Mobile Advertising: Delivery Channels, Business Models & Forecasts 2009-2014

Published by: Juniper Research Limited

Published: Jun. 1, 2009

Table of Contents

Table of Contents

Glossary

Executive Summary

Introduction

Mobile Advertising Channels

SMS Advertising

P2P Messaging Advertising

MMS Advertising

In-Content Download Advertising

On-Portal Advertising

Mobile Internet Advertising

Idle Screen Advertising

Mobile TV and Video Advertising

The Market for Mobile Advertising

Figure ES1: Global Mobile Advertising AdSpend ($m) Estimates and Forecasts 1st Edition vs. 2nd Edition 2009-2014

Table ES1: Global Mobile Advertising AdSpend ($m) Estimates and Forecasts 1st Edition vs. 2nd Edition 2007 - 2014

Figure ES2: Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014

Table ES2: Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014

Figure ES3: Total Mobile Adspend ($m) Split By 8 Channels 2008-2014

Table ES3: Total Mobile Adspend ($m) Split by 8 Channels 2008-2014

Strategic Recommendations

Brands and Agencies

Operators

Publishers and Developers

1. The Opportunity for Mobile Advertising

1.1 Introduction

1.2 Mobile as a Mass Medium

1.3 Types of Advertising

1.4 Mobile Advertising Channels

1.4.1 SMS Advertising

i. Types of Messaging Services

a. Mobile-originated SMS

b. Mobile-terminated SMS

ii. SMS Advertising Campaigns

a. Flytxt: SMS Pioneer

b. The Development of SMS-based Campaigns: Blyk, Gorilla Recruitment and Penguin Books

c. SMS ad Campaigns: Penguin - November 2007

d. SMS ad Campaigns: P2P Advertising vs. A2P Advertising: Orange - August 2008

Figure 1.1: P2P SMS On-Net Traffic Interception

1.4.2 MMS Advertising

i. MMS Services

ii. MMS as an Advertising Channel

a. MMS Response Mechanisms

- Message-Based Responses

- Call Based Response

- WAP Landing Page Based Response

iii. MMS Campaign: BMW - November 2007

Figure 1.2: BMW MMS Campaign Screenshot

1.4.3 In-Content Download Advertising

i. In Game Advertising Campaign: Jeep - March-April 2008

Figure 1.3: Engagement Campaign Screenshots for Jeep, Screenshots

ii. App Store Advertising Campaign: Carling - July 2008

Figure 1.4: The Carling iPint

1.4.4 On-Portal Advertising

i. Banner Advertising

a. Case Study: Tesco Mobile - April 2008

b. Banner Standardisation - MMA Guidelines

ii. Mobile On-Portal Search

a. Case Study: Intel Mobile Scavenger Hunt - December 2008

Figure 1.5: Madhouse Campaign Strategy & Screenshots

1.4.5 Mobile Internet Advertising

1.4.6 Idle Screen Advertising

i. Idle Screen Campaign: Dairy Queen - March 2009

ii. Idle Screen Campaign: Coca Cola - February 2009

1.4.7 Mobile TV and Video Advertising

i. Mobile TV Advertising Campaigns: MobiTV and Saw III - January 2007

1.5 Cost Models

1.5.1 Pricing

Table 1.1: Amobee Ad Pricing (West Europe & North America)

