Mobile Ads Seen Picking Up As New Google Phones Hit Market
05 May 2009 - 3:59AM
Dow Jones News
Mobile advertising growth has slowed sharply over the past few
months but is expected to reaccelerate next year, just as a growing
number of cellphones built with Google Inc.'s (GOOG) Android
software are expected to hit the market.
U.S. advertisers are seen spending $229 million on mobile ads
this year, up 26% from $169 million in 2008, according to a report
by Brian Wieser, global director of forecasting for Magna, a unit
of Interpublic Group of Cos.' (IPG) Mediabrands division.
Magna's last forecast in July 2008 projected mobile ad spending
would increase 43% to $298 million in 2009. Still, Wieser said
despite the slowdown over the past several months, mobile ads
remain one of the fastest growing emerging mediums on Madison
Avenue. Magna predicted that mobile ad spending could nearly double
by 2011, reaching $409 million.
"Every player is investing against the long-term promise of the
platform, so I don't think anyone is slowing down," he said in an
interview.
Google has been teaming up with hardware makers to build
cellphones with the Mountain View, Calif., company's Android
software, part of its strategy to accelerate mobile Internet access
and generate more revenue by selling mobile ads.
Chief Executive Eric Schmidt said last month he expected Android
to have a "very, very strong year," adding that a number of
wireless carriers and hardware makers will be making "significant"
announcements by the end of the year. Market research group NPD
said the first so-called "Google phone," sold by Deutsche Telekom
AG's (DT) T-Mobile wireless unit, was the fifth best-selling smart
phone in the U.S. in the first quarter.
Wieser said in his report that a wide variety of trends have
converged to drive growth in mobile advertising, despite the drag
from the recession. He said the market isn't really a single ad
platform rather than a "highly fragmented group of divergent
advertising models collectively organized around portable (and
primarily cellular network-based) media."
He said the emerging market is being driven by the prevalence of
cellular subscriptions, increased mobile Web access and growth in
mobile applications, such as those on Apple Inc.'s (AAPL) App
Store, which has prompted users to consume higher levels of
data.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118;
scott.morrison@dowjones.com