Mobile Advertising

Overview

This report provides in-depth analysis and market forecasts for the mobile advertising sector in the context of the global economic recession, and discusses how advertising spend is increasingly moving towards 'below the line' activities such as mobile phone ads – offering unparalleled opportunity for consumer engagement. 

Key forecasts include the number of users who receive advertising on their mobiles, both by region and by delivery channel (SMS, MMS, Mobile Internet, On-portal, In content downloads, Idle screen, P2P and Mobile TV). Other forecasts include cost per clickthrough (CPC) and cost per mille (CPM) rates  and the number of users who respond to mobile advertising.  The number of responses per annum and total adspend per channel are also forecast.

The report analyses a number of key drivers for mobile advertising such as the personal nature of the mobile phone, enabling targeted and potentially more effective campaigns.  The report also considers a number of major constraints including mobile's perceived lack of reach due to low access rates of rich media content and services.

Table of Contents

Executive Summary

1. The Opportunity for Mobile Advertising

1.1 Introduction    
1.2 Mobile as a Mass Medium    
1.3 Types of Advertising    
1.4 Mobile Advertising Channels    
1.4.1 SMS Advertising    
i. Types of Messaging Services    
a. Mobile-originated SMS    
b. Mobile-terminated SMS    
ii. SMS Advertising Campaigns    
a. Flytxt: SMS Pioneer    
b. The Development of SMS-based Campaigns: Blyk, Gorilla Recruitment and Penguin Books    
c. SMS ad Campaigns: Penguin - November 2007    
d. SMS ad Campaigns: P2P Advertising vs. A2P Advertising: Orange - August 2008    
Figure 1.1: P2P SMS On-Net Traffic Interception    
1.4.2 MMS Advertising    
i. MMS Services    
ii. MMS as an Advertising Channel    
a. MMS Response Mechanisms    
iii. MMS Campaign: BMW - November 2007    
Figure 1.2: BMW MMS Campaign Screenshot    
1.4.3 In-Content Download Advertising    
i. In Game Advertising Campaign: Jeep - March-April 2008    
Figure 1.3: Engagement Campaign Screenshots for Jeep, Screenshots    
ii. App Store Advertising Campaign: Carling - July 2008    
Figure 1.4: The Carling iPint    
1.4.4 On-Portal Advertising    
i. Banner Advertising    
a. Case Study: Tesco Mobile - April 2008    
b. Banner Standardisation - MMA Guidelines    
ii. Mobile On-Portal Search    
a. Case Study: Intel Mobile Scavenger Hunt - December 2008    
Figure 1.5: Madhouse Campaign Strategy & Screenshots    
1.4.5 Mobile Internet Advertising    
1.4.6 Idle Screen Advertising    
i. Idle Screen Campaign: Dairy Queen - March 2009    
ii. Idle Screen Campaign: Coca Cola - February 2009    
1.4.7 Mobile TV and Video Advertising    
i. Mobile TV Advertising Campaigns: MobiTV and Saw III - January 2007    
1.5 Cost Models    
1.5.1 Pricing    
Table 1.1: Amobee Ad Pricing (West Europe & North America)    
1.6 The Evolution of a Mobile Advertising Market    
Figure 1.6: Mobile Advertising Market Evolution

2. Drivers and Constraints

2.1 Key Drivers of Mobile Advertising Services   
2.1.1 Audiences for Traditional Media Are Diminishing   
Table 2.1: UK Adspend, % Change by Medium 2008 vs. 2007   
2.1.2 Brands Are Increasingly Pursuing Below The Line Strategies   
2.1.3 Personal Nature of Mobile   
2.1.4 Increasing Mobile and 3G Penetration   
Table 2.2: Relative Reach of UK Media 2008   
2.1.5 The Rise of the App Store   
2.1.6 Improvements in Handsets   
2.1.7 Opt-In   
2.1.8 Frequency Capping   
2.1.9 Advanced Targeting   
2.1.10 Response Rates   
2.1.11 Instant Measurement   
2.1.12 Value for Money   
2.1.13 The Walls Are Coming Down   
2.1.14 The Growth of Mobile Social Networking and Web 2.0   
2.1.15 Incremental Associated Revenues   
2.2 Constraints on Mobile Advertising Growth   
2.2.1 Privacy   
2.2.2 Low Fill Rates   
2.2.3 Handset Dimensions   
2.2.4 Connectivity   
2.2.5 Cost of Data Services   
Figure 2.1: Exponential Growth in Data as Prices Fall   
2.2.6 Reach/Visibility   
2.2.7 Need for Converged/Planned Campaigns   
2.2.8 Relevance   
2.2.9 Lack of Inventory   
2.2.10 Reduction in Perceived Value of Content   
2.2.11 Advertising Overload   
2.2.12 Spam