1.6 The Evolution of a Mobile Advertising Market

Figure 1.6: Mobile Advertising Market Evolution

2. Drivers and Constraints

2.1 Key Drivers of Mobile Advertising Services

2.1.1 Audiences for Traditional Media Are Diminishing

Table 2.1: UK Adspend, % Change by Medium 2008 vs. 2007

2.1.2 Brands Are Increasingly Pursuing Below The Line Strategies

2.1.3 Personal Nature of Mobile

2.1.4 Increasing Mobile and 3G Penetration

Table 2.2: Relative Reach of UK Media 2008

2.1.5 The Rise of the App Store

2.1.6 Improvements in Handsets

2.1.7 Opt-In

2.1.8 Frequency Capping

2.1.9 Advanced Targeting

2.1.10 Response Rates

2.1.11 Instant Measurement

2.1.12 Value for Money

2.1.13 The Walls Are Coming Down

2.1.14 The Growth of Mobile Social Networking and Web 2.0

2.1.15 Incremental Associated Revenues

2.2 Constraints on Mobile Advertising Growth

2.2.1 Privacy

2.2.2 Low Fill Rates

2.2.3 Handset Dimensions

2.2.4 Connectivity

2.2.5 Cost of Data Services

Figure 2.1: Exponential Growth in Data as Prices Fall

2.2.6 Reach/Visibility

2.2.7 Need for Converged/Planned Campaigns

2.2.8 Relevance

2.2.9 Lack of Inventory

2.2.10 Reduction in Perceived Value of Content

2.2.11 Advertising Overload

2.2.12 Spam

3. The Market for Mobile Advertising

3.1 Forecast Definitions and Methodology

3.1.1 Forecast Definitions

3.1.2 Forecast Methodology

i. Method 1 - Cost per Click-through Based Model

Figure 3.1: Forecast Methodology, Cost per Click-through Based Model

ii. Method 2 - Cost per mille Based Model.

Figure 3.2: Forecast Methodology, Cost per mille Based Model

i. Method 3 - MMS Delivery Costs

ii. Method 4 - Assumed Value Per TV Viewer

3.2 Growth of the Cellular Market

3.2.1 Global Cellular Subscriber Market Forecasts

Figure 3.3: Cellular Subscriber Growth (m) Split by 8 Key Regions, 2007-2014

Table 3.1: Cellular Subscriber Growth (m) Split by 8 Key Regions, 2007-2014

3.3 Mobile Advertising in the Economic Downturn

3.3.1 Expectations for Mobile Advertising

3.4 Regional Mobile Advertising Forecasts

Figure 3.4: Global Mobile Advertising AdSpend ($m) 1st Edition Forecasts vs. 2nd Edition Forecasts 2007-2014

Table 3.2: Global Mobile Advertising AdSpend ($m) 1st Edition Forecasts vs. 2nd Edition Forecasts 2007-2014

Figure 3.5 Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014

Table 3.3: Total Mobile Adspend ($m) Split by 8 Key Regions 2008-2014

3.5 Mobile Advertising Forecasts By Channel

Figure 3.6: Total Mobile Adspend ($m) Split by 8 Channels 2008-2014

Table 3.4: Total Mobile Adspend ($m) Split by 8 Channels 2008-2014

4. SMS and P2P Messaging Advertising Forecasts

4.1 Recipients of SMS Advertising

Table 4.1: Percentage of Subscribers Who Receive SMS Advertising Split by 8 Key Regions 2008- 2014

Figure 4.1: Number of Subscribers (m) Who Receive SMS Advertising Split by 8 Key Regions 2006 - 2014

Table 4.2: Number of Subscribers (m) Who Receive SMS Advertising Split by 8 Key Regions 2008 - 2014

4.2 SMS Advertising Responses

Table 4.3: Percentage of Mobile Subscribers Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Figure 4.2: Number of Mobile Subscribers (m) Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Table 4.4: Number of Mobile Subscribers (m) Receiving SMS Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Figure 4.3: Average Number of User Responses per Annum to SMS Advertising Split by 8 Key Regions 2008-2014

Table 4.5: Average Number of User Responses Per Annum to SMS Advertising Split by 8 Key Regions 2008-2014

Figure 4.4: Total Number of User Responses Per Annum (m) to SMS Advertising Split by 8 Key Regions 2008-2014

Table 4.6: Total Number of User Responses Per Annum (m) to SMS Advertising Split by 8 Key Regions 2008-2014

