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Mobile ad spend to skyrocket

$11.35bn by 2011, report says

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Worldwide advertising spend will reach $11.35bn by 2011 on mobile channels alone, according to a new report.

A strategic report released by Informa Telecoms and Media, entitled "Mobile Advertising Services: Generating revenue through subsidised content", predicts the next 12 months will mark the beginning of a sharp upturn in mobile advertising spend. It says this will be aided by the proliferation of cheap, high-quality multimedia handsets and the widespread availability of high-speed mobile networks.

The report forecasts that there will be over 2.1bn mobile subscribers globally by the end of the year, rising to nearly 4bn in 2011.

"Mobile advertising is not new; it's been around in some form since 2001," said Nicky Walton, principal author of the report and senior research analyst with Informa.

"In the last 18 months there have been a number of developments that are encouraging interest in the medium. There are now more users with advanced multimedia handsets and the number of subscribers who connect to mobile broadband via 3G and HSDPA is growing significantly," he said.

Walton said consumer interest in multimedia mobile content, such as mobile TV, was growing, indicated by Virgin announcing plans to launch the first mobile television service in Britain.

The Informa report said greater consumer interest in the technology whetted the appetite of major advertisers. Coca-Cola and car manufacturer Peugeot have experimented with WAP and SMS advertising in recent years. The report forecasts mobile advertising spend to be over $1.5bn in 2007.

The report stated that a survey conducted as part of the research found consumers were open to mobile advertising in some forms, but not via SMS text message. The report stated that customers would be more willing to accept advertising in return for free media and applications on their handsets.

"As operators push for new revenue streams and advertisers search for more immediate, intimate access to consumers - and the technology becomes more effective for advert delivery - we'll see dramatic growth in this space," said Walton.

"With advertising spend on the internet increasing, while more traditional means such as TV and radio are on the decline, advertising agencies are looking for more creative and innovative ways of pushing their clients' brands," said Nick Lane, head of the mobile content and applications research division within Informa.

"The mobile phone represents a direct channel to the consumer, surpassing that of the internet, but will only achieve significant levels of success if it can be seamlessly integrated with existing advertising strategies using traditional media," he added.

Copyright © 2006, ENN

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