Mobile advertising to reach €2.18 billion in Europe by 2012

The European mobile industry has extensively explored the use of advertising recently as a sustainable business model for mobile content, mobile messaging and other services. Despite being in the initial stage, these models have galvanised the industry. The level of confidence of the mobile communications and advertising industries in the potential of mobile advertising is very high.

Analysis from Frost & Sullivan*estimates that the mobile social and content advertising market revenues should reach €2.18 billion in Europe in 2012. Mobile content advertising, ad-based music, video, TV and games will all be sources of revenue.

From the mobile industry's point of view, advertising is a potential revenue stream that can counterbalance the decreasing prices of voice and SMS services.

To achieve high revenues, the mobile advertising industry too needs to do some work. It needs to confront three main challenges:

"¢ continuously improving the user experience through high speed connectivity and better user interfaces;

"¢ use adverts to add value to consumers' mobile experience without being intrusive;

"¢ educate the advertising industry on how to exploit the advertising power of mobile devices.

Advertisers and agencies, the sources of the advertising revenue stream, are only beginning to understand mobile as an advertising medium.

Agencies' budgets rarely include an allocation for mobile communications, but the synergy between the mobile and the advertising industries is crucial to transform enthusiasm into strong revenues.

"¢ Ad-based Content and Communications: A Lucrative Avenue for the Mobile Industry, see http://www.wireless.frost.com

Saverio Romeo, research analyst, Frost & Sullivan

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