opinion


Among the doom and gloom afflicting the advertising world, mobile is fairly resilient

The Association of National Advertisers in the US has released the results of its latest survey of industry members, and it makes for uncomfortable reading.

Seventy-seven percent of those questioned – 141 marketers in the pharmaceutical, financial-services, consumer-package-goods, retail, computer and technology industries – said that they plan to cut their media-advertising budgets. And 71% said that they had already experienced budget cuts over the past six months – a far higher percentage than they had anticipated in August, when they were last questioned. At that time, only 53% said they thought their budgets would be cut in the next six months.

The survey results are not broken down by media type, so it’s not possible to tell how affected mobile will be. But that it will be affected can be in no doubt.

Another gloomy result from the survey is that 72% of respondents plan to reduce their advertising-campaign-production budgets. That could have more serious consequences for mobile, since mobile can be a costly medium for which to develop advertising content.

That can certainly be true of campaigns that make use of the mobile web, when the advertiser doesn’t have a mobile web presence and when landing sites have to be built from scratch. Delivering rich-media ads, such as videos and applications, to mobile phones can also clock up high development costs.

It’s not just a question of creating one site, application or video clip that can serve all mobile users. Because mobile is so technologically fragmented, numerous versions often have to be created to fit the requirements of different handsets and operating systems.

But it’s not all doom and gloom out there.

Ad-funded MVNO Blyk says it has seen a marked increase over the past six months in the number of advertisers – household brands from outside the mobile world, such as Diet Coke – that are coming to Blyk with ready-made mobile sites to which users can click through from their phones.

Granted, these advertisers are probably not representative of the corporate world as a whole. To advertise through a medium as new and unproven as an ad-funded MVNO, they – or the advertising agencies representing them – must be risk-taking and experimental in their approach. But it at least shows that despite the technical barriers and the adverse economic climate, there are companies out there that are investing in mobile as a marketing vehicle.

And there is logic to it, if Blyk’s claims are to be believed. The firm says the ads it pushes to its subscribers on behalf of advertisers consistently attract response rates of 25% or over. The downside, of course, is that advertisers can reach an audience of only about 200,000 – albeit highly targeted – users, and only in the UK.

The choice that marketing managers have these days is whether to spend the fewer advertising dollars they have to play with on tried-and-tested mass-market media, where response rates tend to be tiny, or on the more fragmented but supposedly more targeted medium of mobile.

Looking at the latest metrics from AdMob, which runs the world’s biggest advertising network on mobile, there is little evidence of a squeeze on mobile advertising spending – quite the contrary.

The company reports that it saw a 9% month-on-month rise in December in the number of ads it delivers globally to mobile phones. And the month’s figure was staggering: 6.3 billion. Interestingly, the biggest month-on-month increase – 20% – was in North America, where the pessimistic ANA survey results came from.

Meanwhile, mobile community creator BuzzCity reported a 50% year-on-year rise in paid banner ads sold on its US sites in 4Q08.

AdMob is at the mass-market end of web-based mobile advertising. Its main job is to find space on mobile sites for banner ads. It has also started dabbling in the delivery of ads to mobile applications.

Although what it does is not that targeted, it more than compensates for that in terms of scale. It is able to deliver ads to more than 6,000 mobile sites around the world. And at a time when funding is becoming a scarce commodity, AdMob has just raised US$28.2 million in series C venture-capital funding.

It’s not a good time to be running an advertising-based business. But mobile is an emerging medium that is only now beginning to take off as a bearer of content and applications, so it has more potential to beat the current downward trend than most other media.


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