May 14, 2010 / 9:05 AM / 8 years ago

Global ad industry eyes boost from mobile devices

MOSCOW (Reuters) - The global advertising industry is eager to capitalize on booming use of mobile phones for Internet access as more enhanced devices are coming to the market to get more consumers reachable online.

<p>A trader talks on his mobile phone outside of the New York Stock Exchange in New York May 6, 2010. REUTERS/Lucas Jackson</p>

The trend is promising bumper returns in future years especially in markets like Russia where Internet usage is growing rapidly and is forecast to do so for years to come as people’s incomes find support from oil-based economic growth.

“I think mobile is a fantastic opportunity,” Nikesh Arora, Google President of Global Sales, said on the sidelines of an International Advertising Association conference.

“The advent of the iPhone, the Android devices and the Blackberry have finally given people reason in the western world (to) start using the mobile data. And as you see that go up, you begin to see the relevance of advertising in those applications,” he told Reuters Insider Television.

Data is seen as the main driver of mobile companies’ future revenue streams as new-generation technologies develop to allow the transfer of large amounts of information at a high speed.

Top global advertising and marketing chiefs, gathered in Moscow for the two-day IAA Congress to consider growth strategies for the $450 billion industry, have called for a new approach to consumers, based on a deeper understanding of their needs and the context they are living in.

The mobile phone has become an essential tool for the vast majority of people in the developed world and is moving fast on this path in developing countries like Russia and China, and as the handsets are increasingly used to access the Internet, the advertising has to catch up, industry players said.

Google, the online search global leader, announced a $750 million deal in November to buy AdMob, which controls about one-third of the market for putting ads on mobile applications and Web pages.

And last month Apple announced a new advertising platform for the iPhone and iPad, dubbed iAd, showing the potential large players believe the market has. Google said Apple’s move was evidence of a highly competitive market.

RUSSIA GROWTH

“Mobile offers unique opportunities in targeting, understanding a customer behavior, not only what the customer does but where the customer is ... at this particular moment, and this allows to give the customer a very relevant message,” Mikhail Gerchuk, Chief Commercial Officer of Russia’s top mobile phone operator MTS, told the conference.

Gerchuk said the Russian mobile advertising market could grow to $100 million by 2013 from $15 million now, and forecast that this type of advertising will surpass some other ways of advertising in a few years time.

Advertisers are in general bullish on Russia where consumer markets are expected to boom again as strong oil prices are helping the country out of recession.

“We are seeing growth in early stage markets where more people are going on the Internet, and markets with large populations are wonderful places,” Google’s Arora said.

The number of Internet users is expected to rise to 5 billion worldwide over the next 10 years from about 1.8 billion now, Arora said.

“I think in the next 5 to 8 years 30-50 percent of the media is going to be consumed on the web, and if you look at the advertising proportion of the Internet versus the overall ad market, we are still under 10 percent.”

From the mobile perspective, it means booming growth of content including advertising distributed via portable devices.

“I believe that for communications the content experience on the mobile is very important. Mobile is a very important platform for content distribution,” Emilio Azcarraga, CEO of Mexico’s top broadcaster Televisa, told Reuters.

Televisa has been expanding into mobile services and after buying a 30 percent stake in Nextel Mexico, a unit of NII Holdings Inc, it aims to bundle together fixed-line telephone, wireless, Internet and video, becoming the first provider of so-called quadruple services in Mexico.

Editing by David Cowell

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