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Mobile phone advertising could make up 5% to 10% of global ad spending within five years, according to a Microsoft advertising executive.
Scott Howe, Microsoft's VP of advertising and publisher solutions, said the growth will be gradual, and it will be driven by improving cell phones and mobile data networks. A recent report from Ineum Consulting finds that the sector is expected to grow from $3.1 billion to $28.8 billion within five years.
"Mobile phone advertising is going to be one of the fastest-growing segments this year because it is growing out of a small base. The question is when does it really hit mainstream? That's probably still a year or more away," Howe told Reuters.
Mobile advertising has long been looked at as the "next big thing" because of the personal nature of mobile devices and the fact that many consumers always have a phone with them. Howe said he expects emerging markets to play a large role in the rise because citizens of many countries will have their first Internet experience through a cell phone.
The medium could be appealing to retailers of all sizes, Howe said, even those small shops that have generally avoided advertising online. The immediacy and relevance of location-based advertising could make mobile advertising especially appealing for retailers. He added, however, that the industry is still facing a few hurdles.
"The biggest bottleneck is going to be having enough case studies where major advertisers have done something really interesting in the mobile space," Howe said.
Microsoft isn't the only company that's eyeing the potential of the mobile space, as multiple startups such as AdMob and Medialets are cropping up to capitalize on the growing field. Microsoft's search rival Google also has big plans for the mobile market, as CEO Eric Schmidt has said he believes mobile advertising will one day generate more revenue than ads on the desktop-based Web.
With mobile devices taking on increasingly important tasks for enterprises, some companies may be facing trouble without a mobile device management plan. InformationWeek analyzed this issue in an independent report, and it can be downloaded here (registration required).