Mobile Boost

[Posted by Neil Strother]

 

Spending on mobile advertising just got a boost. Jaguar and Land Rover committed this week to a combined $1.6 million mobile ad buy buy for 2009.

 

That might not mean much in other channels, but for mobile this is significant. Few brands have devoted that much money to mobile in a single year. And it shows that even in a recession some are willing to spend, especially to reach consumers who increasingly access Web content from cell phones. (You can view a report on mobile Web adoption, if you’re a Forrester client, or arrange to buy it if you aren’t.)

 

The two luxury auto brands – now controlled by India’s Tata Motors – will split the budget on campaigns through AdMob's U.S. network – a nice lift for AdMob itself as the mobile ad network continues to gain ground.

 

Is your brand budgeting on mobile in a significant way in 2009? If so, I’d like to hear about it for upcoming reports. Send an email to nstrother@forrester.com.

Barcelona Rumblings

[Posted by Neil Strother]

The quiet rumblings out of Barcelona shook the mobile marketing landscape this week – a little. If you weren’t paying close attention to goings on at Mobile World Congress, though, you likely missed it. Some highlights:

 

• GSMA’s interesting mobile marketing metrics for Europe: Search (Google), social networks (facebook) and news (BBC) are among top mobile sites, and use is consistent throughout the day, with early morning hours (7 to 10 a.m.) the heaviest

 

• Recognition the mobile Web has arrived – thanks to smartphones and that handset from Apple

 

• More brand advertisers spending on mobile – AdMob reported more than a doubling in number from last year

 

All encouraging. And props to the Euro operators involved in the GSMA feasibility study. So where are the U.S. carriers and those in Asia or Latin America on this?

 

Clearly, much work needs to be done to remove the friction involved in mobile marketing and there’s a need for greater understanding of the ROI. Yet these rumblings signal some growth, and the next jolt might not be so imperceptible.

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.

JupiterResearch Forecasts European Mobile Ad Spending Will Reach �1.3 Billion in 2012

We've just released a new report that forecasts the European mobile advertising market (which includes mobile display advertising and mobile search marketing, but NOT mobile messaging ads like SMS and MMS ads) will reach €1.3 billion in 2012. The biggest driver for the growth of the market will be consumers' increasing use of mobile browsing: we're forecasting that by 2012, 40 percent of Europeans will browse the mobile Internet on a regular basis.

The good news is, as consumer use of mobile browsing grows, many marketers are ready to spend: finding enough mobile ad inventory is one of mobile marketers' biggest concerns. Of course, it's not merely an inventory problem right now -- there are plenty of other problems that need to be solved as well. The mobile marketers we surveyed told us that finding more money for mobile ads was their biggest problem, many said mobile advertising CPMs were too high, and a huge number complained about the lack of mobile ad measurement as well. But we believe the growth of mobile browsing will solve the problems around low inventory and high prices, and measurement should also improve significantly as online adserving and measurement vendors continue to push into the mobile space.

The bottom line is, there's huge potential in this market -- but the industry needs to overcome quite a few obstacles before that potential can be realized. We think most of those problems will get ironed out over the next five years, and that the market will really start to grow towards the end of that period.

Jupiter clients can read my colleague Thomas Husson's full Mobile Advertising in Europe report here, or my shorter Mobile Marketing in Europe report here. Non-clients can get further details in the press release here.