Late last month, Barack Obama's US presidential campaign sent what is believed to be the largest ever mass text message, informing an estimated 2.9 million supporters that Joe Biden had been selected as his vice presidential candidate. Despite breaking records, the Obama campaign barely scratched the surface. Nielsen, the research firm, estimates that almost 60 million American mobile subscribers receive advertising messages on their phones each month, with more than 25 per cent sending a reply message back to the advertiser.
But Mr Obama's mass-messaging precedent had the advertising industry "thinking even more about how they, too, can interact with a universe of 116 million text message users in the US", Nielsen said. In the UK, where the audience of mobile internet users is estimated to be one fifth the size of the PC-based internet market, a mobile network entirely supported by advertising revenue has attracted hundreds of thousands of customers.
Blyk, founded by a former Nokia executive, is a service exclusively available to 16- to 24-year-olds, a market coveted by advertisers. In return for agreeing to receive up to six multimedia advertising messages on their phones each day, Blyk subscribers receive a monthly allowance of free calls and text messages. "We see an increasing trend of consumers willing to trade off and receive advertising to gain more - and better - mobile content," said Jeff Herrmann, a vice president of Nielsen's mobile research division. "Successful mobile marketers will meet the challenge offered by consumers by engaging with them in a way that adds value to the mobile user content experience."
The most successful kind of text message advertisement is one that offers a "real world" discount to the receiver, according to the market research group ABI. In a recent study, it said 60 per cent of respondents who were receptive to mobile advertising listed discounts or special deals at retail stores and restaurants as the kind of promotional text they would be most likely to reply to. The state of the market is comparable to that of the internet advertising industry in the late 1990s, many analysts say. While now a part of the standard media mix for most mainstream corporate advertisers, the internet was once seen as an experimental, often murky, location to promote reputable brands.
Finding the right format was a challenge, as online advertising slowly shifted from obnoxious flashing banners and pop-ups to the more graphically pleasing multimedia ads, often co-branded with the host site. Such is the case with mobile advertising. Small firms are starting up to explore the possibilities of an untested medium and the mass texting of today will likely give way to more targeted, customised approaches as the segment matures. Successful start-ups are quickly being snapped up by larger businesses, who want a safe entry point into the market.
As the potential size and scope of mobile advertising becomes clear, players from many sides of the industry are looking to get in on the action. Nokia, the world's largest mobile phone manufacturer, acquired the mobile advertising firm Enpocket last year, becoming a market leader in the fledgling industry overnight. Microsoft, the world's largest software maker, and America Online, the world's largest internet service provider, both acquired mobile advertising firms last year and are looking to extend their sphere of influence into this lucrative new business. A similar trend is taking place in the mobile network operator industry, where global players like the UK's Vodafone and Germany's T-Mobile are quickly looking to become the gatekeepers through which mobile advertisements must pass.
"We think that in general, advertisers and operators must tread carefully when delivering marketing messages to a consumer's mobile handset," said Michael Wolf, the research director at ABI, "especially given that many subscribers believe they are paying a significant amount of money for their mobile services." tgara@thenational.ae