3. The Market for Mobile Advertising

3.1 Forecast Definitions and Methodology   
3.1.1 Forecast Definitions   
3.1.2 Forecast Methodology   
i. Method 1 - Cost per Click-through Based Model   
Figure 3.1: Forecast Methodology, Cost per Click-through Based Model   
ii. Method 2 - Cost per mille Based Model.   
Figure 3.2: Forecast Methodology, Cost per mille Based Model   
i. Method 3 - MMS Delivery Costs   
ii. Method 4 - Assumed Value Per TV Viewer   
3.2 Growth of the Cellular Market   
3.2.1 Global Cellular Subscriber Market Forecasts   
Figure 3.3: Cellular Subscriber Growth (m) Split by 8 Key Regions, 2007-2014   
Table 3.1: Cellular Subscriber Growth (m) Split by 8 Key Regions, 2007-2014   
3.3 Mobile Advertising in the Economic Downturn   
3.3.1 Expectations for Mobile Advertising   
3.4 Regional Mobile Advertising Forecasts   
Figure 3.4: Global Mobile Advertising AdSpend ($m) Estimates and Forecasts 1st Edition vs. 2nd Edition 2009-2014   
Table 3.2 Mobile Advertising Global AdSpend ($m) Estimates and Forecasts 2009-2014. 1st Edition Forecasts vs. 2nd Edition Forecasts   
Figure 3.5 Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014   
Table 3.3: Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014   
3.5 Mobile Advertising Forecasts By Channel   
Figure 3.6: Total Mobile Adspend ($m) Split by 8 Channels 2008-2014   
Table 3.4: Total Mobile Adspend ($m) Split by 8 Channels 2008-2014

4. SMS and P2P Messaging Advertising Forecasts

4.1 Recipients of SMS Advertising   
Table 4.1: Percentage of Subscribers Who Receive SMS Advertising Split by 8 Key Regions 2008- 2014   
Figure 4.1: Number of Subscribers (m) Who Receive SMS Advertising Split by 8 Key Regions 2006 - 2014   
Table 4.2: Number of Subscribers (m) Who Receive SMS Advertising Split by 8 Key Regions 2008 - 2014   
4.2 SMS Advertising Responses   
Table 4.3: Percentage of Mobile Subscribers Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Figure 4.2: Number of Mobile Subscribers (m) Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Table 4.4: Number of Mobile Subscribers (m) Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Figure 4.3: Average Number of User Responses per Annum to SMS Advertising Split by 8 Key Regions 2008-2014   
Table 4.5: Average Number of User Responses Per Annum to SMS Advertising Split by 8 Key Regions 2008-2014   
Figure 4.4: Total Number of User Responses Per Annum (m) to SMS Advertising Split by 8 Key Regions 2008-2014   
Table 4.6: Total Number of User Responses Per Annum (m) to SMS Advertising Split by 8 Key Regions 2008-2014   
4.3 SMS Advertising Revenues   
Table 4.7: Average SMS Advertising Cost per Clickthrough (CPC) Rates Split by 8 Key Regions 2008-2014   
Figure 4.5 Total Advertising Expenditure ($m) on SMS Advertising Split by 8 Key Regions 2008-2014   
Table 4.8: Total Advertising Expenditure ($m) on SMS Advertising Split by 8 Key Regions 2009-2014   
4.4 P2P Messaging Adspend   
Figure 4.6: Total Advertising Expenditure ($m) on P2P Messaging Advertising by 8 Key Regions 2008-2014   
Table 4.9: Total Advertising Expenditure ($m) on P2P Messaging Advertising Split by 8 Key Regions 2008-2014

5. MMS Advertising Forecasts

5.1 Recipients of MMS Advertising   
Table 5.1: Percentage of Mobile Handsets Able to Receive MMS Advertising Split by 8 Key Regions 2008-2014   
Table 5.2: Percentage of 2.5G/3G Subscribers Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014   
Figure 5.1: Number of Subscribers (m) Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014   
Table 5.3: Number of Subscribers (m) Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014   
5.2 MMS Advertising Revenues   
Table 5.4: Average Number of Advertising MMS Received Per User Per Annum Split by 8 Key Regions 2008 - 2014   
Figure 5.2: Total Number of MMS Advertisements Sent Split by 8 Key Regions 2008 - 2014   
Table 5.5: Total Number of MMS Advertisements Sent Split by 8 Key Regions 2008 - 2014   
Table 5.6: Average Cost ($) Per MMS Advertisement Delivered Split by 8 Key Regions 2008-2014   
Figure 5.3: Total Advertising Expenditure ($m) on MMS Advertising Split by 8 Key Regions 2008-2014   
Table 5.7: Total Advertising Expenditure ($m) on MMS Advertising Split by 8 Key Regions 2008-2014

