Why is mobile advertising catching such speed?
There are currently over 3.3 billion active cell phones worldwide, while just over 1 billion people are connected to the Internet. Many of the ones that have a cell phone but not PC Internet access are Hispanics and Latin Americans. This fact has fueled to reach out to the Spanish-speaking world through mobile handsets.
Mobile advertising can combine the reach of television with the precision of direct marketing and the tracking potential of the Internet, which explains why CPMs can be as high as $50.
Many Madison Avenue advertising agencies have created their own mobile marketing units, including Interpublic’s Ansile Mobile. For a first-hand take on how a major digital agency views the Hispanic mobile market, hear Sacha Xavier, Group Media Director at Avenue A Razorfish at Portada’s Second Annual Hispanic Digital and Print Media Conference in NYC next Thursday.
How big is the mobile advertising market?
The Shosteck Group, an international telecommunications consultancy based in Silver Spring, Maryland (USA).predicts in a recent study that the global market could reach $9.6 billion by 2010, as current growth rates are close to 50% annually.
Another consultancy, Berg Insight estimates that by 2012 the share for mobile media is expected to have reached 7.5%, while at the same time the digital advertising market will more than double in size. In monetary terms, the value of all mobile channels combined is forecasted to grow with a compound annual growth rate of 79.8 percent from $288 million in 2007 to $5.4 billion by 2012.
What about the Hispanic mobile advertising market?
Hispanics clearly over-index in mobile use and in mobile advertising consumption. According to ComScore m:metrics, Hispanics significantly over-index on mobile content consumption (71%) compared with the market average (48%). Nielsen’s Q2 Mobile Advertising Report cites Hispanic data users as more likely (41% compared with 30%) to recall seeing ads on mobile phones and more likely (22% vs. 13%) to have responded.
Mobile advertising and marketing companies are partnering with media properties to increase their mobile networks. Hipcricket last April announced the first Hispanic mobile marketing network. Through partnerships with Hispanic radio networks, Hipcricket incentivizes mobile phone users to become opt-in database members, which it then can sell to its advertisers. Hipcricket will also partner with print and digital media companies. Yesterday Hipcricket reported that it expanded its footprint during the first half of 2008 by 178% in the number of broadcast stations with which it had entered into agreements.
What other companies are in this market and what do they do?
Many companies are specifically targeting the Hispanic mobile (advertising) market including ad Agency, Ansible Mobile, Chicago based mobile marketing firm Vibes Media and of course mobile units of major media companies like Univision Movil or Impremedia.
What mobile applications are particularly good for the Hispanic market?
Music downloads and anything fútbol-oriented content are of course wildly popular among Latin mobile users. Language services constitute the most popular mobile content among Latinos, and some companies have interesting approaches meeting demand for such content. Austin-based Edioma seeks to provide language translation over the mobile phone. Its mission is to develop interactive mobile language solutions that are affordable and easily accessible to the non-English speaking wireless customer. The company wants to build its ties to U.S. cellular carriers before launching a marketing effort at Latin American wireless companies in 2009. For the first quarter Larry Upton expects to expand to Mexico and in the second quarter to Venezuela, Argentina and Peru.
Approximately 54,000 subscribers of Former Sprint MVN Movida downloaded Edioma's software that offers English-language training and assistance to native Spanish-speaking adults and children. Edioma is working with companies in the fast-food, money transfer, credit card and electronic retailing sectors in order to sponsor some of its applications.
What is in it for the operators?
The phone companies get a significant cut (often 50%) of mobile content purchases by consumers. "Without a robust mobile marketing and advertising market, the prospects for the mobile Internet—and in particular, mobile content— will be limited," says Jane Zweig, Chief Executive of The Shosteck Group. "A robust mobile advertising market could subsidize many mobile services (as advertising supports many TV and online services today), encouraging take-up and usage of mobile Internet services such as games, music, video and even TV. It should also attract important content providers."
Look for the next Market Intelligence article on Hispanic Mobile Content Production and Aggregation to be published on October 22nd.