Advertisers look to mobile phones as users seek free TV

Advertising on mobile phones is expected to boom over the next five years, creating a market worth more than $11.3bn (£6bn) annually, with consumers persuaded to accept adverts on their handsets by the offer of free content such as TV channels, games and music.

With mobile phone ownership already outstripping PC use across the world, online advertising players such as Google and Yahoo! are moving their search engine products on to mobile phones. But research by industry experts Informa Telecoms and Media, to be released today, shows that advertising-backed content services such as mobile TV will also be a draw for advertisers.

The move from demanding that customers pay when they download music or videos to free services backed by advertising, however, represents a challenge to mobile phone operators. They had been hoping to charge for content and levy monthly subscription fees for mobile TV. If they cannot persuade broadcasters or music firms to cut them in on advertising-backed services, they risk becoming little more than access providers.

Informa estimates that the mobile advertising market, forecast to be worth $871m this year, will rocket to $11.35bn in 2011. While that is a small percentage of the global advertising market, growth is expected to be fast. Mobile search advertising and display advertisements on mobile web pages will account for about $3.1bn by 2011, with text and picture messaging advertising raking in $2.7bn, it says.

But Informa says advertising over mobile TV will be most lucrative, worth almost $4.4bn by 2011. Virgin Mobile will today launch Britain's first "true" broadcast mobile TV service, offering a handful of channels over mobiles at the same time as they go out on TV. It is expected to eventually charge a subscription fee. But Informa's head of mobile content, Dan Winterbottom, said "people do not want to pay for something they can already watch at home for free".

So mobile TV is expected to become free, paid for by advertising. During the World Cup, mobile phone operator 3 offered a free downloadable video magazine show paid for by Canon with advertising. 3 says the campaign had 61% recall.

There are still some hurdles. 3 has a deal with ITV to simulcast ITV1 to mobile phones. But because of content rights issues, it has had to cut the advertisements.

(c) The Guardian

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