.