Forecast: Mobile messaging ad spending to reach $7.4B by 2017

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Advertiser spending on mobile messaging is on track to reach $7.4 billion by 2017, fueled by an increase in location-based SMS campaigns, according to a new Juniper Research forecast.

Juniper cites SMS ads as low-cost option for advertisers seeking a broad customer reach, noting that a bundle of 1,000 text messages costs around $0.08 per message, dropping to $0.05 for larger bundles. "Sending adverts using mobile messaging gives advertisers a simple, cheap and effective way of reaching consumers," report author Charlotte Miller said. "Adding location technologies is an even more powerful proposition, particularly for transactional advertising as marketers can reach consumers who are near a location where they can purchase. Knowing that the recipients of an ad have actively asked to receive it and will in all likelihood open it is also particularly attractive."

While initiatives like location-based text ads promise to deliver a more relevant consumer experience, Juniper warns that advertisers run the risk of raising user privacy issues. However, the firm notes that mobile operators are sensitive to these concerns and have taken steps to guarantee that existing mobile messaging ad options offer subscribers the flexibility to opt in and determine what kinds of offers they wish to receive. Juniper adds that while mobile messaging ads will become more common as operators nurture new revenue streams beyond voice and data, it is unlikely carriers will embrace opt-out or compulsory models.

Juniper also cautions brands to consider all facets of their mobile strategy and guarantee that ads direct consumers to mobile-optimized sites or content. Looking beyond text-based ads, the firm also anticipates spending on in-app advertising will increase rapidly during the forecast period.

For more:
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