Despite the puffery behind wireless advertising, hawking ads via interactive and mobile devices won't be the slam-dunk sell that marketers once thought, according to a new study.
The non-PC advertising market--including mobile devices, interactive TV and Internet-enabled kiosks--will be an afterthought to advertisers in the coming years because of its small, fragmented U.S. audience, according to a new report from Jupiter Media Metrix.
Ad sales on such devices will reach an estimated $5 billion by 2005--less than a third of the estimated $16 billion for online advertising in the same year. Broken out, wireless advertising sales will reach $700 million by 2005 and interactive TV ad sales will reach $4 billion, the report said.
The estimates run contrary to sweeping optimism in the wireless ad industry, which is overflowing with technology companies hoping to deliver targeted ads to consumers via mobile phones, interactive TV and Net kiosks. But the industry faces high hurdles in the United States because consumers have yet to accept the idea of receiving promotions through the limited and captive space of a handheld device.
"Marketers that believe they can overcome the limitations of interactive and wireless devices as branding vehicles miss the point," Jupiter senior analyst Marissa Gluck said in a statement. "Post-PC ad opportunities are a need-to-have for a few categories of advertisers and only a nice-to-have for most."
To advertise effectively outside the PC, marketers will have to look at the consumers' needs vs. their demographics on various devices, Jupiter said. For example, consumers using a cellular phone are interested in receiving time- and location-sensitive information and will most likely ignore advertising.
Illustrating the point, a Jupiter survey showed that about 46 percent of consumers wouldn't accept advertising on their mobile phone or PDA in exchange for any type of compensation. But 36 percent said they would agree to accept ads in exchange for subsidized content or access.
Further stunting wireless advertising's growth, marketers will remain tepid on the medium because of a lack of industry standards and generally unclear results via such mediums, Jupiter said. Continuing popularity of the personal computer will also eclipse future spending on non-PC devices.