An Insight into U.S. Mobile Advertising and Search Markets

Research Overview

This Frost & Sullivan research service entitled An Insight into U.S. Mobile Advertising and Search Markets provides critical insights into various techniques and technologies employed for mobile content adaptation, and discusses different market trends and expected developments in the mobile space. In this research service, Frost & Sullivan's expert analysts thoroughly examine the following markets: mobile messaging, WAP-based, mobile video, mobile downloadable applications, and mobile search.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Mobile messaging and advertising
• WAP-based mobile advertising
• Mobile video advertising
• Mobile downloadable applications and advertising
• Mobile search and advertising

Technologies

The following technologies are covered in this research:

• SMS and MMS
• Streaming, downloads and multicasting
• Mobile Internet
• Java Platform, Micro Edition (J2ME), Binary Runtime Environment for Wireless (BREW)
• Analytics

Market Overview

High Mobile Penetration Rates a Key Driver of Mobile Advertising in the United States

Constantly increasing mobile penetration rates in the United States is one of the key factors responsible for the growth of the U.S. mobile advertising and search markets. A massive 75 percent of the U.S. population is now mobile, which means that around 230 million people in the country can be reached anytime, anywhere through their cell phones. With subscribers using these phones to access a wide range of voice and data services, the potential for each of these services to become part of the mobile advertising space is immense.

Moreover, mobile advertising can be done through numerous avenues, and companies have the option of delivering their messages in multiple formats such as short messaging service (SMS), multimedia messaging service (MMS), wireless application protocol (WAP), video, downloadable applications, voice, and others. "With such a wealth of delivery options available, advertisers can determine service usage metrics for individual subscribers and group them into various pre-defined segments," remarks the analyst of this research service. "This enables them to target specific advertising messages at particular subscriber groups." For instance, the bulk of sports information on cell phones is accessed through WAP and the people seeking such information primarily fall in the 18 to 34 years age group. In this way, companies can determine usage metrics for other categories as well, such as entertainment, finance, and others, to enable highly focused advertising.

Proven Return on Investment Attracts Increasing Number of Specialized Companies

Initial mobile advertising campaigns conducted by companies were primarily one-time efforts to build their brands and extend reach in the mobile space. However, numerous problems such as a lack of clear-cut objectives, unproven technologies, and inefficiently managed relationships along the value chain caused many companies to shift their focus to cost-saving and productivity applications. This created a temporary setback for the mobile channel as a promotional medium.

This scenario has now changed considerably in the U.S. Mobile networks and handheld devices have become highly sophisticated with advanced capabilities, attracting many more specialized companies that focus on enabling mobile advertising. The appeal of this form of promotion has also increased significantly after companies were able to demonstrate a tangible return on investment (ROI) from these campaigns. Mobile advertising also presents a strong opportunity for mobile operators to increase non-voice revenues, thereby driving their participation in this space.