The document discusses the mobile advertising market. It notes that the market has moved past trials to significant spending by brands on regular campaigns. While fragmentation and lack of standards remain challenges, growth in mobile search and commerce are driving the market. The document provides an overview of market segments and key players in the mobile advertising ecosystem and value chain. It recommends that messaging will see continued strong growth due to its suitability for mass campaigns, but that display advertising will overtake SMS spending in many markets by 2011-2012.

1. Click to edit Master title
Mobile Advertising
style
Market Opportunities, Challenges and
Recommendations for Stakeholders
Click to edit Master subtitle style
Shailendra Pandey
Senior Analyst, Mobile Content & Apps
shailendra.pandey@informa.com
http://twitter.com/Shailendra_ITM
21/04/2011
11/09/2009

2. The mobile advertising market today
• The mobile advertising industry has moved on from the trial and experimental
phase and many brands are now spending significant sums on mobile campaigns
on a regular basis.
• The investment from big players such as Google and Apple validates the market
opportunity, resulting in brands and agencies more actively considering mobile for
their campaigns.
• The launch of Apple’s iAd advertising platform is forcing rivals to speed up their
own mobile advertising strategies. Google has responded by acquiring AdMob.
• The growth of m-commerce is also making the mobile channel more attractive for
advertisers and will be a key driver for mobile advertising in the coming years.
• Another key driver is the strong growth of mobile search with Google reporting a
500% growth in mobile search queries between 2008 and 2010.
• Market fragmentation in the devices market and among operating systems and a
lack of standard practice continue to restrict growth in the mobile advertising
market.
www.informatm.com 21/04/2011 2
©Confidential

3. Mobile advertising market drivers and barriers
www.informatm.com 21/04/2011 3
©Confidential

4. Mobile advertising market segmentation
www.informatm.com 21/04/2011 4
©Confidential

5. Global mobile advertising market to 2015
Mobile Internet display advertising will overtake SMS to become the biggest mobile
advertising revenue channel in 2011.
In 2014, it is expected that advertising revenues from mobile search will – for the first
time – be greater than advertising revenues from SMS .
www.informatm.com 21/04/2011 5
©Confidential

6. Global mobile advertising revenue share, by type,
2010 vs. 2015
www.informatm.com 21/04/2011 6
©Confidential

7. Mobile advertising ecosystem and value chain
www.informatm.com 21/04/2011 7
©Confidential

8. Mobile Operators
• Operators need to partner with companies who can help them use their subscriber
data to create a unique centralized picture of each subscriber, and also gain more
understanding of their prepaid users.
• During 2010, many mobile operators, including Orange, O2 UK, Movistar Spain,
VimpelCom Russia, Maxis Malaysia and Claro Argentina, launched services/trials to
encourage subscribers to opt-in to mobile advertising.
• At present, most operators are using mobile advertising to drive a greater usage of
their own services, products and promotions.
• It is becoming quite clear that for the operators, close partnerships with other value
chain players is essential and a better strategy than attempting to build an in-house
mobile advertising solution and their own creative and sales teams.
• Mobile operators are now realizing that they need to work together to establish a
pan-operator data exchange to strengthen their position in the mobile advertising
value chain and to compete with the likes of Google and Apple.
www.informatm.com 21/04/2011 8
©Confidential

9. Advertisers/Brands
• Many brands that tried mobile advertising couple of years ago decided to wait
because the market then was too fragmented. These brands are now seeing
consolidation in the market and are coming back to spend on mobile advertising
campaigns.
• Increasingly brands are interested in paying for advertising on performance basis i.e.
on a CPC or CPA basis rather than CPM.
• Having a mobile site is crucial for companies interested in a sustained and long-term
mobile advertising strategy. A mobile site is also very useful for collecting consumer
data and enhancing the company’s image.
• There is a rush from many brands to introduce their mobile app, particularly an
iPhone app. However, the app must offer interesting or useful content otherwise not
many will use these types of branded mobile apps.
• Brands are realizing that once they have one or two popular mobile apps with millions
of users, they can also use those apps to promote their new products and services.
www.informatm.com 21/04/2011 9
©Confidential

10. Mobile Ad Agencies
Full Service Agencies
Aegis Group M&C Saatchi
Carat Media Square
Fox Interactive Media Medialets
gomeeki Mobile Interactive Group
Grey Group Ogilvy
Impact Media WPP
Mobile Specialist Agencies
01tribe iconmobile
12snap Inside Mobile
2ergo Marvellous
5th Finger mFusion
AKQA Phonevalley
Ansible RingRing Media
Cellempower Sponge
DYMA Media The Hyperfactory
Enpocket We Love Mobile
Fetch Media Wireless Developer Agency
Source: Informa Telecoms & Media
www.informatm.com 21/04/2011 10
©Confidential

