Frost & Sullivan: Mobile ad revenues could soar

U.S. mobile advertising revenues will reach around $1.9 billion by 2012, reveals research firm Frost & Sullivan its latest report.

by Helen Leggatt

Almost 85% of Americans use a mobile phone, according to Frost & Sullivan, giving wireless carriers a customer base of around 250 million customers to tap for mobile ad revenues.

“Adoption of mobile advertising by the nation’s largest mobile operators and innovative mobile virtual network operators (MVNOs) is a testament to the perceived potential of the market,” says Frost & Sullivan Industry Analyst Vikrant Gandhi.

A potential fly in the ointment is concern over privacy. The increase in location-based services using mobile phone GPS chipsets provides the potential for highly targeted, located-based campaigns.

“Mobile advertising efficiently serves the expectations of advertisers, mobile operators, and even subscribers when offered in a highly targeted, non-intrusive manner,” said Gandhi.

On the flipside, not all consumers embrace this “big brother-esque” approach. Research has already shown that online behavioral targeting feels “creepy” to some consumers and ad messages based on a mobile phone user’s location have the potential to cause further anxiety.

"Although advertisers will want to delineate their target audience by demographics, location, handset, and other parameters, mobile operators should be cautious while providing information to preserve their subscribers' privacy," said Frost & Sullivan’s report.