Arthur D. Little: A Mobile Playground

As consumer demand for mobile broadband services reaches critical mass"¦ Arthur D. Little predicts that in the coming years mobile

advertising is poised to be the next major digital media platform for

brands to reach customers, and the key telecoms players have a great

deal to gain from bringing their services to market early. Forecast

figures predict roughly 60 per cent annual growth in mobile advertising

spend over the next four years. The report, "A Mobile Playground," published today by Arthur D. Little´s TIME

(Telecommunications, Information Technology, Media and Electronics)

practice, includes predictions about the size and content of the

European mobile advertising industry, as well as offering both telecoms

operators and advertisers insight into what is driving interest in

mobile advertising and how they can best navigate the often unchartered

waters of advertising to consumers via a hand–held device. Key findings

include: Online and in hand: mobile broadband and advertising. Unlike

previous reports that have categorised mobile advertising as a new and

different way of communicating advertisers´ messages, Arthur D. Little´s study finds that

mobile advertising is the next step in the evolution of the online

advertising industry. With the rise of mobile broadband unavoidable - Arthur D. Little recently predicted 50 per cent European penetration

over the next five years - the report argues

that mobile advertising will grow alongside mobile broadband and build

on the interactivity of IP technology and mobile devices´ unique functionality to develop new forms of online advertising

particularly suited for the hand–held web surfer. Telecoms operators must act early. Historically mobile operators

have enjoyed a prime position in the telecoms value chain, as the

controller of both the user interface and customer relationship.

However, only 5 per cent of mobile operators´ revenue is generated through advertising, compared to 16 per cent in the

wider media world. If operators do not identify and secure their role in

the provision and delivery of mobile advertising, they risk losing a

major revenue stream to traditional internet advertisers like Google or

Yahoo. Either forming partnerships or through specialist acquisition

telecoms providers risk falling behind their competition in the internet

advertising space if they do not begin developing the technology and

infrastructure to eventually deliver large–scale, multi–format mobile

advertising to their customers. This report offers four specific

recommendations for how mobile providers can begin taking action to

stake their claim in the mobile advertising market. "Advertisers prefer to deal with a single

broker when launching a mobile phone ad campaign rather than striking

deals with individual carriers across the markets. Making mobile

advertising a true success requires cooperation among operators –

something mobile operators typically haven´t been very good at," says Klaus von den Hoff Global Head of Arthur D. Little´s

TIME Practice. What it will look like. Online and mobile advertising is still

dominated by search and display formats such as a banner, pop–up, or

sponsored link. However, mobile advertising offers the possibility for

more interactive and dynamic formats, such as service call waiting

idle–screen advertisements, mobile TV ads, games and voicemail ads. Push

ads via SMS/MMS are another traditional option, but one whose potential

has yet to be fully recognised due to operators´ hesitation to cannibalise their core services in order to chase the

ever–elusive advertising dollar. The full report includes Arthur D.

Little´s predictions of which mobile

advertising formats are most likely to gain traction, and each format´s

percentage of mobile advertising share. Blyk: a case study. The report documents the results from

early adopters of Blyk, a UK–based virtual network operator, which has

successfully launched large–scale mobile advertising in the UK with a 29

per cent response rate. The report identifies how Blyk used highly

defined target groups and user data to achieve such positive rates of

customer interest - 29 per cent compared with

.05 per cent response rate for a typical online marketing campaign. "Mobile players that want to take a serious bite of the advertising

market first need to establish how they will deliver mobile advertising

and prove they have the scale of reach to compete with the big online

players", says Juergen Morath, co–author of the report and a

director in Arthur D. Little´s TIME Practice. To access the full report, please visit www.adlittle.com/mobileadvertising. About Arthur D. Little Arthur D. Little (ADL), founded in 1886, is a leading global management

consulting firm that links strategy, innovation and technology to master

complex business challenges while delivering sustainable results to our

clients. Arthur D. Little has a collaborative client engagement style

exceptional people and a firm–wide commitment to quality and integrity.

ADL is proud to serve many of the Fortune 100 companies globally in

addition to many other leading firms and public sector organisations. Arthur D. Little has over 30 offices worldwide, employing over 1,000

people. If you would like additional information on the firm, please

visit www.adl.com. TIME (Telecommunications, Information

Technology, Media, Electronics) The global TIME Practice of Arthur D. Little advises companies in the

telecommunications, information technology, media and electronics

sectors. ADL consultants assist their clients around the world in

solving strategic, operational and technological problems. The range of

advice extends from concept development (strategy, organisation

processes, IT) to implementation. In addition, the TIME practice works

with investors on major financing projects and corporate purchases and

sales.