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Monday, August 18, 2008

Advertising and Mobile - Still a net spender, rather than revenue earner

In all the discussion about the opportunities for mobile advertising, it is interest to consider that at present, the wireless industry spends much more on advertising than it gains in revenue. According to this article, the US mobile carriers collectively spent $6bn in 2007 on ads.

I'd imagine that at a global level, the figure is probably $20bn or so - and that's without the handset marketing budgets as well, plus retailers & assorted others. This contrasts with about $3bn predicted in new mobile-based ad cashflow into the industry, which various observers expect to rise about 5x over the next 4 years or so.

In other words, the mobile industry is likely to be a net spender on advertising until well into next decade.

It also throws up another conundrum - how much mobile-operator advertising will go via the mobile channel? Will you get a Vodafone banner while surfing on an Orange-supplied phone?

1 comment:

edsard said...

Hi Dean,

Interesting article.

You mentioned:"...about $3bn predicted in new mobile-based..."

Was this about revenue for advertising on handsets (like the Yahoo and Google mobile ads) or advertising revenue in general on Mobile Networks - regardless of the device? Got a link?

I read somewhere (maybe here dunno) that aquisition cost of 1 subscriber equaled about 200-300 euro (including marketing).

Being that most MNO's are really marketing machines, it does not surprise me that they will be spending more then earning on advertising, right?

Could be an interesting business opportunity if someone could actually figure out a way for them to earn more money on advertising then spending. $20bn is an astronomical number to grasp.

How much did google make last year?