4.3 SMS Advertising Revenues

Table 4.7: Average SMS Advertising Cost per Clickthrough (CPC) Rates ($) Split by 8 Key Regions 2008-2014

Figure 4.5 Total Advertising Expenditure ($m) on SMS Advertising Split by 8 Key Regions 2008-2014

Table 4.8: Total Advertising Expenditure ($m) on SMS Advertising Split by 8 Key Regions 2008-2014

4.4 P2P Messaging Adspend

Figure 4.6: Total Advertising Expenditure ($m) on P2P Messaging Advertising by 8 Key Regions 2008-2014

Table 4.9: Total Advertising Expenditure ($m) on P2P Messaging Advertising Split by 8 Key Regions 2008-2014

5. MMS Advertising Forecasts

5.1 Recipients of MMS Advertising

Table 5.1: Percentage of Mobile Handsets Able to Receive MMS Advertising Split by 8 Key Regions 2008-2014

Table 5.2: Percentage of 2.5G/3G Subscribers Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014

Figure 5.1: Number of Subscribers (m) Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014

Table 5.3: Number of Subscribers (m) Who Receive MMS Advertising Split by 8 Key Regions 2008 - 2014

5.2 MMS Advertising Revenues

Table 5.4: Average Number of Advertising MMS Received Per User Per Annum Split by 8 Key Regions 2008 - 2014

Figure 5.2: Total Number of MMS Advertisements Sent Split by 8 Key Regions 2008 - 2014

Table 5.5: Total Number of MMS Advertisements Sent (m) Split by 8 Key Regions 2008 - 2014

Table 5.6: Average Cost ($) Per MMS Advertisement Delivered Split by 8 Key Regions 2008-2014

Figure 5.3: Total Advertising Expenditure ($m) on MMS Advertising Split by 8 Key Regions 2008-2014

Table 5.7: Total Advertising Expenditure ($m) on MMS Advertising Split by 8 Key Regions 2008-2014

6. In-Content Download Advertising Forecasts

6.1 Recipients of In-Content Download Advertising

Table 6.1: Percentage of Users Who Receive In-Content Download Advertising Split by 8 Key Regions 2008-2014

Figure 6.1: Number of Subscribers (m) Who Receive In-Content Download Advertising Split by 8 Key Regions 2008 - 2014

Table 6.2: Number of Subscribers (m) Who Receive In-Content Download Advertising Split by 8 Key Regions 2008 - 2014

6.2 In-Content Advertising Download Responses

Figure 6.2: Average Number of Downloads Per User per Annum of Mobile Content Containing Advertising Split by 8 Key Regions 2008-2014

Table 6.3: Average Number of Downloads Per User per Annum of Mobile Content Containing Advertising Split by 8 Key Regions 2008-2014

Figure 6.3: Annual Number of Mobile Content Downloads (m) Containing Advertising Split by 8 Key Regions 2008-2014

Table 6.4: Annual Number of Mobile Content Downloads (m) Containing Advertising Split by 8 Key Regions 2008-2014

Table 6.5: Average Number of Advertisements per Downloaded Content Split by 8 Key Regions 2008-2014

Figure 6.4: Annual Number of Advertisements (m) Viewed within Mobile Content Downloads Split by 8 Key Regions 2008-2014

Table 6.6: Annual Number of Advertisements (m) Viewed within Mobile Content Downloads Split by 8 Key Regions 2008-2014

Table 6.7: Response Rates (%) to In-Content Download Advertising Split by 8 Key Regions 2008 - 2014

Figure 6.5: Total Number of Responses (m) to In-Content Download Advertising Split by 8 Key Regions 2008-2014

Table 6.8: Total Number of Responses (m) to In-Content Download Advertising Split by 8 Key Regions 2008-2014

6.3 In-Content Download Advertising Revenues

Table 6.9: Average In-Content Download Advertising Cost ($) Per Clickthrough (CPC) Rates Split by 8 Key Regions 2008-2014

