October 05, 2009

Commentary : When Will Mobile Advertising Overtake the Internet?

Very interesting news out of the UK.

The trade association for digital advertising there, the IAB (
Internet Advertising Bureau) has reported that the UK is the first major economy to spend more on internet ads than on television. According to The Guardian, TV advertising has been the leading ad medium for almost half a century. But it took the internet just 10 years to take the lead.

UK advertisers spent £1.75bn on internet advertising in the first six months of 2009, compared to £1.6bn on TV advertising. Back in 1998, UK advertisers spent just £19.4m on internet ads.

Will mobile be able to overtake the internet in an even shorter period of time?

The IAB notes five key drivers for the success of online ads. Unsurprisingly, these are also key success factors for Mobile albeit with one very important difference:

Spending on mobile internet advertising is not included in the internet advertising statistics from the IAB as they treat mobile as a standalone category.
  1. Ad Networks
  2. Direct Response – consumers can respond to a call to action by making a direct purchase
  3. Advertisers' willingness to experiment and invest
  4. Faster and cheaper access
  5. E-commerce is booming

Well the first four stars are aligned. These factors are helping mobile advertising spending grow every year. However, #5, well . . . ah . . . m-commerce has been limited largely to ringtones and wallpaper sales and fraught with false starts (blush).

So what’s the problem with m-commerce?

Online economies demand efficiency. But the m-commerce landscape is often characterised by the inclusion of a new middleman – the telecom carrier – which takes a cut or inserts roadblocks even before banks and credit card companies come into play.

New applications and technologies like WiFi, WiMax, Google Checkout and Paypal Express Checkout may yet bypass the carrier, but these are not complete solutions.

If mobile advertising is to become the dominant medium, carriers need to make it cheaper -- not more expensive or more difficult -- for merchants to sell services via mobile.