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UK researchers Frost & Sullivan identify advertiser learning curve as next hurdle to ad revenue for mobile TV operators

In its report “Ad-based Content and Communications: A Lucrative Avenue for the Mobile Industry,” Frost & Sullivan examines the 2007 European mobile social advertising market, including ads used in messaging, social networking, voice services and mobile content advertising, including ad-based content such as music, video and games. The analyst firm sees advertising as a strong emerging revenue stream for the mobile industry, with mobile communications and advertising confident of its potential.

Estimating that Europe’s mobile social and content advertising market revenues should reach €2.18 billion in 2012, the report identifies three main requirements for operators:

  • Continuously enhance the mobile user experience through high-speed connectivity and high-quality user interfaces.
  • Use ads as a transparent value to consumers' mobile experience without being intrusive.
  • Educate the advertising industry on how to exploit the advertising power of mobile devices.

From the mobile industry point of view, advertising revenue can counterbalance decreasing revenues from voice and SMS services. But advertisers and agencies are only just beginning to understand exactly how to exploit the mobile ad medium. "Agencies' budgets rarely include a specific allocation for mobile communications," reports Frost & Sullivan research analyst Saverio Romeo.

Due to its high levels of mobile device penetration and usage, the UK is the most dynamic national market in Europe with the most developed media and advertising, with France, Germany, Spain and Italy catching up. Eastern Europe is singled out as a market of interest because the mobile device is one of the main access points for the Internet there. Russian market leader MTS is very active in advertising, and Turkish leader Turkcell has launched several advertising campaigns and services.

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