Mobile advertising attracts Best Buy, Volkswagen

01 February 2010

NEW YORK: Companies ranging from Google and Apple to Best Buy and Volkswagen are seeking to improve their understanding of how best to use mobile advertising to reach consumers.

eMarketer, the research firm, has suggested that mobile adspend in the US stood at just $416 million (€298m; £258m) in 2009, compared with the total of $320m recorded the previous year.

The company has also estimated that the ad revenues delivered by this platform will climb to $1.1 billion by 2012, having downgraded its previous forecast, which pegged this figure at $2.4bn.

Mark Read, ceo of WPP Digital, argued "the growth has been disappointing. The only large numbers on the table are the prices of the acquisitions – not the amount of revenue they're generating."

Google, the online search giant, has recently ramped up its activity in this area, buying AdMob, the specialist ad network, and unveiling a range of tools it hopes will attract brands to this medium.

These include a "click to call" facility, whereby users viewing search ads on devices like Apple's iPhone will be presented with a phone number which they can call at the touch of a button.

However, Eric Schmidt, Google's chief executive, warned "it's probably the case that the real impact on mobile [advertising] will come from products that aren't yet built."

Schmidt identified augmented reality as being one key driver of future growth, and this emerging technology has already received interest from Adidas, Coca-Cola and Procter & Gamble.

Apple, the consumer electronics pioneer, took over Quattro Wireless, a mobile ad firm, in January, a move which was motivated by a desire to help monetise the "apps" produced for its devices.

Peter Oppenheimer, its chief financial officer, said the deal was intended to provide "a seamless way for our developers to make more money on their apps, especially those that are providing free apps."

Moreover, as these apps will also work on the iPad, its new "tablet", it is predicted that many marketers may now consider making more use of this channel.

Volkswagen, the German automaker, began using text messages in its marketing in 2008, and has since expanded the scale of its activity.

The maker of the Golf appointed AKQA, the digital agency, to build a framework for its mobile strategy in 2009, with results including the development of a dedicated mobile website, and a game to support the launch of a new GTI hatchback.

It is also building a range of "apps", to be made available on its mobile portal, allowing customers to book their vehicle in for a service and pay bills, and enabling potential customers to view the latest deals.

Best Buy, the electronics retail chain, is also looking make more use of mobile, but Barry Judge, its cmo, suggested that ads need to be made more interactive than at present.

Despite calling for further development in the tools available on this medium, Judge predicted "this is going to be a big area. It may dwarf what the PC internet does."

The Richfield-based firm is considering developing its own apps, and adding codes to its goods, which will redirect shoppers to information about specific products on the mobile web when scanned with a wireless handset.

Carrefour and Nokia have previously trialled this latter approach in Europe, while Microsoft has developed a system which it hopes will take these "QR Codes" in to the mainstream.

Data sourced from Wall Street Journal; additional content by Warc staff