Market forces are driving the ascent of mobile marketing

There are three underlying forces driving the growth of mobile advertising – smart phone adoption, increasing consumption of mobile media and effectiveness of smart phones as a marketing channel.

Smart Phone Adoption

Smart phones differ from regular mobile handsets as they allow users to go beyond voice and SMS to access and download media-rich content. This includes mobile applications and mobile search engines and websites. Although the iPhone has around 13.3% of the current smart phone market, the iPhone did act as the impetus for the plethora of similar “smart phones” that have entered the market, and has helped to educate consumers and brands about the opportunities open to them on these hand-held devices.

The adoption of smart phones has been meteoric – a report by Australian telecommunications market research and consultancy group Telsyte1, showed that 3G subscribers grew by almost 60% to make up close to half (46%) of total mobile phone users last year. However, industry experts say the number of mobile phone users in Australia is closer to 22 million, 14 million (63%) of which are internet-enabled.

In September 2009 AIMIA’s (Australian Interactive Media Industry Association) survey findings of 3,710 Australian online consumers found that 63% of those surveyed reported that they had a 3/3.5G mobile handset.

Consumer Mobile Media Consumption

The consumption of mobile media is rising significantly – a recent survey by AdMob, a global mobile advertising platform provider, cited that Australia and Oceania have seen a 400% increase in mobile application traffic between 2008 and 2009 with over half Android and iPhone users spending more than 30 minutes per day using mobile applications.

The AIMIA survey also found that 77% of Australian respondents were using their phone for purposes beyond voice and SMS with approximately half using their mobile to get information and for entertainment purposes. 25% of respondents said they were frequently using their mobile to visit websites and perform mobile searches. Interestingly, 39% of respondents stated that they would accept ads on their mobile phone in exchange for free mobile content or special offers.

Effectiveness of the Mobile Advertising Channel

Smart phones represent a new marketing channel that provides brands and retailers with unprecedented access to consumers. Unique features of this new marketing channel suggest that the mobile channel will become one of the major advertising channels over the next five years. Industry commentators continue to herald the unique benefits of mobile handsets as a new marketing channel.

Robert Thurner, a Director of Incentivated, a US mobile advertising agency said:

“Mobile handsets offer brands the ability to put the consumer at the heart of the communications process. Mobile handsets are the nearest thing to a direct connection into the consumer’s mind anyone is likely to attain in the near future and this makes them a powerful channel to deliver highly targeted and relevant information.”

Mobile phones are ubiquitous and are with us 24/7, at home, at work and when we are on the move making them an instant, real-time response channel for any other media channel… it is the ultimate “me, here and now” medium.

Similarly Marc Barach, the Chief Marketing Officer at Ingenio said:

“The mobile environment lets advertisers reach consumers at the point of decision, and an advertising model that connects the two when intent is at its highest will do for mobile what clicks did for the web. An inherent difference between the mobile and PC environments is that mobile searchers want to find information and then immediately act on it.”

For a number of years industry commentators have waited for the inevitable rise of the mobile advertising market, but high data charges coupled with low consumer awareness has stymied growth. With the advent of the iPhone over a year ago and the falling mobile data rates, the mobile advertising market is burgeoning due to the significant underlying growth factors mentioned above.

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