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Consumer Openness to Mobile Advertising

It's been more than two years since I last assessed the U.S. mobile phone advertising market potential for a client, and so I was interested to learn the results of the latest market research. However, the U.S. is still significantly behind the Asia-Pacific mobile communication services market, and notably a laggard even when compared to the less-advanced European market.

Although a significant 53 percent of U.S. mobile phone consumers expressed interest in spending more money on mobile data, the figure is down from nearly two-thirds from 2005, according to a recent Yankee Group survey. The overall mobile consumer data experience -- or lack thereof -- certainly plays into this, and price may be an issue for some segments.

On average, adult survey respondents indicate they currently spend $12 per month on mobile data. For the 53 percent of survey respondents willing to spend more monthly on mobile data, they are willing to spend an additional $12 per month across their top five applications/services. In sum, adults expressed a willingness to spend on average $25 per month on mobile data.

Current monthly price points for mobile video/TV packages constitute the vast majority of the money consumers say they are willing to spend. Mobile phone service providers either have to drive more value in mobile data to consumers so they are willing to spend more, or they have to give consumers more options -- packages and price points -- to access mobile entertainment. This is particularly critical to drive adoption beyond the early adopters to a mainstream audience with an increasing appetite for mobile entertainment.

The Yankee Group 2006 US Mobile User Survey shows there is not a one-size-fits-all in mobile data; different applications, services and content will continue to appeal to different segments. However, 25 percent of adults listed mobile TV/video and 20 percent listed mobile music (and a greater proportion of those under age 35) among the top five applications for future spending.

Although it is still early, the survey results highlight the fact that for most consumers there is more uncertainty around mobile advertising than outright push-back. The youth market is a bright spot. Nearly 40 percent of younger consumers (those 18 to 35 years old) would be interested in mobile advertising if it subsidized their increasing appetite for mobile data/content.

Comparatively, when the Yankee Group probed consumers more specifically on where they may encounter mobile advertising, there was both uncertainty and push-back. This can be partially attributed to the fact that there is a limited base of mobile consumers who actively use more than voice and text messaging on their mobile phones.

When the Yankee Group researchers asked consumers whether they expect to see advertising when browsing/surfing the mobile internet on their phones, 17 percent said yes, 30 percent said no and 53 percent did not know. When further probed regarding the likelihood to click on banner ads when browsing the mobile internet, the vast majority of consumers -- more than 80 percent -- pushed back, indicating they are not at all likely to do so.

Considering the lack of maturity of the market (only 14% of U.S. mobile consumers have tried to browse the mobile internet, and only 6% browse at least once a month), and the ease-of-use and form factor considerations, it is not surprising that consumers are largely uninterested in mobile phone advertising.

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