December 7, 2006 - “ Mobile Entertainment to Reach $77 Billion,” Mike Sachoff, WebProNews

• Currently for 2006, the mobile market is worth $17 billion and is projected to reach $47 billion by 2009.
  
• The biggest players in the global mobile market will be the Asia Pacific and European regions. Asia Pacific will account for 37 percent of the market revenue while Europe will be a close second with 35 percent during the period from 2006 to 2011.
  
• Mobile music accounts for the largest portion of the market. 80 percent of the revenue for mobile music comes from ringtones. The second biggest category is infotainment that covers a variety of topics.

• Record companies and radio stations use text messaging as a promotional tool.

• Once considered a service used only by in Europe and Asia, text messaging is emerging as an important form of communication in the U.S., with 40% of the nation’s 220 million mobile phone users sending text messages regularly, according to research from NPD Group.

• By comparison, about 21% of U.S. subscribers have downloaded a ringtone, while about 9% have downloaded a mobile game.

• According to CTIA- The Wireless Assn., the U.S. subscribers sent close to 65 billion text messages through the first half of this year. That’s about double sent in the first half of 2005.

• Record labels have latched onto this trend to sell ringtones and other mobile content directly to fans, rather than relying solely on wireless operations to generate sales.

• According to October figures from mobile traffic measurement from M:Metrics, 7% of the U.S. mobile subscriber based has used text messaging to respond to ads. Compared with Spain the United Kingdom, which boasts a 29% and 18.5% response rate respectively, that number may seem low. But it’s on par with the 10% reported in France and actually beats the 3.5% reported in Germany.

• “It’s a huge priority for us because kids are moving off of e-mail onto text messaging and instant messaging,” Atlantic’s Allnot says. “It basically has a 100% open rate.

• “This is probably the first promotion we ever ran where we didn’t lose money on prizing, advertising and things like that,” says Sean Rosenberg, director of mobile marketing at RCA Music Group.

• QR, or quick response, codes are similar to bar codes except they are square, look a bit like an ink blot and contain much more information. In Japan and South Korea, QR codes are used to link directly to a Web site, as in the case of the subway poster, saving the user the need to type an address on the tiny keypad of the phone. As marketers seek an edge on competitors, QR codes are appearing practically everywhere in Japan.

• QR codes are now popping up on Japanese business cards, allowing somebody to snap a picture with a cellphone and save the bother of entering a new contact’s information. Last month, McDonald’s began putting the codes directly on food packaging so that Japanese diners could get nutrition information instantly.

• “The power of QR is that it is easy to use and potentially turn anything into a direct connection between advertiser and client,” and Kentt Wertime, president for the Asian operations in Bangkok of OgilvyOne, a digital and direct marketing agency.

• While QR codes have had success in Japan and South Korea, they have not made the leap to the rest of Asia, Europe and North America. MobileTag, developed by the French company Abaxia, and ShotCode, created by a Swedish-Dutch start-up called OP3, are similar to QR codes and could bee the early favorites to grab market share outside Asia, should the technology catch on.

• The number of “digital signs” on which Canadian marketers can advertise just got a whole lot bigger. With partnership of Artisan Live, North America’s premier full-service digital sign developer and MyThum Interactive, Canada’s leading mobile media company, advertisers can now interact with consumers over retail and out of home level screens, inviting them to interact via cell phone.

• Advertisers are ready to move ahead with cell phone ads – even if customers are wary of mobile marketing and the industry is till debating how to keep from alienating consumers with unwelcome pitches.

• “Advertising has dominated the first two screens, television and the Internet. It’s natural that the next screen of advertising monetization is going to be the mobile screen,” said Craig Hagopian, co-chief executive and president of V-Enable, the San Diego maker of a voice-activated directory assistance service for cell phones to be available early next year,

• In 2007, cell phone ad revenue is expected to double to $1.5 billion, according to the Shosteck Group, a market research firm in Silver Spring, Md. Worldwide spending on cell phone advertising could reach more than $11 billion annually by 2011, London-based Informa Telecoms & Media recently predicted.

• Almost 90% of 50 brand-name companies surveyed earlier this year by London-based Airwide Solutions said they will advertise on cell phones by 2008. In five years, more than half of the companies expect to spend 5 percent to 25 percent of their total marketing budgets on cell phone advertising.

