NeoMedia Technologies, Inc (NEOM)

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DD Sizing Up Mobile Advertising

http://www.emarketer.com/Article.aspx?1003897 (click on the link to see the graphs shown in the article)

MARCH 29, 2006

Little screen, big opportunity.

Although advertising on mobile phones is currently minuscule — in budgets as well as size dimensions — if marketers heed the recommendations of a new report from Magna Global, they will begin investigating this emerging channel now.

In fact, in a survey among ad:tech attendees, conducted in December 2005 by, Marketing Sherpa found that experimenting in mobile advertising tied for the top spot with video in a list of tactics advertisers would like to experiment with.



In the same poll, this time asking about actual spending plans, mobile/wireless tied for second place.



"With 2 billion mobile subscribers around the world, 20% annual subscriber growth, new networks capable of distributing video, improving handset capabilities, and rapid turnover of the handsets themselves, mobile phones may become the most pervasive devices able to access video content on a global basis," wrote David Wiser in the introduction to the Magna Global report. "With this footprint, we expect that advertising will ultimately play an important role in the mobile video world. The best opportunities to market to consumers in mobile environments will be through integrated mobile communications devices, and the industry will likely require ad-support to reach the widest possible audience."

The full potential of mobile advertising is still a little way off, primarily because the restricted audience size. However, this will change quickly and eMarketer projects that the number of 3G phone users who watch video worldwide will exceed 500 million by 2009. Even the more specialized audience within this group, those who watch broadcast TV on their phones, will grow to more than 100 million by 2009.



As eMarketer Senior Analyst, John Gauntt, recently wrote, "The challenge for marketers looking at mobile TV for the next two to three years is primarily one of learning about which mobile-native broadcast experiences consumers desire and the degree to which they are willing to accept marketing messages to subsidize or enhance this experience."

eMarketer believes the mobile broadcast video market will exhibit similar adoption and growth trends to those seen in the mobile music market. Mobile music did not take off until players were available that made music sound good, content providers released material that consumers wanted and Apple introduced a business model for digital music that made sense. Mobile TV will follow a similar pattern.

For more on what the future holds, read the new eMarketer report Mobile TV for Marketers: Monetizing the Smallest Screen.

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