6. In-Content Download Advertising Forecasts

6.1 Recipients of In-Content Download Advertising   
Table 6.1: Percentage of Users Who Receive In-Content Download Advertising Split by 8 Key Regions 2008-2014   
Figure 6.1: Number of Subscribers (m) Who Receive In-Content Download Advertising Split by 8 Key Regions 2008 - 2014   
Table 6.2: Number of Subscribers That Receive In-Content Download Advertising Split by 8 Key Regions 2008 - 2014   
6.2 In-Content Advertising Download Responses   
Figure 6.2: Average Number of Downloads Per User per Annum of Mobile Content Containing Advertising Split by 8 Key Regions 2008-2014   
Table 6.3: Average Number of Downloads Per User per Annum of Mobile Content Containing Advertising Split by 8 Key Regions 2008-2014   
Figure 6.3: Annual Number of Mobile Content Downloads (m) Containing Advertising Split by 8 Key Regions 2008-2014   
Table 6.4: Annual Number of Mobile Content Downloads (m) Containing Advertising Split by 8 Key Regions 2009-2014   
Table 6.5: Average Number of Advertisements per Downloaded Content Split by 8 Key Regions 2008-2014   
Figure 6.4: Annual Number of Advertisements (m) Viewed within Mobile Content Downloads Split by 8 Key Regions 2008-2014   
Table 6.6: Annual Number of Advertisements (m) Viewed within Mobile Content Downloads Split by 8 Key Regions 2008-2014   
Table 6.7: Response Rates to In-Content Download Advertising Split by 8 Key Regions 2008 - 2014   
Figure 6.5: Total Number of Responses (m) to In-Content Download Advertising Split by 8 Key Regions 2008-2014   
Table 6.8: Total Number of Responses (m) to In-Content Download Advertising Split by 8 Key Regions 2008-2014   
6.3 In-Content Download Advertising Revenues   
Table 6.9: Average In-Content Download Advertising Cost Per Clickthrough (CPC) Rates Split by 8 Key Regions 2008-2014   
Figure 6.6: Total Advertising Expenditure ($m) on In-Content Download Advertising Split by 8 Key Regions 2008-2014   
Table 6.10 Total Advertising Expenditure ($m) on In-Content Download Advertising Split by 8 Key Regions 2008-2014

7. On-Portal Advertising Forecasts

7.1 Recipients of On-Portal Advertising   
Table 7.1: Percentage of Mobile Subscribers Able to Access Operator Portals Split by 8 Key Regions 2008-2014   
Figure 7.1: Number of Subscribers (m) Who View On-Portal Advertising Split by 8 Key Regions 2007 - 20   
Table 7.2: Number of Subscribers (m) Who View On-Portal Advertising Split by 8 Key Regions 2008 - 201   
7.2 On-Portal Advertising Responses   
Table 7.3: Percentage of Mobile Subscribers Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Figure 7.2: Number of Mobile Subscribers (m) Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Table 7.4: Number of Mobile Subscribers (m) Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Figure 7.3 Average Number of User Responses Per Annum to On-Portal Advertising Split by 8 Key Regions 2008-2014   
Table 7.5: Average Number of User Responses Per Annum to On-Portal Advertising Split by 8 Key Regions 2008-2014   
Figure 7.4: Total Number of User Responses Per Annum (m) to On-Portal Advertising Split by 8 Key Regions 2008-2014   
Table 7.6: Total Number of User Responses Per Annum (m) to On-Portal Advertising Split by 8 Key Regions 2008-2014   
7.3 On-Portal Advertising Revenues   
Table 7.7 Average On-Portal Advertising Cost Per Clickthrough (CPC) Rates ($) Split by 8 Key Regions 2008-2014   
Figure 7.5: Total Advertising Expenditure ($m) on On-Portal Advertising Split by 8 Key Regions 2008-2014
Table 7.8: Total Advertising Expenditure ($m) on On-Portal Advertising Split by 8 Key Regions 2008-2014   

