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Japan and South Korea Leading in Mobile Advertising

Globally, mobile marketing has been regarded as a new way to monetize services and develop new sources of revenue for mobile operators. Japanese and South Korean operators are building on existing technologies and consumer preferences to pioneer this new medium. By 2012, the total value of all mobile advertising and marketing will reach $1.2 billion and $684 million in the two countries respectively. With closely-targeted marketing using demographic data from existing mobile subscribers, mobile ads over phones are effective in reaching consumers who are open to receiving commercial messages.

Senior analyst Andy Bae of ABI Research says, “Japan and South Korea have almost the same market structures, value chains, and service applications. This is because mobile operators in both countries established their own mobile ad agencies to support operators’ business models for mobile ads. The relationships between operators and the affiliated mobile ads firms are close, in order to produce desirable business results.”

One of key reasons for mobile advertising’s market growth is the well-established range of 3G and HSDPA-based handsets available in both regions. Consumers in Japan and South Korea are well accustomed to accepting rich content advertising messages.

Compared with other regions, these markets are entering a new, advanced phase. SMS-based mobile ads are still mainstream, but consumers here are quite ready to accept rich format advertising that utilizes multimedia capabilities. More important, consumers sometimes regard SMS advertising as spam, so that some consumer-related companies are changing their advertising vehicle to MMS (multimedia messaging service), instead of text-based SMS.

Bae concludes, “Mobile search and gaming will be promising sectors for the next growth phase in these regions. Mobile operators believe that search results with location-based advertising messages could generate large revenue streams with gradually increasing usage by subscribers. Google and Yahoo are already implementing their business activities in the regions by cooperating with mobile operators in Asia.” [ABI Research]

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