The medium-term prospects for mobile ad revenue growth in Europe is being wildly exaggerated, says analyst firm, CCS Insight.
The UK-based market watcher recently released its own analysis of mobile ad growth and it caclulates that by 2010 the European market will still be shy of €450 million per year. This is well beneath some of the more optimistic figures being bandied about, says the report's director of applications and content, Paolo Pescatore.
"You only have to look out there at some of the figures arrived at by some of the other firms. Prophesies of 5 - 10 billion world-wide are being mentioned. The reality is that no one's making huge sums from mobile advertising in Europe, and this won't change in the near future," said Pescatore.
"Anyone expecting to become the next Google on the back of mobile advertising is going to be disappointed."
Pescatore is enthusiastic about the long-run prospects for mobile advertising, especially advertising revenue associated with browser-based applications, he just calculates it's going to be further off.
"When you look at things like mobile search, Google and Nokia maps and and so on, then they clearly promise a huge market in future. But mobile advertising really only just emerged last year. Do we all really believe that it's going to be worth billions in just another two?"
CCS Insight says it's looked at revenue from text and picture message ads, advertising on mobile Web portals, mobile search and ad-funded content. "Mobile phones offer advertisers many different ways to reach an audience" said Pescatore.
"Ad-funded content and mobile search will be two big growth areas, especially as more people access the Internet on their phones. Placing ads at the start of a video or adding them to the results of a mobile search are less intrusive forms of promotion. I think we'll see people responding well to this kind of ad," he claims.
"People take more notice of a mobile ad than advertising on TV or on a PC screen. And with a billion new phones being bought every year, the potential market's huge."
CCS Insight thinks mobile ad spending will certainly increase as agencies shift some of their budgets across. For one thing the credit crunch will force advertisers to reduce traditional outlets like print and TV, and push them to explore cheaper and more targeted avenues, such as mobile devices.
So eventually, revenue from mobile advertising might rival that on other channels. But until then, it says, the industry will have to knock a few zeros off its forecasts.
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