The rise in Mobile Advertising Revenue

Over Christmas, GoMo News is posting articles written for us by leaders and innovators in the mobile space. Start-ups and established businesses from all over the industry have sent us piece looking back at the year that was, and ahead to 2010. Here’s our first, from Sapna Burton, Head of Creative Solutions at Flirtomatic. Flirtomatic is a successful mobile social network and dating service.

2009 has seen companies approach mobile advertising with extreme caution. Budgets have been slashed as everyone tightened their belts to prepare for the bad year. But people remained optimistic that if they could get through the year, 2010 would be better. But as 2009 ends, is this the case for mobile advertising?

The digital space has done well in recent months, with traditional media bearing the brunt of the cuts. Many print titles closed this year, including TheLondonPaper, The London Lite and Media Week, as more and more budgets drifted over to digital. Despite this there is still reticence to trial too much ‘new’ media – i.e. mobile. The focus is on ROI, ROI, ROI and keeping the spend where it’s known it will deliver. For a lot of digital planner/buyers this still means online only, with the general consensus being that most of their clients do not have a mobile strategy in place.

However, we’re undeniably in the midst of a mobile application boom. For many of brands and companies dipping their toes into mobile, ‘apps’ seem an easy introduction. But is it the right strategy? How much value does an app really provide for their £10k+ price tag? Mobile apps are hot and look sleek, but many crucially fail to deliver the footfall and numbers hoped for on launch.  Most apps are used for only a short time before the novelty wears off. It’s different for companies like TomTom who provide a genuinely mobile product and charging through the application – but in many other cases app development just seems to be a way of ticking the ‘mobile’ box.

All that we’re seeing at the moment bodes well for mobile in 2010. There is always a lot of talk about ‘the year of mobile’. Every year the industry declares that the next year will see mobile make it big. But rather than a single year, it’s more likely to be a slow upward battle to increase confidence in the medium. Google’s purchase of AdMob may have helped legitimise mobile, but there’s still along way to go. I recently attended a social media event with major brands, agencies and social media – but not one person brought up mobile until 45 minutes later, when I did. A lot of education is still needed across the industry. That Mobile also tends to be talked about in isolation doesn’t help – with most dialogue happening between those that sell it, and in seminars which focus purely on mobile rather than its integration into the media mix.

In Flirtomatic’s case, we’ve seen a rapid increase in advertising revenue since the end of July. The month-on-month growth has been around 20% and the revenue from advertising has doubled from July. August to November proved to be one of the largest growth periods for consumer brands – essentially Internet brands marketing mobile products, services or promotions. These brands have skyrocketed to now contribute 18% of Flirtomatic’s total advertising income.

Mobile Network Operator Advertising has seen growth throughout 2009 with the biggest increase coming from integrated deals, utilising more than just display banners to meet a client’s needs. A good example of this is a campaign Flirtomatic have been running with a national operator for the last nine months, providing incentives for free PAYG sim cards. As part of the campaign, Flirtomatic offers 1000 free Flirt Points to anyone signing up. It helped the operator distribute more PAYG sims and it also drove people to try out Flirtomatic, a significant number of which are staying with the site and spending more money. Since the campaign has been going for nine months, is showing consistent results for both parties and provides an example of a long-term relationship that has increased footfall, registrations and transactions.

In summary, there are strong indications that we will see a rise in mobile advertising in 2010, but largely perhaps because advertisers have been so cautious in 2009 by comparison. With a shift toward more and more digital revenues, this should only bode well for mobile, but it will not happen without collaboration from all parties: the mobile industry, clients and agencies.