Figure 6.6: Total Advertising Expenditure ($m) on In-Content Download Advertising Split by 8 Key Regions 2008-2014

Table 6.10 Total Advertising Expenditure ($m) on In-Content Download Advertising Split by 8 Key Regions 2008-2014

7. On-Portal Advertising Forecasts

7.1 Recipients of On-Portal Advertising

Table 7.1: Percentage of Mobile Subscribers Able to Access Operator Portals Split by 8 Key Regions 2008-2014

Figure 7.1: Number of Subscribers (m) Who View On-Portal Advertising Split by 8 Key Regions 2007 - 2014

Table 7.2: Number of Subscribers (m) Who View On-Portal Advertising Split by 8 Key Regions 2008 - 2014

7.2 On-Portal Advertising Responses

Table 7.3: Percentage of Mobile Subscribers Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Figure 7.2: Number of Mobile Subscribers (m) Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Table 7.4: Number of Mobile Subscribers (m) Viewing On-Portal Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Figure 7.3 Average Number of User Responses Per Annum to On-Portal Advertising Split by 8 Key Regions 2008-2014

Table 7.5: Average Number of User Responses Per Annum to On-Portal Advertising Split by 8 Key Regions 2008-2014

Figure 7.4: Total Number of User Responses Per Annum (m) to On-Portal Advertising Split by 8 Key Regions 2008-2014

Table 7.6: Total Number of User Responses Per Annum (m) to On-Portal Advertising Split by 8 Key Regions 2008-2014

7.3 On-Portal Advertising Revenues

Table 7.7 Average On-Portal Advertising Cost Per Clickthrough (CPC) Rates ($) Split by 8 Key Regions 2008-2014

Figure 7.5: Total Advertising Expenditure ($m) on On-Portal Advertising Split by 8 Key Regions 2008-2014

Table 7.8: Total Advertising Expenditure ($m) on On-Portal Advertising Split by 8 Key Regions 2008-2014

8. Mobile Internet Advertising Forecasts

8.1 Recipients of Mobile Internet Advertising

Table 8.1: Percentage of Subscribers Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014

Figure 8.1: Number of Subscribers (m) Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014

Table 8.2: Number of Subscribers (m) Who Browse the Mobile Internet Split by 8 Key Regions 2008 - 2014

8.2 Mobile Internet Advertising Views

Table 8.3: Number of Mobile Internet Ad Impressions per User Per Annum Split by 8 Key Regions 2008 - 2014

Figure 8.2: Total Number of Mobile Internet Ad Impressions (m) Split by 8 Key Regions 2008 - 2014

Table 8.4: Total Number of Mobile Internet Ad Impressions (m) Split by 8 Key Regions 2008 - 2014

8.3 Mobile Internet Advertising Revenues

Table 8.5: Average Mobile Internet Advertising Cost Per Mille (CPM) Rates Split by 8 Key Regions 2008-2014

Figure 8.3: Total Advertising Expenditure ($m) on Mobile Internet Advertising Split by 8 Key Regions 2008-2014

Table 8.6: Total Advertising Expenditure ($m) on Mobile Internet Advertising Split by 8 Key Regions 2008-2014

9. Idle Screen Advertising Forecasts

9.1 Recipients of Idle-Screen Advertising

Table 9.1: Percentage of Subscribers Who Receive Idle Screen Advertising Split by 8 Key Regions 2008 - 2014

Figure 9.1: Number of Subscribers Who Receive Idle-Screen Advertising Split by 8 Key Regions 2008 - 2014

Table 9.2: Number of Subscribers (m) Who Receive Idle Screen Advertising Split by 8 Key Regions 2008 - 2014

9.2 Idle Screen Advertising Responses

Table 9.3: Percentage of Mobile Subscribers Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2013 (%)

