The online mobile space will be hugely important to civil society, communities, and the public. We have concerns about how the mobile marketing “ecosystem,” as its called by the industry, is shaping the new medium to promote a powerful pervasive presence for interactive advertising. It’s a subject this column will increasingly cover, including issues related to consumer privacy and autonomy in the mobile communications era. All the techniques and strategies we see with PC-based broadband online marketing–including the use of behavioral targeting and rich media, for example, have been migrated over to the mobile ad platform. So we think this article from ClickZ entitled “Could This Be the Year for Mobile Ad?” [Kevin Newcomb, 9/11/07] is worth examining. We all know the market will grow dramatically, here in the U.S. and elsewhere. This alone should alert policymakers and public interest advocates to begin better addressing the problems. Newcomb cites a study from the Kelsey Group which says that “the U.S. mobile ad market will grow from $33.2 million in 2007 to $1.4 billion in 2012, a compound annual growth rate (CAGR) of 112 percent.” These forthcoming advertising dollars underscore why Google is so interested in open spectrum; it’s contested marketing territory (Google vs. Microsoft vs. the carriers, etc.).
Here are some telling excerpts from the article, including about Google’s future [my italics]: “One of the biggest drivers of the mobile market will be Google, which needs to find another outlet for its text ads. With the rapid growth of search slowing due to the sheer size of the market, Google will need to look elsewhere to keep investors happy. Mobile ads could be a natural extension of that, since the existing text ad format would also work for mobile, Booth said.
In addition, Google’s advertisers are looking to spend more money with Google, but Google doesn’t have the targeted inventory available for them to spend it on. Analysts estimate that between $1 billion and $2 billion in online ad budgets go unspent, so if Google can offer a way for advertisers to spend that money and get a good ROI, they will spend that much and more, he said.
Google has also made investments in audio ads, both in radio and its Voice Local Search,1- 800-GOOG-411. These ad-sponsored directory assistance (DA) applications are expected to grow from 270 million calls in 2007 to 2.1 billion calls in 2012, a CAGR of 50 percent.
By developing an audio ads platform that it can sell to its existing advertiser base, Google can both break into traditional media markets, like radio, and create inventory in new areas like podcasts and free DA applications, which will be largely a local-mobile space.
Besides Google, Microsoft is expected to make a big push into mobile advertising, in an attempt to beat Google to the punch. Microsoft has been investing heavily in mobile, including the acquisition of TellMe in March, and hopes to extend its adCenter platform to mobile ads as well.”