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Economy makes business case for mobile advertising more compelling

By Guy Yaniv

Mobile advertising, one of the most exciting frontiers in interactive advertising, is taking off around the world, and the potential is enormous.

The mobile environment offers a variety of media with different characteristics suitable for different purposes and audiences -- from SMS to mobile Internet and ringback tones.

However, the global economic climate has negatively affected many new ventures in a number of fields. How will it affect mobile advertising?

The worldwide economic crisis is impacting all parts of the advertising ecosystem. Total advertising budgets have been reduced and advertisers are therefore challenged to launch successful campaigns with lower budgets.

The global economic climate has also affected consumers, who are more aware than ever of their communication spending and are trying to shrink their monthly expenditures.

Almost ironically, current challenging economic realities actually make mobile advertising more compelling than before.

Even though advertising budgets in general are being reduced, it remains a necessity for consumer brands.

With brands seeking media channels that can provide a better return on the advertising dollar and eager to invest more of their budget in measurable campaigns, marketers and advertisers are starting to realize the extraordinary value and effectiveness of mobile advertising.

The efficacy of mobile advertising draws from its many strengths, such as:

Targeting: Mobile advertising systems offer the advertiser the ability to target a campaign only to users who will find it most relevant and valuable, and therefore are highly likely to respond to it by clicking or purchasing.

Since mobile operators know so much about who their subscribers are and what they like, ads can be personalized for maximum effectiveness.

Using real-time targeting can usually improve relevance and boost click-through-rate.

According to Chetan Sharma, author of "Mobile Advertising: Super Charge Your Brand in the Exploding Wireless Market," while the typical click-through rate for an Internet banner is around 0.2 percent, a mobile banner ad's click-through rate ranges from 3 percent to 6 percent and higher. Therefore, targeting is key in getting the best return on investment for advertisers.

Real-time analytics: Another advantage that only the mobile operator can offer the advertiser is the ability to measure the activity in real-time.

For example, knowing how many and which users called to receive more information is valuable data that only the operator can provide.

Analyzing in real-time which subscribers respond and which do not enables the advertiser to modify the campaign on-the-go, maximizing its effectiveness and success.

With real-time information and post-campaign reports, mobile operators can demonstrate the success of campaigns to advertisers to prove the value of their mobile advertising spending.

Immediate call to action: Mobile devices encourage and facilitate immediate user response -- such as click-to-call or reply by SMS -- while interest is at its peak.

For example, the user's location can trigger sending an ad for a business at a nearby location.

Another example of enabling an immediate call to action while interest is at its peak is when walking into a mall, a user can receive an ad with a special discount offer from the mall's multiplex cinema. All the user needs to do to reserve discounted seats is to reply.

Mobile ads good for subscribers
Unquestionably, in the current economic reality, mobile advertising can be good for advertisers. Fortunately, it is good for subscribers, too. How?

With the popularity of the Internet and its effect on consumption habits, users have become accustomed to the all-is-free Internet model.

Many users now expect services and content to be available for free even in the mobile environment, which traditionally charges for nearly everything.

Users are willing to have advertising on their mobile, as long as it is relevant and can be controlled by them and lowers their communication expenditure. This is especially true these days when the economy is a factor and consumers are very price-minded.

The beneficial fact is that mobile advertising enables operators to earn more money, while their subscribers actually pay less.

Advertisers enjoy a better return on each advertising dollar that they invest through higher response rates and shorter ROI. That's a recipe for success during any economic climate, and today's economic reality makes it particularly compelling.

Guy Yaniv is vice president and general manager of Comverse Mobile Advertising, Wakefield, MA. Reach him at