Do Mobile Ads Pay Off?

Mobile phones may be the last frontier for advertisers, but the frontier is quickly dwindling away. The talk at the 2006 CTIA Wireless IT & Entertainment show in Los Angeles indicated that mobile ads could bring in $11 billion in revenue in five years.

by Kristina Knight

At first, mobile companies and advertisers were slow to catch on to the potential ad space because users have a very low tolerance for spam. Now, however, research indicates that as long as the ads are not intrusive and result from mobile ad searches users don’t mind the small intrusion. In a European trial, about 98% of users who received mobile ads responded by agreeing to continue to the next step or learn more about the advertising application.

A deal between JumpTap and Alltel Wireless, the largest network in the U.S., is another positive indicator. They are collaborating on a new mobile search platform that will provide users with ringtones, graphics, local search results and other content free of charge.

Mobile ad space is wide open and a highly lucrative opportunity for advertisers. This year, mobile ad revenue is expected to be about $871 million. By 2011, the research firm of Informa expects that revenue to jump to $11.35 billion. Those who pay for priority search placement, banner ads or text messaging ads will likely see the biggest revenue boost.