Business / Advertising boom

A future that's spammed by ads wherever we go

By Jules Quartly (China Daily) Updated: 2012-08-28 09:35

Follow the money and it's easy to see where the future leads: mobile advertising. Though it's rarely appreciated, if it wasn't for advertising, publishers would not be rushing online and the Web would likely resemble what it was originally conceived to be: A tool primarily for academics and militaries.

Whether we're talking apps or traditional publishing ventures, like news portals, blogs or websites, ads are what primarily make them profitable. And I would add that mobile advertising is in an analogous position to Internet advertising a decade ago, when everyone knew where the future lay but all the talk was about how hard it was to make money from the business. Then, Google started making billions.

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It wasn't from the "sexy" business of search, per se, rather it was from following the basics of advertising and acknowledging the almost divine power of algorithms and "Big Data". Google came up with AdSense for publishers and AdWords for advertisers, creating an industry standard.

In the world's leading market, the United States, 2012 is shaping up to be the first time that advertisers will spend more on Internet advertising than print advertising, according to a report from global market intelligence firm IDC.

A future that's spammed by ads wherever we go

As has been said many times before, the writing is on the wall for print and advertisers have recognized this by migrating in search of consumers - who are all online. This entails major growth in mobile advertising platforms, which are splurging out on advertising and tech companies to broaden their capabilities and reach.

In China, total revenue from Internet advertising in 2011 was 51.19 billion yuan ($8 billion), according to iResearch, surpassing print advertising and second only to TV ads. This was up a huge 57.3 percent on 2010 and the forecast for 2013 is a rounded-up 100 billion yuan.

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However, the nation's mobile ad spending is comparatively low when compared with market leaders Japan and South Korea, which are both devoting about 18 percent of their online ad spending on mobile ads. An eMarketer report puts China's spending at 2.7 percent.

While Japan and South Korea have mature markets, this relatively small proportion of mobile ad spending in China is at first hard to understand.

First, China has, or will soon have, more smart phone owners than anywhere else. Second, outside the major cities mobile phones are often the only way to access the World Wide Web in a cheap, convenient and effective manner. Third, considering the State monopoly on mobile telecommunications and more than 1 billion mobile phone users, it should be fairly easy to adapt to the new reality. And increased Internet speed is a must.

What is also holding China's mobile advertisers back is that of the 1 billion mobile phone users, just 144 million are smart phone users. So, this market has to grow fast to accommodate the future. Which it will.

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Again, Google appears to be leading the way, even in China, where traditionally it has fallen short. The company's AdMob division has doubled annual revenues to 1.8 billion yuan by providing ads based on mobile searches, playing games and watching videos. On the Apple platforms, iPhone and iPad, it provides five times more ads than its nearest competitor, according to iResearch.

Looking in the crystal ball, eMarketer is suggesting growth in China of 2 percent up to 2016 in terms of mobile ad spending. I think this is a low-ball figure. Chinese are quick adopters and it won't be long before domestic companies catch up with Google.

So, enjoy what you've got before it's gone. In my opinion, it won't be long before we are spammed out by ads on our phones, just like we are when it comes to magazines, TV and the Internet, or even walking down the street. Ads everywhere, basically. This is the cost of a consumer economy - where nothing is for free - and information is required.

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