Mobile Ad Spend, Marketing On Hold for ’09?

The day after Thanksgiving, J.C. Penney customers were roused with a wake-up call. The service one might find at most high-end hotels was provided free of charge as part of a Black Friday mobile marketing push. Consumers were invited to go to and sign up for the call, along with SMS shopping tips and sales alerts.

The effort is a prime example of how the much-hyped marketing channel is helping companies like J.C. Penney, Subway and Coca-Cola  court consumers through their cell phones and PDAs. The only problem: The economy is in freefall, leaving some marketers leery of dumping dollars into an unproven medium.

Mobile has, in many ways, mirrored the evolution of online marketing. Experts touted it as the next big thing well before an infrastructure was put into place to support such grand proclamations.

The advent of smart phones, better cooperation from carriers and the consolidation of mobile vendors all have mobile poised to reach its vast potential—but it may take longer than expected.

While eMarketer projected mobile ad spending to grow to $2.8 billion from $1.7 billion in the coming year, many analysts see 2009 as the year mobile spending is put on hold.

Forrester Research analyst Neil Strother forecasts the segment will be flat or up slightly. “It’s still part of the experimental budget,” he said. “I’m not wildly bullish [about 2009].”

“I expect that we will see many marketers utilize their dollars for proven digital media and there will be a temporary reduction in spending for mobile,” said Laura Marriott, president of the Mobile Marketing Assn.

Many companies that have already invested in the medium will continue to spend, but “a whole lot of the companies that haven’t done it won’t jump in,” said Strother.

Brands such as Coke “that have so much momentum won’t be scared away,” said Nic Covey, director of insights for the Telecomm Practice Group at The Nielsen Co., which is Mediaweek’s parent. “Brands still sitting on the sidelines are there for a variety of reasons, not just expense. Any reluctance they have will be heightened in today’s market.”

Others are optimistic that spending in the channel will continue to accelerate, pointing to the fact that mobile is measurable and return on investment can be calculated unlike other media.

“In the current economic environment, smart marketing teams will likely move away from generic branding campaigns towards trackable, direct response channels, one of which is mobile,” said Jim Shilale, vp, business development at mobile-solutions provider 2ergo.

Tom Cotney, CEO of Air2Web, which has created campaigns for brands including Aflac and Wal-Mart, said, “Mobile is a cost-effective channel and will capture market share from more expensive marketing and communications channels during the downturn.” An additional benefit, Cotney added, is that it can be used to measure the impact of other channels including print, broadcast and out-of-home, making those spends smarter.

Text messaging makes up the lion’s share of marketers’ spend: eMarketer has it pegged at $1.47 billion for 2008. But display ads on the mobile Web are growing fast, per John Hadl, founder of BrandinHand, which counts Procter & Gamble among its clients. Entertainment companies make up 35 percent of current impressions, per Nielsen, followed by Web media companies (20.2 percent) and financial services (14.4 percent).

Mobile trumps other channels because it is personal, said Cindy Spodek Dickey, vp, marketing for mobile technology company Zumobi. “There was a survey that said 70 percent of people sleep with them. They use them in front of the TV, computer and even while driving,” she said. “Not to mention smart phones users are a highly desirable demographic in terms of disposable income.”