New study fuels mobile ad frenzy

If mobile advertising realizes it fullest potential, it could lead to an ad-subsidized model for mobile content consumption that makes users happy while reducing the financial risk for carriers and content publishers. If it doesn't, it could drive users away from content with heavy advertising.

The trouble right now, as mobile carriers and content owners begin their first forays into mobile advertising, is there isn't much opinion research available gauging how users actually feel about mobile ads. To better understand that critical perspective, the Online Publishers Association (OPA) commissioned a study, “Going Mobile: An International Study of Content Use and Advertising on the Mobile Web,” that sought the opinions of 6000 subscribers in Europe and the U.S. about the evolution of mobile Internet usage and mobile advertising.

“We wanted to understand the types of mobile content that people were looking for online and also understand what the challenges and recognition of mobile advertising were,” said Pam Horan, president of OPA.

Results of that research were announced at the OPA's Forum For The Future in London earlier this month, and they could provide encouragement for carriers and content owners trying to make important decisions about mobile advertising strategies. The study found about 37% of European consumers strongly agreed or somewhat agreed with the idea of watching an ad in exchange for free mobile content. The figure for the U.S. was only 18%, but Horan said both numbers provide some much-needed user recognition.

“The figure of 37% in Europe is a leading indicator for how the opportunity will evolve in the U.S.,” Horan said, referring to the U.S. mobile market's historical trend to be a bit behind international market and usage. “This provides some benchmark for where the whole industry is going.”

There are other numbers in the study worth watching, even if they are still modest at this point. One example is the suggestion that viewing mobile ads can lead to some kind of follow-through action by users. About 11% of European consumers and 7% of U.S. users said they discovered new products by viewing a mobile ad. About 26% of European users said they checked out a Web site after viewing a related mobile ad, and about 14% said they requested more information about the product connected with the ad.

More broadly, mobile Internet penetration stands at about 76% of users in Europe and about 71% in the U.S., with actual mobile Internet usage around 54% and 41%, respectively.

Paul Palmieri, the former Verizon Wireless executive now president and CEO of Millenial Media, an ad server and marketplace company, said that making mobile advertising work is more a function of targeting the right audience. Not everyone who uses mobile technology or even mobile Internet access can be expected to endorse it, he said, but mobile advertising can be a particularly effective vehicle for reaching so-called “Millenials” — people born after 1976.

“I think that if you're going to do this, it had better be targeted at ten- to thirty-year-olds,” Palmieri said. “The majority of people who might say they don't want mobile ads on the phones probably aren't the ones who are the real data and content users anyway.”