Frost in the US have produced an analysis of mobile advertising which estimates that today’s US$ 300 million per annum business will reach over US$ 2 billions by 2011. The cash will be used to subsidise content production and call costs for users.

About 15% of US mobile subscribers use mobile internet regularly. Mobile operators are reporting considerable uptake in usage of mobile video
services that can include advertising messages.

Unlike the online and the broadcast world, there is very little free content available for mobile phones. Unless some clearly perceived value is offered to subscribers, mobile advertising will be rejected.

Analyst Vikrant Gandhi tells us:

“The additional challenge is to deliver the advertising message in the most effective manner and according to the device capability and access options and a common and consistent reporting that spans multiple channels. The delivery of advertising message along with premium content on the same screen presents a challenge to the industry participants.”

The analysts think that mobile operators will work with partners to enable advertising with their own content inventory as well as third party sources. The ad inventory will be sold directly by the mobile operators as well as their partners, which will develop into pooling of multiple resources and a better penetration into the advertiser segment. Adoption of mobile advertising by leading operators is a significant development that will be critical to the success of the entire industry.