December 21, 2006, 12:00 AM

Mobile advertising set for double-digit growth

Spending on advertising delivered via mobile phones this year will reach $1.9 billion worldwide, and is set for double-digit growth, according to a new study from ABI Research.


Spending on advertising delivered via mobile phones today represents a number as small, relatively speaking, as the devices themselves. This year the total will reach $1.9 billion worldwide compared with the $60 billion to $70 billion spent annually on broadcast television advertising in the United States alone, according to new research. But the benefits of mobile advertising are so compelling that the market is set for double-digit growth rates during the next five years, according to a new study from ABI Research.

“Unlike a TV or a PC, a mobile device is truly unique to the user. That allows a more customized relationship with the recipient of an advertisement,” says senior analyst Ken Hyers at ABI, which specializes in multimedia, mobile wireless, emerging technologies and other markets. “Advertisers can obtain a lot of information about users, through the sites they visit and the purchases they make, helping the advertisers construct tightly targeted campaigns.”

What’s more, the typical click-through rate for a regular Internet banner ad is about 0.2%, while the rate for mobile banner ads is in the range of 2% to 3%, Hyers says. “I think that performance will go down over time as the novelty wears off,” he adds, “but for now it represents sensational performance.”

But if advertisers approach the mobile channel with abandon, there could be a backlash, the study says. “Sending customers text message ads, for example, that are either obnoxious due to their frequency, or because people didn’t opt in, or because they are poorly targeted, is counterproductive,” Hyers contends.

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