Figure 9.2: Number of Mobile Subscribers (m) Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Table 9.4: Number of Mobile Subscribers (m) Receiving Idle Screen Advertising Who Respond Split by 8 Key Regions 2008 - 2014

Figure 9.3: Average Number of User Responses Per Annum to Idle Screen Advertising Split by 8 Key Regions 2008-2014

Table 9.5: Average Number of User Responses Per Annum to Idle Screen Advertising Split by 8 Key Regions 2008-2014

Figure 9.4: Total Number of User Responses Per Annum (m) to Idle Screen Advertising Split by 8 Key Regions 2008-2014

Table 9.6: Total Number of User Responses Per Annum (m) to Idle Screen Advertising Split by 8 Key Regions 2008-2014

9.3 Idle Screen Advertising Revenues

Table 9.7: Average Idle Screen Advertising Cost Per Clickthrough (CPC) Rates Split by 8 Key Regions 2008-2014

Figure 9.5: Total Advertising Expenditure ($m) on Idle Screen Advertising Split by 8 Key Regions 2008-2014

Table 9.8: Total Advertising Expenditure ($m) on Idle Screen Advertising Split by 8 Key Regions 2008-2014

10. Mobile TV Advertising Forecasts

10.1 Broadcast Mobile TV Advertising Forecasts

Figure 10.1: Number of Mobile Broadcast TV Subscribers (m) Split by 8 Key Regions 2008-2014

Table 10.1: Number of Mobile Broadcast TV Subscribers (m) Split by 8 Key Regions 2008-2014

Table 10.2: Adspend ($) per Mobile Broadcast TV Subscriber per annum Split by 8 Key Regions 2008 - 2014

Figure 10.2: Total Advertising Expenditure ($m) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014

Table 10.3: Total Advertising Expenditure ($m) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014

10.2 Streamed Mobile TV Advertising Forecasts

Figure 10.3: Number of Mobile Streamed TV Subscribers (m) Split by 8 Key Regions 2008-2014

Table 10.4: Number of Mobile Streamed TV Subscribers (m) Split by 8 Key Regions 2008-2014

Table 10.5: Adspend ($) per Mobile Streamed TV Subscriber per annum Split by 8 Key Regions 2008 - 2014

Figure 10.4: Total Advertising Expenditure ($m) on Mobile Streamed TV Split by 8 Key Regions 2008-2014

Table 10.6: Total Advertising Expenditure ($) on Mobile Broadcast TV Split by 8 Key Regions 2008-2014

10.3 Total Mobile TV Advertising Forecasts

Figure 10.5: Total Advertising Expenditure ($m) on Mobile TV Split by 8 Key Regions 2008-2014

Table 10.7: Total Advertising Expenditure ($m) on Mobile TV Split by 8 Key Regions, 2008-2014

11. The Mobile Advertising Value Web

11.1 Typical Mobile Advertising Value Web

Figure 11.1: Mobile Advertising Value Web

11.2 Brands

11.3 Mobile Advertising Agencies/Campaign Management

11.3.1 4th Screen Advertising

Figure 11.2 MPression screen shot

11.3.2 Buongiorno Marketing Services

11.3.3 Nokia Interactive Advertising

11.4 The Search Engines

11.4.1 Google

Table 11.1 Google Revenue and Net Income Growth 2003-2008 ($ m)

i. Technology & Products

ii. Google Mobile

11.4.2 Yahoo!

Table 11.2 Yahoo! Revenue ($m) and Net Income Growth 2003-2008

i. Yahoo! Mobile

11.4.3 JumpTap

i. Products and Services

ii. Strategic Partnerships

iii. Commercial Deployments

11.4.4 mInfo

11.5 Mobile Advertising Networks

11.5.1 Ad Infuse

11.5.2 AdMob

i. Products and Services

Figure 11.2: Share of AdMob Ad Requests by Geography, March 2009 (7.6bn impressions)

