2011 not the year for mobile marketing and location-based advertising?

3rd Jan 2011

Despite the hype, three trends that will not occur during 2011 are the take-off of mobile or location-based advertising and the removal of RFID tagging from retail items due to privacy and security concerns.

According to ABI Research, which is flying in the face of the usual flurry of predictions for the year ahead by publishing a report entitled ‘What’s NOT Going to Happen in 2011’, 2011 will not be the year of mobile marketing and advertising for a number of reasons.
Instead the volume of expenditure on the channel will continue to represent a small proportion of the overall market, which includes online and traditional advertising, for at least five years.
This is not least because serious challenges still have to be overcome. Clear measurement standards, although on their way, need to be established, there are too many platforms and consumers remain squeamish about privacy concerns. As a result, audiences are still relatively small, although growing as smartphone and tablet sales continue to increase, mobile budgets are puny and ad agency support is lacking.
The report said: “A better way to look at mobile marketing is to say it’s here to stay. It will grow and change. Already, marketers need to consider how to play in the tablet arena. Further out, they will face questions about how to exploit Augmented Reality and flexible displays.”
While marketing dollars will follow the increased adoption of mobile devices and “forward-looking marketers have good reason to spend some of their budgets on mobile”, eventually, it will become simply another facet of an overall marketing strategy along with ‘social’.
A similar argument applies to location-based advertising. As a result, although the market will happen as GPS systems continue to proliferate, app stores are set up, location information becomes increasingly aggregated and ad agencies successfully trial the technology, it is unlikely to take off in 2011.
The key problems here relate to the overall immaturity of the mobile advertising market as well as uncertainty over awareness and privacy issues as well as lack of clarity over which advertising techniques are likely to work.
As a result, ABI estimates that only 2% of on- and off-deck location-based services revenues will be generated by location-based advertising in the year ahead, although the figure will jump to 15% by 2016.
Finally, the report indicated that the RFID tagging of retail items would not be challenged by mounting privacy and security concerns.
While the discussion was real, most of the claims were not, although the industry would need to “forcefully” counter disinformation, which became particularly prevalent on web and social media sites after a hacking episode. As a result, user education was crucial to help consumers understand that a RFID tag could be removed or disabled after purchase, which meant that it was impossible to track them.

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