The jury is still out on whether U.S. consumers will actually accept mobile advertising to subsidize their mobile content or service experiences (as the lively debate at MoCo, following this post, demonstrates). However, this report from market research firm eMarketer (released yesterday) predicts a rosy outlook for mobile marketing and advertising when the pieces do fall into place. It forecasts mobile ad spending in the U.S. will grow to US$4.8 billion in 2011 from US$421 million in 2006 (a jump from 2.6 percent to 12 percent of overall U.S. ad dollars). A key factor helping to drive this growth is the slow and steady transition over the next years to an ad-funded model to lower the cost of mobile content and fuel its take-up.
This year, eMarketer reckons mobile advertising will more than double to US$878 million. By 2010, eMarketer expects mobile marketing, and content tied to broadcast TV, to reach nearly $1 billion. A high rate of click-throughs and conversions contributes to this increase. This article (which had access to the report and its authors) points out that high response rates also translate into high CPMs--US$41 for mobile display ads in 2006. By 2011, CPMs are likely to hover around US$23.
But brands will have to do “heavy lifting” before mobile advertising can reach its potential and tackle issues including handsets, present consumer attitudes and the fact that it is “impossible for a brand to make a cross-carrier media buy,” the article said.