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Tag: advertising-revenue

  • Advertising Will Subsidise Cost of Location-based Smartphone Services


    The smartphone market is likely to see big changes in 2009 – not least in how revenue is raised for services and content.

    Kris Kolodziej, CTO and vice president of business development with Spime, told smartphone-biz.news that navigation services were currently the top revenue earner in the cell phone market.

    These were followed by traffic and buddy finder services.

    Location advertising had, however, become a major talking point in the industry.

    He said he was sure that in 2009 and 2010, it would begin to subsidise the cost of services to consumers.

    Kris Kolodziej, CTO Spime

    This would be moving towards the Google business model of offering users content and services without a charge.

    “We shall see what happens with that – the consumer expects everything for free,” he said.

    Kolodziej said Google was a competitor of Spime in this respect. Google offered its mobile maps download for free, with features such as turn-by-turn and voice search.

    “Right now the user pays USD $10 per month for navigation, so that cost would need to be subsidised with advertising.

    “We will see what happens when Google comes out with this. Only Google with so many advertisers could pull this off.”

    Spime, a Fremont, California based company is a provider of wide range of location-based technologies and applications.

    Kolodziej said that 2009 was likely to be a year of consolidation in the industry. He said fewer players usually brought benefits to the consumer, citing the acquisition of Navteq by Nokia and Wayfinder by Vodafone as examples.

    Kolodziej suggested that Spime might itself be a worthwhile acquisition target.

    “Maybe Google would acquire someone like us because features like turn-by-turn are very complicated,” he said.

    “If this goes well we might be acquired by a big company.”

    What makes companies like Spime attractive, according to Kolodziej, is the growing realisation that the services provided by navigation companies had the potential to generate a lot of money, making them a juicy acquisition proposition.

    “It’s a proven market, it just needs to expand to capture more consumers,” he said.

    With smartphones now coming equipped with GPS as standard, there is no doubt that growth will come.

  • Advertisers Need To Adapt To Mobile Internet


    Internet advertisers will need to create campaigns that work with multiple devices and display sizes if they want to benefit from growing mobile advertising revenue.

    That’s according to telecom analysts Berg Insight, who say a significant proportion of mobile advertising revenues will actually derive from mobile Internet users accessing conventional web sites.

    Smartphones will be the key device used to boost traditional Internet advertising revenues.

    Other predictions for the mobile advertising market included in Berg Insight’s report are:

    • Ad-funded business models will become a new paradigm in the discount MVNO segment of the mobile communications market. Price sensitive young consumers with low income will be most inclined to accept ads in exchange for voice minutes or text messages. Incidentally this group is also highly interesting for major advertisers.

    • Idle-screen will eventually become the largest mobile advertising channel. Virtually all consumers carry a mobile handset wherever they go and check out things on the display many times per day. Embedded advertising on the idle-screen and in the user interface would provide an unmatched exposure.

    • The current economic downturn will hold back revenue growth but not innovation. New unproven channels such as mobile media will see a negative effect from cutbacks in marketing budgets. However there is still going to be much innovation in the mobile space that will create new channels for advertisers to reach out to consumers.

    • Size will matter in the race for market leadership. Financial strength will be especially important if the market develops more slowly than previously anticipated. Existing digital and mobile industry players will have a major advantage over venture capital funded start-ups, many of which will have difficulties to find financing.