8. Mobile Internet Advertising Forecasts

8.1 Recipients of Mobile Internet Advertising   
Table 8.1: Percentage of Subscribers Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014   
Figure 8.1: Number of Subscribers (m) Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014
Table 8.2: Number of Subscribers (m) Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014
8.2 Mobile Internet Advertising Views   
Table 8.3: Number of Mobile Internet Ad Impressions per User Per Annum Split by 8 Key Regions 2008 - 2014
Figure 8.2: Total Number of Mobile Internet Ad Impressions (m) Split by 8 Key Regions 2008 - 2014   
Table 8.4: Total Number of Mobile Internet Ad Impressions (m) Split by 8 Key Regions 2008 - 2014   
8.3 Mobile Internet Advertising Revenues   
Table 8.5: Average Mobile Internet Advertising Cost Per Mille (CPM) Rates Split by 8 Key Regions 2008-2014
Figure 8.3: Total Advertising Expenditure ($m) on Mobile Internet Advertising Split by 8 Key Regions 2008-2014   
Table 8.6: Total Advertising Expenditure ($m) on Mobile Internet Advertising Split by 8 Key Regions 2008-2014   

9. Idle Screen Advertising Forecasts

9.1 Recipients of Idle-Screen Advertising   
Table 9.1: Percentage of Subscribers Who Receive Idle Screen Advertising Split by 8 Key Regions 2008 - 2014
Figure 9.1: Number of Subscribers Who Receive Idle-Screen Advertising Split by 8 Key Regions 2008 - 2014
Table 9.2: Number of Subscribers (m) Who Receive Idle Screen Advertising Split by 8 Key Regions 2008 - 2014   
9.2 Idle Screen Advertising Responses   
Table 9.3: Percentage of Mobile Subscribers Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2013 (%)   
Figure 9.2: Number of Mobile Subscribers (m) Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Table 9.4; Number of Mobile Subscribers (m) Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2014   
Figure 9.3: Average Number of User Responses Per Annum to Idle Screen Advertising Split by 8 Key Regions 2008-2013   
Table 9.5: Average Number of User Responses Per Annum to Idle Screen Advertising Split by 8 Key Regions 2008-2013   
Figure 9.4: Total Number of User Responses Per Annum (m) to Idle Screen Advertising Split by 8 Key Regions 2008-2014   
Table 9.6: Total Number of User Responses Per Annum (m) to Idle Screen Advertising Split by 8 Key Regions 2008-2014   
9.3 Idle Screen Advertising Revenues   
Table 9.7: Average Idle Screen Advertising Cost Per Clickthrough (CPC) Rates Split by 8 Key Regions 2008-2014   
Figure 9.5: Total Advertising Expenditure ($m) on Idle Screen Advertising Split by 8 Key Regions 2008-2014
Table 9.8: Total Advertising Expenditure ($m) on Idle Screen Advertising Split by 8 Key Regions 2008-2014   

10. Mobile TV Advertising Forecasts

10.1 Broadcast Mobile TV Advertising Forecasts   
Figure 10.1: Number of Mobile Broadcast TV Subscribers (m) Split by 8 Key Regions 2008-2014   
Table 10.1: Number of Mobile Broadcast TV Subscribers (m) Split by 8 Key Regions 2008-2014   
Table 10.2: Adspend ($) per Mobile Broadcast TV Subscriber per annum Split by 8 Key Regions 2008 - 2014
Figure 10.2: Total Advertising Expenditure ($m) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014
Table 10.3: Total Advertising Expenditure ($m) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014   
10.2 Streamed Mobile TV Advertising Forecasts   
Figure 10.3: Number of Mobile Streamed TV Subscribers (m) Split by 8 Key Regions 2008-2014   
Table 10.4: Number of Mobile Streamed TV Subscribers (m) Split by 8 Key Regions 2008-2013   
Table 10.5: Adspend ($) per Mobile Streamed TV Subscriber per annum Split by 8 Key Regions 2008 - 2014
Figure 10.4: Total Advertising Expenditure ($m) on Mobile Streamed TV Split by 8 Key Regions 2008-2014
Table 10.6: Total Advertising Expenditure ($) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014   
10.3 Total Mobile TV Advertising Forecasts   
Figure 10.5: Total Advertising Expenditure ($m) on Mobile TV Split by 8 Key Regions 2008-2014   
Table 10.7: Total Advertising Expenditure ($m) on Mobile TV Split by 8 Key Regions, 2008-2014   

