14 June 2007

Mobile advertising: will there be a consumer backlash?

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The mobile phone is the fastest growing and potentially the most effective advertising medium ever developed, but the danger of mismanaging this medium risks alienating consumers and damaging the reputations of major brands and mobile operators, writes Michael Stanley on Cellular News.

Mobile advertising has been a topic of discussion for mobile operator management teams for many years, but it was the recent moves by both Yahoo and Google to focus on the revenue opportunities presented by mobile advertising that has all in the mobile industry scurrying to develop a viable and sustainable business model that will generate additional revenues in the face of fierce competition and falling per subscriber voice revenues.

For those companies who have taken the early initiative, the ability to interact personally and intelligently with consumers via a mobile device is delivering recall and response rates not seen in advertising in a long while. Reports by NetInformer, a provider of wireless media and mobile marketing services, quote typical response rates of 15%, which is 10 times higher than traditional direct response advertising. Such successes should have advertisers and advertising agencies very excited as they currently struggle to reach consumers effectively with traditional media channels.

How then do operators harness the medium’s obvious opportunities without alienating their loyal subscribers, and how do advertisers harness the new medium without negatively affecting their brand values and associations? This is not easily answered, however these questions need to be considered within a very structured and well-planned process, acknowledging and respecting the customer’s attitudinal barriers towards the intrusiveness of mobile advertising. The risks associated with an incorrect strategy and services rollout are massive, potentially killing mobile advertising at birth.

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