Mobile messaging ad spend to reach $7.4 billion by 2017
Location capability on mobile messaging is set to drive a huge increase in mobile ad spend, according to new research.
Advertising spend on mobile messaging will reach $7.4 billion by 2017, a new report from Juniper Research has shown. This growth will be driven by a dramatic upsurge in the use of location-based SMS to deliver relevant ads to consumers.
The idea of location-based SMS is something that is likely to raise questions of privacy amongst consumers. However, operators are extremely sensitive to this and the schemes which already exist, such as O2 More, are opt-in and the consumer can choose which types of offer they would like to receive.
These types of schemes will become more common as operators attempt to look for revenue streams beyond voice and data but it is unlikely that schemes will become opt-out or compulsory, stated Juniper.
SMS ads have significant benefits for marketers, Juniper added. While they may lack the rich media content of other advertising formats, they are very familiar to consumers and have a much higher chance of being opened, even if unsolicited. SMS ads are also a low cost option for those seeking large reach; in the UK, for example, a bundle of 1,000 text messages costs around £0.05 per message, falling to around £0.03 for larger bundles.
Report author, Charlotte Miller, noted: 'Sending adverts using mobile messaging gives advertisers a simple, cheap and effective way of reaching consumers. Adding location technologies is an even more powerful proposition, particularly for transactional advertising as marketers can reach consumers who are near a location where they can purchase. Knowing that the recipients of an ad have actively asked to receive it and will in all likelihood open it is also particularly attractive.'
Miller stated that brands need to have a joined up mobile strategy, ensuring that mobile adverts direct consumers to mobile optimised sites or content, particularly given the highly promising m-commerce opportunity. She also said that mobile apps offer valuable inventory for mobile ads and spend on in-app advertising will increase rapidly.