11. The Mobile Advertising Value Web

11.1 Typical Mobile Advertising Value Web   
Figure 11.1: Mobile Advertising Value Web   
11.2 Brands   
11.3 Mobile Advertising Agencies/Campaign Management   
11.3.1  4th Screen Advertising   
Figure 11.2 MPression screen shot   
11.3.2 Buongiorno Marketing Services   
11.3.3 Nokia Interactive Advertising   
11.4 The Search Engines   
11.4.1 Google   
Table 11.1 Google Revenue and Net Income Growth 2003-2008 ($ m)   
i. Technology & Products   
ii. Google Mobile   
11.4.2 Yahoo!   
Table 11.2 Yahoo! Revenue ($m) and Net Income Growth 2003-2008   
i. Yahoo! Mobile   
11.4.3 JumpTap   
i. Products and Services   
ii.  Strategic Partnerships   
iii. Commercial Deployments   
11.4.4 mInfo   
11.5 Mobile Advertising Networks   
11.5.1 Ad Infuse   
11.5.2 AdMob   
i. Products and Services   
Figure 11.2:  Share of AdMob Ad Requests by Geography, March 2009 (7.6bn impressions)   
ii. iPhone & Android   
11.5.3 Greystripe   
11.5.4 IMImobile   
Figure 11.4: DaVinci System Architecture   
Figure 11.5: Ad-Ring Architecture   
11.5.5 Madhouse   
11.5.6 Mobile Content Networks (MCN)   
11.5.7 MobVision   
11.5.8 Quattro Wireless   
Figure 11.6: Quattro Wireless GetMobile Platform Architecture   
11.5.9 Third Screen Media   
11.6 Applications Providers   
11.6.1 Amobee   
11.6.2 Celltick   
11.6.3 Flytxt Neon   
11.6.4 innerActive Smart Media   
Figure 11.7: In Game Advertising Using innerActive Solution   
Figure 11.8: Instant Messaging Product Placement using innerActive Solution   
11.6.5 Mobixell   
11.6.6 Rhythm New Media   
11.6.7 Smaato   
11.6.8 Wapple   
11.7 MVNOs   
11.7.1 Blyk   
i. Corporate Strategy   
11.7.2 Virgin Mobile   
11.8 Network Operators   
11.8.1 Vodafone   
11.8.2  3 UK

12. Regulation

12.1 National Regulation   
12.1.1 National Legislation Pertaining to Mobile Services/Mobile Advertising   
i. PhonepayPlus   
12.2 Pan-European Legislation   
12.2.1 Directive 95/46/EC: Processing Personal Data and the Protection of Privacy   
12.2.2 The E-Commerce Sector Data Protection Directive (2002/58/EC)   
12.2.3 The Data Retention Directive (2006/24/EC)   
12.2.4 The Distance Selling Directive (97/7/EC)   
12.2.5 The E-money Directive   
12.2.6 National Implementation of EU Directives   
12.3 Mobile Content Self Regulation   
12.3.1 UK   
12.3.2 US   
12.3.3 South Africa   
12.4 Advertising Self Regulation   
12.4.1 North America   
i. Advertising Standards Canada   
12.4.2 Western Europe   
i. Advertising Standards Authority (UK)   
12.4.3 Eastern Europe   
i. Romanian Advertising Council   
12.4.4 Indian Sub Continent   
12.4.5 Rest of Asia Pacific   
12.4.6 Middle East and Africa   
i. Advertising Standards Authority of South Africa (ASA)   
12.4.7 International   
i. European Advertising Standards Alliance (EASA)   
12.4.8 Mobile Advertising Self Regulation   
i. Mobile Marketing Association (MMA)   

Companies Referenced

3 UK, 4th Screen Advertising, Ad Infuse, AdMob, AIS, Amobee, Apple, Blyk, BMW, Buongiorno, BuzzCity, Celltick, Coca Cola, Dairy Queen, Flytxt Neon, Gingersoft Media, Google, Gorilla Recruitment, Greystripe, IMImobile, innerActive, Intel, Jeep, JumpTap, Land Rover, Madhouse, mInfo, Mobile Content Networks, Mobixell, MobVision, MobiTV, Mocospace, Molson Coors Brewers, Nivea, Nokia, Orange, Penguin Qualcomm, Quattro Wireless, Quickplay Media, Rhythm New Media, Smaato, Shazam, Swisscom, T-Mobile, Telefonica, Tesco Mobile, Third Screen Media, Unilever, Velti, Virgin Mobile, Vodafone, Wapple, Yahoo!