• Advertising on cell phones has been around since 2001, but only recently has it gathered steam because of technological advances and advertisers growing disenchanted with the effectiveness of traditional media.

• Legion Interactive has won the “Best in Show” prize at the 2006 “Mobile Marketing & Advertising Awards”. The agency received the award from the Australian Direct Marketing Association for its “Clean Up & Win” campaign, created by Zodiac Pool Cleaners.

• The company also won the “Best Promotional or Marketing Campaign” award and was a finalist in the “Most Creative Mobile Solution” category. It seems that the mobile telephone advertising is no longer perceived as a niche channel for communicating with young people but a mature and universal medium.

• In a positive sign for the mobile marketing industry, marketers are coming to grips with the opportunities presented by the mobile phone and by the personal relationships that people have with their handsets.

• “You’re seeing mobile becoming more and more part of mainstream and in the mix and it’s no longer just the big youth brands who are associating their brands with mobile. Even brands who you wouldn’t have thought about a year ago in terms of mobile advertising or marketing are participating in it today, and Zodiac was a great example of how a brand like that is doing it.

• “In the same way online campaigns are measured using click-through and RIO, advertisers can sometimes forget the good branding impact of an online campaign. I think mobile is now starting to see that, whereas previously it was how many people sent an SMS, etc. Now people are also appreciating the massive branding value of a campaign.”

• Although it’s been around in various guises since 2001, mobile advertising has been limited to ads placed by content providers on their own mobile Web sites. Wireless operators to date have resisted inserting advertising into their own services for fear of alternating subscribers with unwanted messages.

• These same operators, however, are now transforming themselves into media companies akin to TV networks, and as such are turning to mobile advertising as much-needed revenue stream.

• According to research firm Informa Telecoms & Media, advertisers are expected to spend about $871 million worldwide on mobile advertising this year alone. That figure is expected to almost double to $1.5 billion by the end of 2007, and skyrocket to $11.3 billion by the end of 2011.

• One million PalmOne Treos have been sold since its launch in October 2003.

• Mobile advertising can take many forms. There are banner ads that appear on the phone screen while users navigate through Web pages, ads placed during loading times of applications, ads played or streamed before a video begins ads pushed via text messaging to users who opt-in for such content and ads that take the form of an application such as a game.

• According to Mike Baker, CEO of mobile marketing technology from Enpocket, about 70% of today’s mobile advertising takes the form of text messages, with about 25% coming from browser banner ads and 5% from braded mobile application and downloads. By next year, he expects the breakdown to become 60% browser-based banner ads, 25% text messages, 10% video –based advertising and 5% branded applications and downloads.

• It’s one thing to have a mobile marketing campaign – but once it’s up and running, where do you go next?

• LogicaCMG, The next big push in the mobile market is in providing real-time customer segmentation intelligence to marketers, according to strategic sales director Asia-pacific, Lee Dalton.

• The project is being tested in Asian markets before being released in Australia.

• Dalton said Smart Marketing software was one way LogicaCMG was pushing the mobile platform as a legitimate marketing tool. Another method was by its five-year sponsorship of the Mobile Marketing & Advertising (MMA) Awards. The 2006 MMA awards winners will be announced on October 5 in Sydney.

• “Probably the most important medium for advertising in the 21 st Century is going to be the cell phone, not print media, not billboards. It’s just a matter of time – there are just too many of them,” he said. Globally, the number of cell phones n use recently crossed 2.5 billion, an increase of a half billion in just 12 months, according to Wireless Intelligence, a joint venture between the GSM Association industry group and the research firm Ovum.

• It’s also a matter of companies going where consumers are. After all, more than 95 million Americans are considered active text massagers, according to the Yankee Group research firm. And marketers see it as low on cost and high in effectiveness.

• It is just a part of the fast-growing field of mobile marketing, which also extends to other mobile device features such as mobile Web browsing, streaming video and downloads of ringtones, video games and music.

• Consultant Frederick Newell says companies using text messaging should move carefully because of privacy concerns and must get customer’s permission first.

