Mobile operators ignore advertising opportunity

The mobile channel is taking an increasing share of advertising dollars, with advertisers rolling out more sophisticated campaigns to hold consumers' attention, but mobile operators are noticeable in their absence from the party, according to one mobile advertising platform provider.

"We don't work with mobile operators," Paul Childs, CMO and co-founder of U.K.-based Adfonic told Total Telecom this week. "I don't know where these guys are."

Adfonic, which facilitates display advertising campaigns on mobile sites and apps, relies on the open Internet and application ecosystems, with no mobile operator involvement.

Statistics suggest mobile operators could be missing out on a slice of a significant revenue pie.
Last year Gartner predicted that mobile advertising revenues will reach $20.6 billion in 2015, up from an estimated $3.3 billion in 2011.

And according to a 2012 study from the Internet Advertising Bureau UK and PricewaterhouseCoopers, mobile advertising revenue in the U.K. alone reached £203 million in 2011, an increase of 157% on-year, and is predicted to breach the £1 billion mark in 2015.

But there are still hurdles to overcome before use of the mobile channel for advertising really takes off.
"We're going to see a big shift to mobile over the coming year," said Childs, noting that according to eMarketer, people spend 20%-23% of their daily media time – the time they spend looking at all media, including TV, radio and print - using a mobile device, but the mobile channel still only accounts for around 1% of ad spending.

"That has to change. Money has to shift from other channels," said Childs.
"Advertisers need to make a decision where their money goes," he said. But first they need to define their overall mobile strategies; that is, they must establish a plan for taking their business mobile, before looking at mobile as an advertising channel, he explained.

Finally, the rise of m-commerce will have an impact on the development of mobile advertising. "This year we're going to see a huge shift around NFC," and mobile wallet services, Childs predicted.
While mobile operators might be showing little interest in the advertising space, their networks naturally have a role to play.

The quality of the mobile network is "not a dealbreaker," said Childs, but a faster broadband network means a better customer experience, which will drive the whole sector forward. This is particularly important as advertisers are increasingly turning to rich media and video to attract consumers' attention.

On Thursday Adfonic launched a new integrated mobile video advertising product that essentially enables advertisers to replicate their TV and online video ads on the mobile screen, and allows user engagement with those ads to be measured.

The product makes use of the native video player on iOS or Android-powered devices - rather than taking the user to a YouTube clip or similar - then returns the user to their Web site or app. However, while important, a seamless experience alone will not drive the industry forward.
"The video, like any other content, has to be engaging," Childs said.