mocoNews.net - Downturn Will Hit Mobile Advertising; Advertisers Will "Retreat Into What Is Most Proven"

Economic uncertainty will affect mobile advertising for at least two years, at which point marketing agencies will expect clients to increase their ad budgets, reports The Financial Times. Jean-Paul Edwards, executive director of futures at Manning Gottlieb OMD, which is part of Omnicom, a marketing agency, said advertisers become more conservative in downturns, and "retreat into what is most proven....The current economic climate will push things back a bit. If money is tight, mobile is not proven yet."

For companies like Nokia ( NYSE: NOK), Yahoo ( NSDQ: YHOO), Google ( NSDQ: GOOG) and Microsoft ( NSDQ: MSFT) and opeartors, which all expect mobile advertising to support mobile initiatives, this would not be great news, however it seems revenues will still increase just not at the growth rates some may like. Research firm Informa is estimating that the revenues derived from placing ads on mobiles will rise to $12.09 billion by 2013, from $1.72 billion in 2008.

Separate from this report, I asked Paran Johar, chief marketing officer at Jumptap, a white label mobile search company and ad network, how the economic downturn will affect the business. He said when compared to traditional media, like newspapers and TV, the Internet and mobile will do well. "Spending is down in those mediums. Maybe Internet growth is slowing a bit, but it's still growing, and mobile is a subset of that. The bright star is the interactivity component...mobile is a personal medium, and it's portable. We are seeing mobile spending increasing month over month, and quarter over quarter and more advertisers are looking for a measurable medium, and they are realizing that mobile is the Internet on steroids. It's interactive, and we've been doing this as a medium for about a year, so the growth has been stagnant, but we've worked through some of the issues, and I think growth is increasing. Whether it's growing slower because of the economy than it would have, I don't know."