Mobile mad men: Advertisers want to dominate your phone

By Rory Cellan-Jones
Technology correspondent, BBC News

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Mobile madness: The marketing industry wants control of your phone

If you think that your mobile phone is one place where you can get away from advertising, think again.

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Ganging up: The race is on to fill your mobile phone with advertising

The marketing industry has decided that mobile is the platform of the future and is rushing to send messages to your phone.

"2010 was the breakthrough year for mobile advertising," says Kerstin Trikalitis, chief executive officer of Out There Media.

"We've seen triple-digit growth rates in the last eighteen months and this trend is continuing through 2011."

She is speaking at Mobile World Congress in Barcelona, where advertising on phones has been a big theme for several years.

But this time, the space devoted to firms selling mobile marketing and the gimmicks employed seemed bigger and brasher.

Inside one hall a man on stilts is mugging for the cameras to promote one mobile advertising agency, while outside saleswomen are encouraging passers-by to swipe their phones across their chests to receive a marketing message via an RFID tag.

"We are at the start, there's lots of enthusiasm, and the industry is set to hit $20billion this year," says Marco Veremis, President of UpStream, a mobile marketing consultancy.

"But it's a bit like TV in the 1950s, it's still under development and we don't know what the killer format will be."

And that is clear - when you roam the Barcelona fairground asking exhibitors to show you some typical mobile adverts, they struggle to find something impressive.

Keep it local

In the early stages a lot of the advertising has been from the mobile operators themselves, sending texts to customers promoting their own services.

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Advertising can be served up as targeted messages, or within smartphone apps

The biggest trend is probably local search adverts, where, for example, you look for somewhere to eat and the nearest restaurants pop up.

And who is already dominating this area? Google of course, which is already taking its massive share of search on the web to this new mobile platform.

With Google Maps the main navigation tool on most smartphones, the search giant's sway over this form of advertising can only grow.

Then there is advertising within mobile applications, many of which are free and so need ad revenue to be viable.

Ragnar Kruse's firm Smaato helps place adverts in all sorts of apps on all operating systems and across different regions.

"Apps are now a $15bn business, with $2bn from advertising, so advertising is a very convenient way for developers to make money."

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The Mobile World Congress is the industry's biggest annual gathering

Mr Kruse claims that consumers are more likely to recognise a brand which pops up in a mobile app than on a website. Adverts within games are also becoming more and more common, often to promote other game titles.

But the industry has quickly realised that many traditional methods just do not work on a phone.

"The main thing to remember," says Marco Veremis," is that mobile is really personal and intimate - people don't like being advertised to on something that they call their friends or relatives on."

Display advertising, which is big on the web, is just too annoying on a mobile phone's tiny screen.

When you are navigating your way across a website on a touchscreen smartphone, display ads are a big distraction, and there's evidence that many mobile users end up clicking through by mistake.

Moving pictures

Another big growth area is video, with pre-roll adverts or interactive click-and-play campaigns.

But again this risks annoying customers who have to wait to see the content they want, and until networks become a lot better at handling video there is little threat of big advertisers moving TV spending to the mobile phone.

So advertisers have to be careful that their mobile offerings do not prove counter-productive by making smartphones less useful.

According to Kerstin Trikalitis, who says major brands like Unilever and Procter and Gamble are now putting big money into mobile campaigns, the key is to show the right ad at the right time.

"When an ad is targeted and it is valuable then consumers do like it. We are getting response rates of 20, 25%, which shows it's working."

But research published recently showed that the mobile industry still has lessons to learn about advertising. A survey of UK consumers for the mobile marketing agency UpStream showed that only 14% of consumers had ever clicked on a mobile display advert, and 32% said the ads irritated them.

"The main challenge for marketers," says Marco Veremis, 'is how you advertise in a way that doesn't look like advertising."

Expect plenty more marketing messages on your mobile, but if the advertisers succeed, maybe you won't realise that they want you to buy something.

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