New Game: Mobile Ads

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Mobile advertising is a fast emerging market.

According to Mobile Marketing Association research trends, with the advent of new smartphones, tablet PCs, LTE broadband bandwidth, and NFC smartphones are enhancing the daily digital lives. More mobile relevant ad formats are emerging and a dramatic shift in mobile advertising is seen.

In 2010, the iTunes Store popularized its mobile applications, while the Android market was established as the second largest app store.

According to Morgan Stanley report, Android bypassed Apple with a market share of 25% (Apple 17%) and is now the second largest OS behind Symbian (37%).

The growth of mobile as an established media channel will continue the next couple of years. Smaatos key findings show Asia in the lead in mobile advertising. In 2010, Japanese companies invested more than $1 billion, followed by South Korea and China ($270M and $180M respectively). In Asia more than 15 billion page impressions are being generated on a daily basis in mobile.

The US is the second largest market globally in terms of mobile advertising, behind Japan. It will grow up to $5 billion by 2015. The top 5 European countries (UK, Italy, France, Germany, Spain) also witnessed a huge increase in mobile ad spending. End of 2010 they are estimated to have 65 million mobile internet users, which will double in the next 5 years.

Navteq

Nokia Corp. is preparing to fight another way for survivalmobile advertising.

The company is contemplating to join hands with Microsoft Corp to make its flagging Navteq map a force in mobile advertising.

Nokia paid $8.1 billion for Chicago-based Navteq in 2007, with the hope of gaining a foothold in the then-booming market for navigation services.

The deal, however, backfired after Google Inc. and others introduced similar services online for free.

Nokia is now betting that its Microsoft link will help to make a mark in the field.

On Wednesday, Nokia confirmed it would combine its mobile-location and commerce-services business with Navteq into one unit. Chief Executive Stephen Elop, in a statement said “We will provide next generation social-location applications and commerce to differentiate Nokia.”

As a part of the deal Nokia will also get a cut of ad revenues.

The ads could be connected to specific searches made by users.

For example, if a customer searches for a pizza parlor on a smartphone, an ad for a nearby Italian restaurant might appear. Both Microsoft and Nokia hope to take advantage of each other and garner ad business large enough to compete Google Inc and other industry players.

“We think we have distinct advantages through our parent company’s distribution and through this new Microsoft partnership,” Christopher Rothey, vice president of advertising for Navteq, said in a recent interview. “We are looking for ways to place more location-based advertising, and Microsoft is a significant opportunity in that regard.”However, it is too early to comment as both the companies are still in planning stages in terms of revenue sharing.

Nokias mapping unit is the major revenue maker for the company.

Since 2009 Navteq entered the market with a location-based mobile advertising service called LocationPoint. It delivers advertising via icons on Navteq’s maps, mobile applications, and by other methods.

Navteq has already entered several deals to spearhead its network that includes Samsung Electronics Co. and Research in Motion Ltd. It has also signed deal with Poynt Corp and and Telmap Ltd. to make smartphone applications that connect users to local businesses. Navteq also launched its LocationPoint service in China and South Africa. Nokia firmly believes these efforts will continue under its new business unit. Similarly, Nokias mobile advertising click-through rates are higher than the industry average.

The challenge, however, analysts say is that advertisers are interested only when a company presents them with a sizable local audience within a short period of time. This means more phones to serve with ads.

Source : Wall Street Journal, http://mmaglobal.com

 

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