Mobile advertising represents a new source of revenue for operators, says IDC

LONDON, UK – APRIL 11, 2006 – Advertising is making its way into the mobile industry, following in the footsteps of mobile marketing, according to a recent IDC study. Mobile operators will have to embrace mobile advertising, which is key in their strategies for the coming years.

Mobile advertising does potentially offer a new way to add value to the mobile chain. Operators predominantly rely on customers to generate revenue, and as voice revenues are declining, they are trying to offset this with data, but with adoption taking place at a slower pace, advertising could play an integral part of the revenue mix.

In any case there is an opportunity to monetize content in a way that carriers haven't previously explored, but what is proving to be the biggest headache is how best to introduce adverts over mobile. This is due to the variety of business models, and discovering which one to implement will be a case of trial and error, certainly in the early stages. Whichever one works best will depend on market dynamics and characteristics.

It may also represent an important part of their off-portal strategy and revenue. Off portal is an area that mobile operators are actively seeking to bolster and opening up their portals will facilitate greater opportunities for advertising. They have increasingly opened up their portals and advertising may prove to be another source of revenue. This will naturally complement their on-portal strategy, especially given the introduction of free browsing or flat rate pricing plans. In addition, the operators will be able to offer content sponsored by brands. Content can vary from type of service as well as how it is delivered or the creation of communities such as chat groups.

End users may well accept mobile advertising, provided there is a code that is respected and followed. Users do not want to receive spam but are willing to opt-in provided that ads are targeted, useful, and meaningful to them.

IDC expects to see advertising taking shape in a variety of ways that will be simple but also creative, innovative, and compelling. These will range from banner ads to downloaded clips on their own or part of a sponsored clip.

The study, What Lies in Store for Mobile Advertising (IDC #HW56N, March 2006), assesses the opportunities for mobile advertising in Western Europe.

The document looks at developments in this marketplace and what we can expect to see introduced. It also addresses some opportunities for new companies looking to enter this space.

To purchase this document, please contact your local IDC office or visit

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