Mobile phone advertising will account for 5%-to-10% of global media ad spending within five years, said Scott Howe, corporate vice president of the advertiser and publisher solutions group at Microsoft.
“But it won’t happen all at once; it will happen gradually, and will be driven by demand from retailers and emerging markets,” Howe said while in Cannes at the 56th International Advertising Festival.
“Mobile phone advertising is going to be one of the fastest growing segments this year because it is growing out of a small base,” Howe said in an interview with Reuters. “The question is when does it really hit mainstream? That’s probably still a year or more away.”
Charles Johnson, general manager of mobile advertising at Microsoft, told DailyDOOH that mobile advertising is a critical component in Microsoft Advertising’s multi screen strategy and vision, agreeing with Howe’s statement that mobile is predicted to account for 5%-to-10% of global media ad spending within five years.
“With Microsoft Mobile Advertising active in 13 countries, we believe mobile is a key platform in helping advertisers and publishers empower their ‘On the Go’ target audiences with value added knowledge and engage them in the intended awareness or purchase cycle experiences,” said Johnson. “We’re committed to partnering with the carriers and the OEMS to provide these experiences we all want our customers to have today and continue to evolve our platform and services in the coming years.”
Howe said that mobile advertising could attract interest from a niche of advertisers, such as small local retailers which did not routinely embrace the mainstream online advertising. These advertisers could decide to shift their ad budgets away from local newspapers to mobiles for local highly-targeted campaigns.
Emerging economies such as Latin America and Africa, where people were likely to own a mobile phone before a wired PC, are also expected to spur growth.
Microsoft recently launched its Bing search engine in a bid to counter the dominance of Google in the lucrative Internet search sector and its related advertising market. One key feature of Bing is that users search with only one click, making it more mobile phone user-friendly.
However, one hurdle holding back the potential growth of mobile could be the lack of compatibility between 3G phone networks in Europe and in Asia.
Microsoft executives aren’t the only ones who forecast fast growth for mobile. Other executives, who attended Cannes Lions 2009, also had their views.
“If you are interrupted every two minutes by advertising, not many people want that,” Jones said. “The industry needs to work out smart and clever ways to engage people on mobile.”
Martin Sorrell, chief executive of WPP, said that there has to be a common system and the technology has to have enough bandwidth for delivering the message. The LTE or Long Term Evolution standard, if it is widely adopted for new 4G high-speed mobile technology, could be a solution. But 4G is not expected to hit the mainstream until about 2015.
David Kenny, managing partner at VivaKi, the digital arm of Publicis, forecast that social networks such as Facebook, which are becoming increasingly mobile, and applications for the iPhone, would be key drivers.
Ineum Consulting, recently reported that, as more consumers embrace new technologies and devices such as smart phones, mobile advertising is projected to grow at an annual average of 45% to reach $28.8 billion within five years from a current $3.1 billion or 0.6% of spending.