Analysis: Is Telemundo’s IPhone App Deal going to Buoy Mobile Advertising?

The economic and financial crisis that started in 2008 put a damper on advertiser demand for Hispanic mobile advertising and on the financing of some new start ups. Complexity is one of the main drawbacks: There are too many platforms, too many browsers, and too many markup languages to make mobile marketing easily scalable. From an advertiser's point of view, this is a production nightmare.

However, here are 6 points on why we think that the sector could take off.

1.  Smartphone adoption is driving mobile search adoption,so it stands to reason that as the population of smartphones increases so will the local/mobile marketplace. The Smartphone offers a better mobile Internet experience than other devices and interfaces. It makes it possible for the brands to obtain more relevance in their marketing initiatives including reaching new consumers for their products. Only yesterday, Telemundo announced a deal with  mobile media and marketing firm LSN Mobile to launch a series of free, advertiser-supported iPhone applications spotlighting local content from Spanish-language stations across the U.S. Read the release here.

2. Big in General Market.
According to a recent report by researcher Borrell Associates, ad spending on mobile finally broke through the $1 billion barrier in 2009 and could break the $2 billion barrier in 2010. We at Portada think that these estimates are on the “higher side”. They equal 0.75% of overall US advertising expenditures. Extrapolating this ratio to the Hispanic market, we get a total of between $30 to $35 million of Hispanic mobile advertising.

3. 3G and Flat Rate Plans.
3G coverage and the frequent launches of flat-rate plans will certainly improve the prospects of mobile advertising. “There are simultaneous movements influencing the rise in the audience and the content offerings on mobile. “Manufactures like Dell just announced their Smartphone model. We can see a huge number of new devices in the market and this will warm up the competitiveness helping  the prices to fall down and accelerating the audience growth on Internet Mobile”, says Riza Soares,  Terra Latin America and U.S. Ad Network Director.  Terra’s online ad network EZ-Target recently releases a mobile advertising platform.

4.  Clients are trying it out
Retailer 7 – Eleven tried out a mobile campaign recently. Approximately 200 7-Eleven convenience stores in San Diego tested a mobile marketing campaign through Dec. 31, 2009, where consumers sent a text message to receive free beverages, the company reported last week.
During the test, residents sent a text with the word "FAST" or "RAPIDO" ("fast" in Spanish) to "72579." Then they will receive a message for a free beverage offer at 7-Eleven stores. Department store retailer JCPenney also piloted a new mobile coupon program at select stores in the Houston, Texas area that allows customers to download and carry coupons on their mobile phones that can be scanned directly from the phone’s display screen at the register.”

5.  High Response Rates.
Advertisers can send offers to their subscribers via text messages. CPMs (cost per thousand) for these messages can be $30 and higher. Recent campaigns that have used mobile texting to reach U.S. Hispanics have had high response rates. HBO PPV, for example, used HipCricket’s Hispanic Mobile Marketing Network to promote the Mayweather-Marquez fight and generate opt-ins for its mobile VIP club. Consumers were asked to text “PELEA” (FIGHT) for a chance to win a signed boxing glove. They received an SMS message inviting them to join the club – an offer on which 12.9% clicked. Of those, nearly 70% opted in. A similar Rite Aid campaign, which provided coupons when consumers texted “MARCA” (BRAND), garnered a 7.6% clickthrough rate. Other brands running recent Hispanic-targeted campaigns using HipCricket include Harley-Davidson, Arby’s, and Cheetos.

6. Media Properties are Adapting
Hispanic media properties are also changing their offerings to channel content to mobile phones. John Paton, until recently CEO of impreMedia said at a recent conference, that at impreMedia, each story of merit is first an SMS alert. “We can send those alerts across our national network or geo-target them to our subscribers. We went from zero a year ago to 1.2 million mobile impressions in November 2010. That is 1.2 million tiny printed pages we didn’t have to print, each with its own small story and ad”.
Online portals like Yahoo are making its Spanish-language counterpart, Mobile en Espanol, available on more than 1,900 mobile device models. The Spanish-language mobile homepage is customized for the specific needs of the U.S. Hispanic consumer, delivering what Yahoo says is a highly engaging mobile internet experience. The site allows users to bring together their favorite content and services from across the internet to create a personally relevant mobile experience.