Telecom analyst firm Berg Insight has pinpointed five key trends it believes will come to pass in the mobile advertising market, including that ad-funded business models will become a new paradigm in the discount-mobile, virtual network operator segment.
In a report out today, the analysts said price-sensitive young consumers with low incomes will be most inclined to accept ads in exchange for voice minutes or text messages.
Smart phones will boost traditional internet advertising revenues, they predict. A significant proportion of mobile advertising revenues will actually derive from mobile internet users accessing conventional websites. Internet advertisers are going to need to adapt by creating campaigns that work with multiple devices and display sizes.
The third prediction is that idle screen will eventually become the largest mobile advertising channel. Virtually all consumers carry a mobile handset wherever they go and check out things on the display many times a day. Berg Insight reckons embedded advertising on the idle screen and in the user interface would provide an unmatched exposure.
The analysts aren’t too pessimistic about the economic downturn. Their fourth prediction is that it will hold back revenue growth but not innovation. New unproven channels such as mobile media will see a negative effect from cutbacks in marketing budgets. However, they forecast there is still going to be much innovation in the mobile space, which will create new channels for advertisers to reach out to consumers.
Size will matter in the race for market leadership, is Berg’s final prediction. Financial strength will be especially important if the market develops more slowly than previously anticipated. Existing digital and mobile industry players will have a major advantage over venture capital-funded start-ups, many of which will have difficulties finding financing, the analysts said.
By Sorcha Corcoran