Why 2008 Won't Be The Breakthrough Year for Mobile Advertising

Apparently Nokia mobile ad bigwig Jeremy Wright cracked a joke last week about 2008 being the seventh year in a row that mobile advertising is supposed to break through. He's right: for nearly a decade, mobile has been promoted as the next big thing in advertising. And the sector looks like it's finally gaining some real momentum. We've heard news from Barcelona this week that O2 has signed a deal with 4th Screen Advertising to run mobile pre-roll ads, that Yahoo and T-Mobile are partnering for mobile search and other mobile content, and that the big UK mobile operators are teaming up to set standards for mobile ad measurement.

But unfortunately for Nokia, Yahoo, T-Mobile, O2, 4th Screen, and everyone else in the mobile ad game, 2008 is not going to be a breakthrough year in mobile advertising in Europe, and we're all going to be telling these same jokes in 2009.

As I discuss in my report Mobile Marketing in Europe: Lack of Scale, Standards, and Systems Inhibit Near-Term Growth, European advertisers currently point to five key inhibitors to their use of mobile advertising:

  1. Difficulty finding budget for mobile advertising
  2. Difficulty finding inventory for mobile advertising
  3. The high cost of mobile ad inventory
  4. Difficulty deciding on mobile advertising tactics (e.g., inexperience with the platform)
  5. Difficulty measuring mobile advertising

This week's announcements will start to chip away at these inhibitors: the Yahoo/T-Mobile and O2/4th Screen deals will increase available inventory and should over time bring down prices, while the operator working group should make measurement more effective. But nothing we've heard about offers a quick fix: it'll take time for T-Mobile and O2 to generate significant user traffic (and therefore significant ad inventory) from their new offerings, and setting industry standards can take anywhere from months to years. So if any of the initiatives announced this week have an impact in 2008, it probably won't be until the second half of the year -- and there's a good chance they won't have a meaningful impact until 2009.

Meanwhile, we're still faced with the largest problem for mobile advertising: advertisers simply can't find much money to buy mobile ads. In our most recent mobile marketing survey, almost three-quarters of European mobile advertisers and agencies said they planned to spend less than €25,000 (around €35,000) on mobile marketing in the next year.

With mobile advertisers planning to spend that little in 2008 -- and with inventory, prices, tactics and measurement all still unsolved problems -- we simply don't believe that 2008 will be the breakthrough year for mobile advertising in Europe. Things will definitely get more interesting in 2009 -- but we think the real breakthrough for European mobile advertising will come in 2010.