11. Mobile Ad Agencies
• Large media agencies are showing a willingness to integrate mobile into the
advertising mix but find it challenging to convince brands of the ROI and the
premium price associated with mobile advertising.
• A key barrier to the growth of mobile advertising is the lack of understanding of the
mobile medium beyond SMS campaigns, among the media planner executives
within ad agencies.
• There is a strong need to educate the media booking agents about the mobile
medium. Creative agencies often pitch advertising that can be extended to mobile,
which the media booking agents ignore due to their limited knowledge of mobile.
• Large media agencies are looking to buy mobile advertising start-ups and mobile
specialist firms, which can enable them to offer services to brands showing an
increasing interest in mobile advertising and branded mobile apps.
• Mobile advertising needs to be integrated into a bigger mix of media to drive
creativity and better response rates.
www.informatm.com 21/04/2011 11
©Confidential

12. Mobile Ad Networks
Admob Microsoft Mobile Advertising
4th Screen Advertising Millennial Media
Adfonic Mobile Worx/ZestAdz
Admoda/Adultmoda MobiSolv
Advertising.com/AOL Nokia Interactive Advertising
ArMobi Pudding Media
BuzzCity Quattro Wireless
Enpocket RhythmNew Media
Hands Third Screen Media
InMobi Tigerspike
JumpTap Velti
Madhouse Yahoo
MADS YOC Group
Source: Informa Telecoms & Media
www.informatm.com 21/04/2011 12
©Confidential

13. Mobile Ad Enablers and Network Optimisers
Adsmobi MobPartner
AdMarvel Ringleader Digital
AdWhirl RingRing Media
Greystripe Smaato
madvertise Sofialys
Medialets Tapjoy
Mobclix DoubleClick
Source: Informa Telecoms & Media
www.informatm.com 21/04/2011 13
©Confidential

14. Mobile Ad Networks and Ad Enablers
• Mobile ad networks have to play a key role in educating the media planners and
encouraging them to run mobile-specific campaigns, and not view mobile as just an
extension of the interactive path to TV, online, print and outdoor advertising.
• At present, most mobile ad networks struggle to achieve an overall fill rate of higher
than 30%. Fill rates are the ratio of served ads to requested ads or available ad
inventory.
• Mobile ad networks need to focus on increasing the quality of ads served to
requests, which will increase CTRs and generate better returns for advertisers and
publishers from mobile advertising.
• The emergence of ad enablers/network optimizers in the value chain is helping to
address the mobile advertising scale and reach issue, improve fill rates and enable
mobile publishers to increase their mobile advertising revenues by finding the best-
performing ad network for their inventory.
• To improve their margins, big players such as Smaato and Mobclix are moving
towards becoming mobile ad networks.
www.informatm.com 21/04/2011 14
©Confidential

15. Value chain: Mobile ad platform vendors
www.informatm.com 21/04/2011 15
©Confidential

16. Mobile Ad platform vendors
• The shift in the operators’ attitude from building in-house systems towards the
purchase and outsourcing of mobile ad-serving platforms has led to the increase in
opportunities for mobile advertising platform vendors.
• Many operators are negotiating zero-risk trials for mobile advertising with platform
vendors. Instead of paying an upfront fee for technology license and hardware,
operators are asking platform vendors to implement the solution at their own cost and
take a share of the advertising revenues.
• Mobile advertising platforms need integration of ad tracking for post-click analysis so
that media executives can track the effectiveness of campaigns across different ad
networks and publishers.
• The lack of standard practice in the various mobile advertising platforms for the
measurement of campaigns is restricting the industry’s growth.
• Most mobile advertising platform providers have a legacy in network equipment
vending and lack knowledge and experience of selling advertising on mobile phones.
www.informatm.com 21/04/2011 16
©Confidential

17. Value chain: Mobile search providers
www.informatm.com 21/04/2011 17
©Confidential

18. Mobile search providers
• Many mobile operators offer directory services but do not have search engines that
can rival the big online players such as Google, Yahoo, and MSN. It makes more
sense for the mobile operators to partner with these big search engines for mobile
search.
• By partnering with a search engine, mobile operators can take advantage of the
search engine’s existing volume of resources and technology, and the search
engine will benefit from access to the operator’s large subscriber base.
• Search users on mobile phones usually have more urgent needs for the information
and therefore, from the advertisers’ perspective, are more likely to pay for their
products and services than users of search on PCs.
• The reporting of good metrics and analytics on mobile search is needed to gain
insights into how specific target audiences use mobile devices to search for
products and services.
www.informatm.com 21/04/2011 18
©Confidential

19. Informa viewpoint and recommendations
Informa Telecoms & Media believes that the global mobile advertising market was
worth US$3.5 billion in 2010 and is expected to generate revenues of US$24 billion
in 2015.
Messaging will continue to see strong growth as a mobile advertising medium over
the next five years, simply because it is the best mobile medium for mass-market
campaigns.
However, mobile display advertising using banner ads will see stronger growth and
overtake ad spending on messaging in many markets by 2011-12.
Successful companies with unique and attractive technology and solutions for
mobile advertising, mobile location, social networking and personalization are
becoming attractive acquisition targets for the likes of Google, Apple, Nokia and
Yahoo.
The fragmentation in the mobile advertising market looks unlikely to reduce
anytime soon, and in fact may escalate due to possible anti-competitive practices
of Apple, Google and other big players.
www.informatm.com 21/04/2011 19
©Confidential

20. Thank you
For more information
https://commerce.informatm.com/reports/mobile-advertising-3rd-edition.html
Make better business decisions