The Big Pitcher

I read a thought provoking blog by Tomi Ahonen recently. He placed the mobile business in the context of several other widely adopted technologies and it struck me that this reinforced the potential for mobile advertising. But first of all, consider some of the “big picture” facts that Tomi highlights;

·   At $135 billion, mobile data services revenues (mainly text messaging but also content), is as big as the total internet content business, and all internet advertising revenues, and all global video gaming revenues, and all Hollywood box office revenues worldwide, and the global music industry – combined.

·   Or try this one. There are about 6.6 billion people in the world. And between us, we have 800m cars and 850m PCs, 1.1 billion of us have internet access, there are 1.3 billion fixed line phones, we have 1.4 billion credit cards, 1.5 billion TV sets … and nearly 3 billion mobile handsets. Given that some people have more than 1 handset, that means about 2.7 billion people have mobiles, or 40% of the world population.

The reach of the mobile already dwarfs all other gadgets and devices in history. And the business is still young and growing rapidly … by about $100bn (16%) a year. Or to get an idea of the growth in another way, the mobile subscriber base in China grows by 6m a month and 7m a month in India …so the monthly new subscribers added in China is the same as the population of the average US state.

At the same time, there’s a big shift happening in the way advertisers set about communicating with their audience. A few years ago, the standard advertising technique was a bit like sitting in a crowded sports hall listening to someone yelling a message at you through a megaphone. Nowadays however the advertiser tends to want to be your friend, leaning-in and speaking quietly in your ear - they remember your name, your birthday, and what you like (and don’t like). It’s a technique that’s custom-built for a personal, private, 2-way medium like mobile. And as Tomi’s numbers highlighted, mobile has the potential to offer advertisers unprecedented scale combined with (potentially) laser-accuracy targeting.

The world of mobile moves fast. For example, text messaging started at the end of 1992 and on News Year Eve 2007 43 billion text messages were sent globally – 6 texts per person on the planet … or 16 texts per mobile subscriber. The mobile is going to become a key advertising medium; the carriers need the additional revenue stream if they are to maintain their growth rates (and cope with falling voice ARPU). There are lots of challenges – not least, cost structure, and technology – but the biggest one is to make sure that consumers welcome the ads, rather than treating them as an unwelcome imposition – and that’s perfectly possible to achieve. The watch-words are “permission-based, easy operation, relevant, bringing a consumer benefit”.