Value chain participants in mobile advertising need to guard against 'over targeting'
The proliferation of smartphones, tablets and other mobile devices has created a catch-22 situation for mobile advertisers. While on the one hand, the customer pool has expanded vastly, the diversity of platforms and operating systems challenges advertisers to attract a true audience. Ineffective technologies for cross-device digital advertising can result in brands overspending and still not achieving the desired results.
The application-to-peer (A2P) SMS advertising segment is expected to earn revenues of $19.8 billion in 2014, and reach $95.4 billion in 2019, according to the new study from Frost & Sullivan.
Although user attributes such as cookies and user IDs are available to advertisers, it may be counterproductive to use the data for ad targeting in mobile devices. Therefore, advertisers prefer to use non-personally identifiable information (NPII). Many companies offer opt-in and opt-out options for receiving ads through an SMS so that they do not infringe on user privacy.
The opt-in feature has given a huge thrust to the Brazilian SMS ecosystem. However, even though SMS represents 9.2 percent of mobile carrier revenue in Brazil, it will eventually make way for IM applications such as WhatsApp and Facebook Messenger.
"Owing to the rising popularity of mobile social media, mobile enterprise value-added-services such as A2P and SMS are being increasingly improved to enhance revenue and customer experience," said Frost & Sullivan ICT Industry Analyst Maiara Paula Munhoz.
Latin American brands are turning to mobile advertising not only because it reaches consumers on the go but also because it fulfils different requirements for different verticals.
National- or regional-level companies have a huge advantage over smaller companies in terms of resources for capturing, managing, analyzing and acting on Big Data. However, mobile advertising can help level the playing field, as even the smallest company can fill up as much space on a smartphone screen as a large company.
"To illustrate the potential of mobile advertising in Brazil, five out of ten countries most involved with social networks are Latin American," noted Munhoz. "Furthermore, Brazil is one of the top three countries with the most Facebook users in the world. This represents a huge market opportunity for companies investing in mobile social network advertising in the country."
