Microsoft executive Scott Howe said mobile advertisements will increase to 5 to 10 percent of worldwide media spending within five years, with a gradual rise in adoption by companies and marketing agencies as a tool for extending their brands, according to Reuters. However, pushback from watchdog groups over mobile ads suggests that mobile advertising may meet further resistance.
executive is predicting that mobile phone advertising space will grow significantly
in coming years. However, past activity by certain watchdog groups suggests
that a greater focus on advertising via smartphones and other devices could
lead to increased pushback by public advocates.
"Five years from now, mobile will be 5 to 10 percent of media [spending],
but it won't happen all at once, it will happen gradually," Scott Howe,
corporate vice president of Microsoft's advertiser and publisher solutions group,
reportedly told Reuters while attending the Cannes Lions international
"Mobile phone advertising is going to be one of the fastest-growing
segments this year because it is growing out of a small base," Howe added.
"The biggest bottleneck is going to be having enough case studies where
major advertisers have done something really interesting in the mobile
However, groups including the Center for Digital Democracy and the USPIRG (U.S.
Public Interest Research Group) have pushed back in the past against what they
saw as advertisers using mobile devices to violate the privacy of consumers;
those previous actions could be a taste of what's to come if major companies
and advertisers move aggressively into the space.
A complaint lodged by the aforementioned groups in January alleged that
mobile marketers were utilizing techniques such as behavioral targeting, user
tracking and aggressive data mining to build profiles of 267 million mobile
users in the United States,
presumably planning to use that data to target them with ads.
Providers including Azuki Systems, Cellfire, Velti, ChaCha and Tanla Mobile
were cited in that complaint, which also quoted Google
Mobile Product Manager Sumit Agarwal as saying the mobile phone would double as
"the ultimate ad vehicle."
Google responded to the report at the time through a spokesperson, who said,
"Whether it's for a desktop or for a mobile platform or device, we design
products that give users meaningful choices about how they use our services and
what information they provide to us."
The Google Android operating system for smartphones will make its
international debut in 2009, with Android
mobile devices planned for release in Canada and China.
As companies figure out how to best develop-or exploit-ads for mobile
devices, conflict between watchdog groups, the FTC and IT companies will likely
In the meantime, Microsoft has been devoting its energies to earning more
market share in another advertising-rich segment, search, through its new Bing
Bing, which combines traditional search, providing pages of hyperlinks, with
specialized tabs such as "Shopping" and "Images," has
gained strongly in the weeks since its June 1 release, according to analytics
companies such as ComScore.
According to ComScore, Bing's daily penetration among U.S.
searchers increased in the search engine's second week by 3 percentage points
to 16.7 percent, while Microsoft's share of search result pages in the United
States increased 12.1 percent, a rise of 3
percentage points from the week before Bing's release.
Echoing earlier comments from Microsoft CEO
Steve Ballmer, who took a cautious but optimistic position on the search engine's
initial success, Howe told Reuters regarding Bing that, "As long as we
continue to make progress, we will get where we want to be."
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.