Mobile advertising is big business. Ever since 2000, when a small Finnish newspaper offered free, advertising-sponsored news headlines via SMS, businesses have been trying to cash-in by advertising on the mobile platform.
Fast forward to 2010 and mobiles are owned by 98% of the UK population, outnumber desktops by 5 to 1, and the mobile advertising industry is worth $546 million. This is currently made up of just under two thirds SMS text ads, one third display ads (including in-app) and the rest mobile search. Even Google and Apple endorse the platform with their respective purchases of AdMob ($750 million) and Quattro Wireless ($250 million).
A recent report from UK-based research company Coda predicts that mobile advertising will grow to $2.2 billion in 5 years. The numbers are more than respectable; however, the same report expects mobile commerce to grow by 65% annually to reach $24 billion in 2015, or 7.7% of all ecommerce revenue. For so long mobile advertising was heralded as the best way for brands to leverage the mobile channel, but recent reports seem to suggest that while mobile advertising is in a buoyant state, it is m-commerce that that will rule the time of the mobile.
Mobile commerce has come a long way from the days of buying ringtones from premium rate numbers. As phones became more powerful and 3G more prominent, larger goods and services started to be sold over the mobile network. First it was intangible goods such as games and applications. Then fast food companies such as Starbucks and Papa John’s started accepting takeaway orders through their mobile websites. Major players eBay and Amazon brought the platform to the mainstream, selling tangible goods analogous to their main site through their dedicated mobile channels. In fact, in October 2009 eBay announced it had already made $380 million in sales through mobile commerce, including a $750,000 Lamborghini!
As well as location independent shopping, m-commerce has the potential to be used to streamline any transaction. In Vienna, Austria, people regularly pay their parking meters via mobile. Stayed over your 2 hours? No problem, just text the meter – this is starting to take off in the UK too. In Lagos, Nigeria, migrant workers use mobile phones to transfer money without exorbitant transaction costs. And in Port-au-Prince, Haiti, The Red Cross raised $7 million in mobile donations within 3 days of the earthquake there.
Back in the UK, Marks & Spencer recently rolled out a new bespoke m-commerce store, and Argos are busy finalizing theirs, but why, this time, are companies so sure m-commerce is here to stay? Because this time the paradigm is user driven. Mobile commerce is not a passing fad or technology for its own sake; it is the natural result of consumers’ desire for convenience and location independent transactions. As long as the internet is within reach there is no reason why full commerce shouldn’t be too. And these days the internet is always within reach.
Mobile commerce has been growing steadily for a while, but now both businesses and consumers are ready and able to embrace it: the time of m-commerce is here.
Mark Laskey
Multimedia Developer
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