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Mobile advertising to grow exponentially: Experian report

By Experian Marketing Services

The mobile advertising industry, while still in its early stages of development, is expected to grow exponentially over the next five years.

While text messaging (SMS) is the dominant form of mobile advertising today, the adoption of smartphones and the implementation of mobile broadband (3G) networks will play a significant role in how marketers approach the channel.

Key findings
? Smartphone usage is quickly on the rise, with 20 percent of consumers now using their phones for email and 19 percent accessing the Internet on-the-go
? Mobile GPS usage among mobile phone owners skews decidedly younger
? More than one-third of consumers who spend an hour or more online per week rate themselves as being interested in receiving ads via their mobile device, provided there is a tangible incentive

State of the mobile industry
Prior to the introduction of the iPhone in 2007, the vast majority of mobile phones only supported text messaging, which a large number of mobile users continue to utilize.

Catering to the communication preferences of this SMS-savvy audience, mobile marketing programs such as click-to-call, mobile coupons and sponsored news alerts currently dominate most mobile marketing strategies.

An Experian Simmons New Media Study released in April compares the usage of different mobile functions among consumers in the U.S.

While 59 percent of people who have used a cell phone in the past 30 days have text messaged, less than 2 percent have shopped by mobile and less than 5 percent have used mobile GPS -- indicating the relative nascence of both mobile shopping and mobile GPS in terms of becoming ingrained consumer habits.

The emergence of smartphone usage is strongly illustrated by the 20 percent of consumers who used their phones for email and the 19 percent who accessed the Internet.

Takeaway: Mobile advertising, including mobile search, social networks and location-specific services, will become a more viable marketing strategy as consumers continue to adopt smartphone technology.

Trend spotting: The number of mobile handset users in China is expected to rise to 660 million by 2010. It is potentially the biggest 3G mobile market of the world. The United States, Japan, Russia and Brazil's mobile markets are the largest markets behind China.

Mobile GPS
The use of location-specific mobile services and GPS applications, especially those driven by the Google Maps Application Programming Interface (API), and Flickr's geo-tagged photo function, has the potential to increase significantly as new technologies proliferate.

The process of geo-tagging photographs, for example -- which records the location where a photo was taken and overlays it on services like Google Maps to produce an interactive mixture of map and photo data -- can prove highly useful to digital marketers looking to reach mobile-savvy consumers.

Data from the Experian Simmons New Media Study indicates that mobile GPS usage among mobile phone owners skews decidedly younger, although consumers in the 35- to 44-year-old age bracket index slightly above the market average.

Trend spotting: There is a severe drop-off in mobile phone GPS usage for the older age groups, which is expected to remain the case with mobile technologies in general.

Consumer attitudes toward mobile
The utilization of mobile technology, combined with the concurrent expansion of mobile services, creates a powerful new channel through which marketing messages can be delivered effectively to individuals.

In fact, more than one-third of consumers who spend an hour or more online per week rate themselves as being interested in receiving ads via their mobile device, provided there is a tangible incentive.

Takeaway: The most desired incentives are cash, free movie passes, free products and discounts off mobile phone bills.

According to Forrester Research Inc., big brands that have trialed mobile successfully, such as Coca-Cola and Toyota, plan to keep it as a key part of their overall interactive spend in 2009, despite the down economy.

Other marketers, such as retailers looking for a new direct-response vehicle, will respond to growing mobile data usage with trials of message-based promotions and display media on popular mobile content sites.

For example, retail chain Lane Bryant's pilot mobile campaign generated at least 16,000 subscribers in a test period spanning from July 2008 to October 2008. Today, the ongoing promotion of the program is generating more than 1,000 new mobile subscribers every week.

A sample incentive promotion from Lane Bryant would appear as follows:

LB MSG ME! 15% off ur online purchase 7/23 8/5/08. Enter cde XXXXX at chkout. Exclus apply. C site 4 dets. 2 opt out, rply STOPLB or call 8884796514.

Data sourcing
Data included in this section was collected by Experian Simmons and SmartReply from April 2007 to April 2008.

Excerpted with permission from Experian Marketing Services' 2009 Digital Marketer: Benchmark and Trend Report. To download, visit
For more information, please visit the Experian Simmons Web site at or the SmartReply Web site at