September 25, 2008
Development of mobile advertising in the Russian market
Oleg Prikhodko, Bercut Products Director
Today, mobile advertising in the Russian market is regarded by some as a promising opportunity, and all the interested players are searching for the most efficient means to apply it. According to estimates produced by experts, the market volume in 2007 was $3 to $5 million, and they forecast that it will reach $12 to $15 million in 2008.
The figures for 2010-2012 are quite divergent, however. Some experts believe the market will only start raising money at that time, but others give figures ranging from $50 to $200 million.
Such a range of opinions is due to the fact that the trends in the Russian market’s mobile advertising development are still difficult to perceive, and key issues haven’t been fully resolved:
- Technological issues;
- Advertising business models;
- Large-scale advertising companies are too conservative to see the advantages of new advertising media;
- Subscriber attitudes about receiving advertising messages on their mobile phones (not a declared attitude but a situational one).
Nevertheless, one can state that the market has indeed emerged. The market players realize all the aforementioned problems and are seeking ways to respond. Various advertising models are being tested:
- Advertising during a call;
- SMS broadcasting (it is implemented not only by operators, but also by advertisers according to the voluntary subscriber database);
- Publication of advertisements on WAP portals (of operators, TV programs, social networks and dating services);
- Idle-screen advertising;
- Advertising in mobile applications, initially with games.
Some of the models being tried will eventually disappear due to their inefficiency, and this is already occurring at the stage of market development. Others will perform admirably, but it’s difficult to predict how they will evolve, because, to date, there are no complete solutions to the other market problems.
Positive features of the potential mobile advertising market include the possibility of precise targeting and, consequently, a higher degree of response. For the test projects, which have been completed already, the degree of response to mobile advertising was 10%-20%. Certainly such a showing will be of interest to advertisers. However, the prime determinant is its efficiency as an advertising model. Considering those of other media, the efficient models are TV broadcast advertising and the Google context model for the Internet.
The reasons such models have become acceptable to consumers are as follows:
TV advertising
Television is free of charge.
Google context model
Correspondence to the information being requested; unobtrusiveness.
Currently, the main task for the incipient mobile advertising market may consist in the development of an effective scheme of interrelations between the operator, the advertiser and the consumer. Nevertheless, it won’t be possible to judge the market’s potential until this task is accomplished.
The estimated volume of the Russian mobile advertising market is as follows:
