New research for the Japanese and South Korean markets claims that a hybrid model of wireless carriers running their own mobile advertising agencies is spurring the growth of mobile advertising and marketing.

Japan will generate $1.2 billion in mobile advertising and marketing revenues by 2012 and South Korea $684 million, according to ABI Research. Most of this spend will be devoted to targeted marketing using demographic data from existing mobile subscribers.

"Japan and South Korea have almost the same market structures, value chains and service applications," said ABI senior analyst Andy Bae in a statement from Singapore.

"This is because mobile operators in both countries established their own mobile ad agencies to support operators' business models for mobile ads," he said. "The relationships between operators and the affiliated mobile ads firms are close in order to produce desirable business results."

A key reason for mobile advertising's growth in those two Asian markets is the wide availability of sophisticated 3G and HSDPA-based handsets. These devices make it easier for Japanese and South Korean consumers to accept rich content advertising messages.

In a move worth watching for U.S. mobile players, ABI claims that Japan and South Korea are now entering a new advanced phase. While text-based SMS mobile ads are still mainstream, consumers in these two markets are open to receiving rich-format ads that use multimedia.

In fact, ABI found that Japanese and South Korean consumers sometimes regard SMS ads as spam. Not surprisingly, some consumer-focused marketers are switching to multimedia messaging service, or MMS, ads instead of text-based SMS.

The company's report, called "Mobile Marketing and Advertising in Japan and South Korea," also said mobile search and gaming will show more promise in the next growth phase in these two countries.

"Mobile operators believe that search results with location-based advertising messages could generate large revenue streams with gradually increasing usage by subscribers," Mr. Bae said in the statement.

"Google and Yahoo are already implementing their business activities in the regions by cooperating with mobile operators in Asia," he said.