Mobile advertising offers a new and potentially revolutionary way to market a message. We examine how you can get a piece of the pie.

Many of these attributes would impress the most cynical of marketers. However it is exactly this level of intimacy that people share with their phones that means mobile advertising needs to be carefully considered. Inundating users with irrelevant and irritating marketing messages will only prove counter productive.

Online advertising revenue last year tipped the scales at US $36 billion, dwarfing the US $1.5 billion that mobile advertising generated. Consider, though, that while Google estimates the online population at around one billion, the global mobile market surpassed three billion subscribers this year. This is a market where mobile operators across 218 countries are adding new connections at the rate of 1.3 million per day.

In the Asia Pacific, the mobile phone is almost omnipresent with 1.4 billion mobile subscribers, it is the world's largest mobile phone market. APAC's 42 per cent global share almost equals the combined 48 per cent share of Europe and the Americas, and is growing at a faster pace, according to the ITU World Telecommunication/ICT Indicators database. Average annual mobile growth over the last five years has been close to 30 per cent, and with mobile penetration approaching 40 per cent, almost two out of five inhabitants in the region enjoy the benefits of mobile telephony today.

By mid-2008, China and India alone had over 600 and 280 million mobile subscribers, respectively, representing close to a quarter of the world's total, while mature markets like Singapore, Hong Kong and South Korea are near or at full penetration.

The real potential for the advertiser does not rely on the value of investment, revenues generated, or for that matter the scale of audience reach. The real value lies in the personal nature of the mobile handset, but this also gives rise to the need for mobile advertising to be considered very carefully. 

People regard the mobile as an extension of their personal self image - in terms of the device they carry, the applications and content they choose to access, use and share within their social peer groups. As a rule of thumb most will not welcome any intrusion on such a personal device, though there is an interesting exception. According to research carried out by Mediacells (2008) 94 per cent of 16-24 year old would welcome mobile advertising if it meant they would receive free airtime.

So a quid pro quo approach to mobile advertising should prove to be a winning model, at least for a younger subscriber. There is a careful balancing act to engage, but handled correctly it may be possible to circumvent the need to 'pay' the subscriber for accepting advertisements. Indeed the subscriber may see advertising as one of the more positive elements of their mobile experience, just as long as they are in control and the communications are in context.

To achieve this the key parties need to embrace new thinking that applies existing communication technologies to benefit both subscriber and advertiser -- carefully targeting the subscriber only when and if they are ready, willing and able to be marketed to.

Presence is best known as a tool that enables users to see who is online and who is not, primarily through Instant Messaging. Presence has developed into a series of predefined options -- on the phone, away, out of the office etc -- that provides context to communications. The ability to express mood through presence further adds context as to how to communicate with someone and what to say. If you know a friend is in a bad mood, you may want to ask them why? Alternatively you may wish to avoid them altogether!

As mobile Instant Messaging has been rolled out by the majority of network operators world wide, so mobile users have begun to experience presence in mobile. Presence is a useful part of mobile IM -- enabling people to see who is available and who is not -- indeed many would argue that it is a key progression from SMS and can deliver new and rich services for operators to market to consumers. 

Whilst the applications for Presence in person to person communications are clear, the broader applications are not always considered -- and this is where presences' application in mobile advertising could prove immense.

Naturally, there will be times when mobile users will not be interested in being advertised to at all. If you are in a meeting, the chances are that you will not welcome promotional messages about the latest offers.  However, there will be times when users may be open to receiving advertising messages if these are relevant and suitable.

An example might be a user that is going shopping.  If the user decides to set their presence to "Shopping" the network could then deliver relevant information and offers to the subscriber.  By combining location based information (either through GPS on the device or cell ID) intelligent and targeted advertising could be delivered.  Ultimately by combining demographic information on the subscriber, location and presence information, a mobile network could deliver promotional offers to a user at exactly the time they need these.  Furthermore the user is reassured that they are in control of their mobile experiences, that they are not about to be swamped by advertising spam in their 'personal space.'    This in turn delivers an interested and engaged audience to an advertiser.  Everybody wins.

Compare this approach to one that is often cited as a torch bearer for mobile advertising.  As the example goes, the user switches his Bluetooth on so he can receive a voucher for a cheap drink. It's simple, it is relevant, at least in a location sense, but if anything is even less smart than a stranger approaching you on the High Street with a flyer. They at least can engage in a basic selection process, assessing at least visually if the recipient is old enough to drink in a bar, or the right demography to fit in with the bar's regular clientele?

Correctly handled, advertising in the mobile space can be perceived as 'anti-spam', an unsolicited communication that is genuinely welcome by the recipient who will not only appreciate the advertising and engage with the brand, but will also act as a brand champion to spread relevant content amongst his or her peer group – attaining a viral nirvana for the brand.

By recognising the power inherent in presence services and mobile IM as part of a broader advertising strategy, operators can potentially reap greater benefits - from the ability to make power plays when negotiating with major brands, from direct revenue splits, and most importantly from delivering a relevant, timely, differentiated and valued service to its subscribers. The pitfalls are many but potential pay-off from mobile advertising for operator, advertiser, brand and subscriber is huge.

Allen Scott is general manager of NeuStar.