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Mobile Operators 2008 Revenues Threatened by Mobile Advertising

AdaptiveMobile (opens in new tab), the leading security provider of mobile subscriber protection for enterprises and individuals, today urged mobile operators to be prudent when planning how advertisers use their network this year, as the threat of unparalleled customer churn looms.

Lorcan Burke, CEO, AdaptiveMobile, comments: "All the signs point to this year being a record-breaking year from a revenue perspective for mobile operators globally. Messaging volumes are reaching an all-time high, believed to be over 50 billion in 2007 in the UK alone. Investment is also bullish in emerging markets, such as the recent news that a group of carriers including MTN, Orange and Vodacom are committing more than £25billion into the Sub-Saharan region.

"The continued development of next generation networks and the ongoing evolution of multimedia handsets such as Apple's hugely popular iPhone will also increase subscribers' purchase of high-value data services.

Meanwhile, the potentially lucrative mobile music market appears to be heating up too, with the likes of Vodafone and Nokia having announced ambitious investments in 2007.

"However, boom could well become bust this year for operators that carelessly expose their customers to mobile advertising, as businesses become more aware of the medium's potential. A 2007 Pontis survey revealed that the mobile network is a powerful channel for advertising, with 11% of mobile user respondents stating they would buy products as a result of receiving an offer from their operator - a much better return rate than most other advertising and direct marketing formats.

"But that same survey also found that 70% found mobile marketing campaigns totally irrelevant to them, whilst two thirds are fed up with mobile phone spam - and this is where the danger lies: disgruntled customers switching to a mobile provider with a more suitable mobile advertising strategy.

"Several analysts have commented on the fact that mobile operators are still not able to sufficiently segment and understand their customer base. Sending the right content to the right people is key for the success of any marketing campaign, and if mobile operators want to sign-up the big brands that offer big money for mobile advertising, they need to understand and manage customer preferences and permissions. Otherwise both their bottom line and brand will suffer significantly this year."

Désiré Athow
Contributor

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.