ii. iPhone & Android

11.5.3 Greystripe

11.5.4 IMImobile

Figure 11.4: DaVinci System Architecture

Figure 11.5: Ad-Ring Architecture

11.5.5 Madhouse

11.5.6 Mobile Content Networks (MCN)

11.5.7 MobVision

11.5.8 Quattro Wireless

Figure 11.6: Quattro Wireless GetMobile Platform Architecture

11.5.9 Third Screen Media

11.6 Applications Providers

11.6.1 Amobee

11.6.2 Celltick

11.6.3 Flytxt Neon

11.6.4 innerActive Smart Media

Figure 11.7: In Game Advertising Using innerActive Solution

Figure 11.8: Instant Messaging Product Placement using innerActive Solution

11.6.5 Mobixell

11.6.6 Rhythm New Media

11.6.7 Smaato

11.6.8 Wapple

11.7 MVNOs

11.7.1 Blyk

i. Corporate Strategy

11.7.2 Virgin Mobile

11.8 Network Operators

11.8.1 Vodafone

11.8.2 3 UK

12. Regulation

12.1 National Regulation

12.1.1 National Legislation Pertaining to Mobile Services/Mobile Advertising

i. PhonepayPlus

12.2 Pan-European Legislation

12.2.1 Directive 95/46/EC: Processing Personal Data and the Protection of Privacy

12.2.2 The E-Commerce Sector Data Protection Directive (2002/58/EC)

12.2.3 The Data Retention Directive (2006/24/EC)

12.2.4 The Distance Selling Directive (97/7/EC)

12.2.5 The E-money Directive

12.2.6 National Implementation of EU Directives

12.3 Mobile Content Self Regulation

12.3.1 UK

12.3.2 US

12.3.3 South Africa

12.4 Advertising Self Regulation

12.4.1 North America

i. Advertising Standards Canada

12.4.2 Western Europe

i. Advertising Standards Authority (UK)

12.4.3 Eastern Europe

i. Romanian Advertising Council

12.4.4 Indian Sub Continent

12.4.5 Rest of Asia Pacific

12.4.6 Middle East and Africa

i. Advertising Standards Authority of South Africa (ASA)

12.4.7 International

i. European Advertising Standards Alliance (EASA)

12.4.8 Mobile Advertising Self Regulation

i. Mobile Marketing Association (MMA)

Abstract

This report provides in-depth analysis and market forecasts for the mobile advertising sector in the context of the global economic recession, and discusses how advertising spend is increasingly moving towards ‘below the line’ activities such as mobile phone ads - offering unparalleled opportunity for consumer engagement.

Key forecasts include the number of users who receive advertising on their mobiles, both by region and by delivery channel (SMS, MMS, Mobile Internet, On-portal, In content downloads, Idle screen, P2P and Mobile TV). Other forecasts include cost per clickthrough (CPC) and cost per mille (CPM) rates and the number of users who respond to mobile advertising. The number of responses per annum and total adspend per channel are also forecast.

The report also analyses key drivers and contraints such as the personal nature of the mobile, enabling targeted and potentially more effective campaigns, and mobile’s perceived lack of reach due to low access rates of rich media content and services.

Key Questions Addressed by this Report:

• How has the global recession impacted on the mobile advertising market?
• What will be the key mobile distribution channels for brand advertising in five years’ time?
• Who are the major players in the mobile advertising ecosystem?
• How have brands utilised mobile channels within integrated multimedia campaigns?
• Will mobile advertising be viable as a primary revenue stream for content providers?
• What strategies should brands, agencies and network operator employ to derive optimal success from mobile advertising?

Key Benefits:

• A unique source of combined research and analysis for the mobile advertising market including technologies, market characteristics and forecasts.
• Practical analysis of the emerging opportunities for vendors and operators.
• Unique insights: includes interviews of leading players with significant experience of the mobile advertising market.
• Benefit from fresh thinking and intelligent market assessment.

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