• “ Mobile marketing has the power of e-mail but we’ve learned from the mistakes of e-mail in that the mobile channel is regulated fro beginning in terms of spam,” Mike Romano, the company’s executive vice president of business development.

• In terms of future mobile developments, it is worth nothing that true ‘rich’ media has only really just started to come through online; and that advertiser involvements in ad-funded content on TV is still finding its feet. Ad-funded content, therefore, will not be cracked until it has been fully integrated into other spheres,” argue Ling.

• In an effort to evaluate the effectiveness of mobile marketing in branding for client Lenovo, Ogilvy’s Digital Innovation Group partnered with Third Screen Media in a 4-week program, that achieved breakthrough results among mobile users.

• The program was created to specifically reach Lenovo’s target audience through WAP (Wireless Application Protocol) banners on selected sites on USA Today, CBS Sportsline, GO2 and others.

• Not only did consumers actively engage in the media, but he campaign was successful in building brand awareness for Lenovo as the maker of the ThinkPad brand. Moreover, among consumers who were exposed to the mobile media and visited the WAP destination site, ThinkPad product recall increased b y 74% and 156% respectively.

• The test program ran through the month of June with over 1 million advertising impressions and over 1,300 consumers filled out the research survey.

• Google, Inc. has quietly begun testing AdWords for mobile devices allowing customers to place links in listings retrieved through the search engine’s mobile service in the United States and the United Kingdom.

• Google’s move to AdWords to the mobile phone adds credibility to the space,” Janer said. “There are about 200 million mobile subscribers in the U.S.,” he said. “The figures we see that about 10 to 20 percent are using their data plan to browse the mobile Internet on any given month.

• Mobile advertising might have gained acceptance with Google’s waltz into the space, but challenges remain. Janer said companies are still vetting “a fundamental business mode.” Since carriers like Cingular, Verizon, Sprint and T-Mobile make it easier for subscribers to reach content they will expect a cut in ad revenue.

• Admob, Inc., the world’s leading mobile advertising marketplace, announced that its network now serves 250 million mobile page views per month, and is quickly growing. This is a major milestone for both advertisers and mobile publishers, as the achievement demonstrates that the model that worked so well for the desktop Web is finally gaining traction on mobile devices.

• “Since we launched the AdMob marketplace eight months ago, the growth has been fantastic. With this kind of volume, and with global coverage, mobile advertising and mobile marketing is clearly open for business,” said CEO and Founder Omar Hamoui.

• Prior to AdMob, the only real business models in mobile were based upon subscription, hampering the adoption of a number of services which may have grown explosively if monetized via advertising. Admob was founded with the goal of revolutionalizing mobile through advertising. By enabling advertisers and publishers both small and large to use advertising as a viable business tool, we’re well on the way to achieving that goal,” states Hamoui.

• Kane Johnson is a good example of why advertisers are struggling to get their messages out to young adults. The recent college graduate uses TiVO or a digital video recorder to slip through commercials on TV and he listens to commercial-free satellite radio.

• Russ Laczniak, a professor of marketing at Iowa State University, said myxt.com sounds like an effective way to reach young adults, especially because users can choose the time and context of the messages they receive.

• “The demographic of people in their 20’s has grown up with cell phones and text messaging. This provides one alternative for advertisers who have trouble reaching their age group through traditional media.

• Mobile marketing into the second phase and is no longer just about SMS. Within the next couple of years, most people will be able to – and, more importantly, willing – to surf the web and receive all sorts of rich media and audio content on their phones.

• Nick Wiggins, the head of Mobile Marketing Association, says: ‘The mobile phone will be the red-button technology of the future – it will enable interaction with broadcast media, be that radio, posters or TV. Mobile is the media glue that links different communications solutions together.

• The bigger agencies are definitely ignoring the potential of mobile. Traditionally, these agencies are always slow to pick up on new technology, and when they do it takes them a while to skill up – and there aren’t the fees to interest them as yet,’ Richard Davies, the founder of the independent agency Vexed Digital, says.

• The mobile is a device that consumers won’t leave home without and it is capable of receiving location-based communication that is specific to the user.

• Brands could also use mobile to harness growing popularity of online communities such as MySpace, Bebo and Youtube.