Mobile advertising is massively overhyped, says analyst firm

The market potential for mobile advertising is becoming a confusing arena. New research data from CCS Insight claims many of the forecasts made about mobile advertising in Europe are hugely inflated, and that advertisers will spend only small amounts over the next few years attempting to communicate with cellphone users.

Just prior to the release of this market data, another study from comScore claimed SMS advertising for consumer goods, such as food and fashion, rose significantly in Europe. comScore stated food was the fastest-growing category of SMS advertising since August 2007, at a rate of 53 per cent, followed by fashion at 38 per cent and restaurants at 37 per cent.

To confuse the matter further, a US-based study maintained mobile advertising awareness grew 33 per cent in the first nine months of this year. The study, commissioned by Limbo, a large mobile social network in the US, claimed four out of 10 Americans with a handset recalled seeing advertising on the device between July and September 2008--making it the first time that the number of US residents being aware of mobile advertising had exceeded 100 million in a 3-month period.

But, according to CCS Insight, by 2010 mobile advertising revenues in Europe will be less than €430 million, a fraction of the billions devoted to advertising budgets annually. "The reality is that no-one's making huge sums from mobile advertising in Europe, and this won't change in the near future," said Paolo Pescatore, a director with CCS Insight.

This perspective was confirmed by Jeremy Miles, chairman of advertising agency Miles Calcraft Briginshaw Duffy, who said mobile advertising holds enormous potential for brands. "But like the Internet revolution before it, mobile needs to emerge from the technology foothills and develop media experiences and advertising solutions that delight and satisfy real consumers' needs and wants. And deliver the numbers."

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