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Mobile Services to Capture Advertising Revenue in Emerging Markets

By Andrew Redfern @ 9th March 2009 1:56 pm

As market penetration rates for mobile services continue to soar in emerging markets, advertisers are expected to dramatically increase their spending on “third-screen” ad campaigns targeted specifically to users of mobile data services, providing a potentially huge new revenue stream for operators of mobile networks, according to the latest report by Pyramid Research, the telecom research arm of the Light Reading Communications Network.

“Mobile Advertising in Emerging Markets” examines mobile advertising initiatives and the revenue potential in emerging markets, with a particular emphasis on Brazil, China, Indonesia, Mexico, Romania, Russia, South Africa, and Turkey. This 84-page report puts Pyramid Research’s findings in context by making comparisons with global trends and developed markets, such as the U.S. and the U.K.

Pyramid predicts that mobile advertising will boost mobile data service revenues by 10 percent within the next five years, as mobile service adoption rates grow worldwide. Mobile data services are expected to account for more than 33 percent of operators’ service revenues at the global level by 2013, making any driver of this market a strategic component.

The expected growth in mobile data subscriptions will make mobile advertising a robust growth area despite an expected overall downturn in advertising spending over the next two years, notes Jan Ten Sythoff, manager of Mobile Content at Pyramid Research and co-author of the report.

“Fixed-line Internet and mobile platforms will take market share away from traditional formats in the short term and grow in line with economic recovery from 2011 onward,” says Sythoff. “Mobile and Internet platforms combined will account for roughly 12 percent of overall advertising spending in emerging markets and 30 percent in developed countries by 2013.”

The Pyramid report identifies eight developing markets in which mobile advertising initiatives are gaining ground. Combined, these markets will account for more than 35 percent of mobile subscriptions worldwide by 2013. “South Africa and Indonesia stand out as markets where the mobile sector’s share of overall advertising spending will surpass that of the Internet medium as early as 2009,” says Sythoff.

“The development of mobile advertising is favorably affected by mobile networks’ evolution to 3G, but even basic services, such as sponsored messaging and alert systems, are enabling brands to reach a wider audience and make the most of the mobile channel. For example, SMS-based approaches can help companies reach more than 60 percent of the mobile audience across emerging markets immediately and close to all subscribers in five years.”

“Mobile Advertising in Emerging Markets” is part of Pyramid’s research report series. A blend of primary research and qualitative analysis, Pyramid’s research reports offer comprehensive coverage of the fixed and mobile communications space and enable those in the communications industry to stay ahead of changing market dynamics.

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