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Advertising on Mobile Phones Seeks a Market

Revenues for mobile advertising (on cell phones) in the U.S. and Canada will grow from $208 million in 2009 to approximately $1.5 billion by 2013, according to the latest market study by Parks Associates.

Adoption of smartphones, 3G network data plans -- or newer wireless services -- and downloadable applications will spur this growth in ad revenues, with significant increases beginning in 2010.

Parks Associates estimates there were 62 million smartphone users in North America in 2008, with user penetration to reach 239 million in 2013.

Parks Associates projects U.S. 3G network data plans will reach 95 percent penetration by 2013, with Canada achieving 70 percent penetration.

"Mobile advertising is poised to take advantage of opportunities presented by the diffusion of 3G networks and devices such as the smartphone," said Heather Way, research analyst, Parks Associates.

Advertisers will begin to incorporate the mobile format into their media campaigns as this medium matures into a viable marketing space.

However, unlike the Asia-Pacific and European markets, where enhanced mobile phone usage is commonplace, I believe that the North American market is still in the early-adopter stage of market development.

Ms. Way also cautions that advertisers could encounter early resistance from consumers. The Parks market study found 38 percent of respondents do not want to receive mobile ads, while 37 percent remain neutral to the idea of ads on their mobile phone.

"However, teens and young adults are more receptive to ad-supported mobile content, particularly in entertainment genres," Ms. Way said. "Advertisers need to develop innovative ways to reach these consumers."

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