Features

Mobile Ads Trials Require Advertisers to Rethink Business Models

By Sophia Mayengbam

The growth in the use of mobile devices presents an opportunity for advertising and marketing. Wireless promises to be an effective and powerful tool for reaching targeted market segments making it the hottest new medium for advertising and marketing. However, Wireless advertising presents both new opportunities and new challenges, which will force both advertisers and wireless providers to fundamentally evolve their business models and practices to succeed.

During the past year, both the U.S. wireless and the consumer brand communities have begun exploring mobile advertising through in-depth focus groups, market trials, and experimentation with different formats. IT research firm IDC believes common themes are emerging from the mobile advertising market trials that, when viewed collectively, highlight the need for wireless service providers and advertisers to revise their business models.

IDC said that the unique nature of wireless devices and wireless usage characteristics creates a number of advertising format opportunities that will prove beneficial to both advertisers and wireless service providers.

The vast amount of customer data available with wireless service providers could be leveraged to create more effective advertising messages that reach customers on an individual level.

IDC said that the another plus point for mobile advertising is it presents a significant new revenue opportunity for wireless service providers who are facing continued erosion of voice service pricing.

Although mobile advertising holds enormous potential for both the wireless and advertising industries, IDC analysts warn that there are a number of key issues involved.

Scott Ellison, IDC’s Wireless and Mobile Communications Groups said that earlier market trials have proven that the mobile advertising environment is completely different from traditional advertising medium. Both advertisers and wireless service have to apply an altogether different strategy for this medium.

"The real impact of mobile advertising will be forcing both advertisers and wireless service providers to substantially alter their highly successful business models to adapt to this very new but very different medium. Without fundamental model adaptation, both communities risk alienating the very customers they serve and strive to reach," said Ellison.

According to Ellison, the new business models will need to adapt to a range of issues, including:

different wireless user tolerances and receptivity to mobile ads,
different mobile advertising formats, sharply compressed ad rotation cycles, and
advertising that relates to individual user characteristics.

Successfully addressing these issues in addition to creating ads that are effective and engaging, yet unobtrusive, will prove to be the ultimate challenge for the two industries. In addition, wireless service providers will be forced to view themselves as media companies instead of as telephone companies.


print	save	email	comment