A new report from the telecom analyst firm Berg Insight predicts that ad-based revenue models will have a profound long-term impact on the development of the mobile industry. “Traditionally, telecom operators have focused their attention on maximising revenues by managing network traffic”, said CEO Johan Fagerberg of Berg Insight in a prepared statement, “Now we have a different breed of players like Google who want to maximise their advertising exposure and revenues by generating as much traffic as possible. This force may prove formidable enough to disrupt the traditional telecom business model by shifting the focus from selling voice minutes to selling advertising space.”
According to the report, the greatest challenge facing providers of mobile advertising is the very low consumption of mobile media. Even though the research company estimates that there are close to 100 million mobile Internet users in Europe and North America, the vast majority of those only access mobile media a few times per month. “For the advertising business model to really work, there must be a massive surge in usage levels. If mobile media is to take 1% of the €230 billion EU and US advertising markets, the existing user base must become exposed to between 3–10 commercial messages every day. The industry has not yet figured out how to achieve this”, concluded Johan Fagerberg.