INSIGHTanalysis: Advertisers Gear Up For 3G

UK mobile operators have invested an estimated £22 billion in securing the licenses for the new 3G networks and are set to plough millions more into promoting the take-up of new services. The roll-out of this new technology, regardless of its speed or effectiveness, will inevitably affect mobile marketing and although consumers have thus far shown little appetite for the services on offer, advertisers are keen to assess their potential.

The latest wave of research from the VIPer consortium suggested that this will pay off, with almost 25% of upmarket consumers expressing an interest in 3G. Mobile phone penetration amongst the professional, middle and senior managers, who make up the business VIPers, is almost universal, with 90% of respondents owning at least one mobile phone.

Of those questioned, 7% said they are very interested in using 3G technology, while 14% claiming to be fairly interested. A breakdown of the profile of those interested in 3G revealed they are between 25 and 44, male, and more likely to be based in the North or the Midlands, than the South.

The implications for advertising Despite the encouraging level of enthusiasm, analysts have warned the industry that consumers may not automatically upgrade to 3G phones. Adam Daum, vice president and chief analyst at Gartner G2, claims: “The industry has been too obsessed with 3G technology to the detriment of the needs of consumers. The vast majority of consumers don’t know what their phones are capable of today, let alone what 3G is and why they should have it. It doesn’t matter how good 3G is if nobody knows or understands what they can do with it.”

Regardless of these problems, the new technology will certainly offer advertisers more creative ways to reach consumers via their mobile phones. Currently text messages are the only mainstream vehicle for companies conducting mobile marketing campaigns. However, Anil Malhotra, vice president of marketing and founder of mobile technology group Bango.net, predicts that the advent of 3G technology will signal the end for SMS marketing as we know it.

He said: “SMS is a limited service and within about 3 years we will see a significant decline in text messaging. You will be unlikely to see offline ads directing consumers to text a number, instead ads will give numbers which will link directly to the company’s website.”

It seems likely that 3G technology will strengthen the synergy between online advertising and wireless marketing highlighted by internet enabled WAP phones. Search targeted marketing company Espotting has already expressed an interest in using 3G technology to provide search results from local websites to direct users to anything from restaurants to shoe shops from their current locations. A spokesperson from Espotting commented: “3G is still in development and there are few usability studies to draw on at the moment, so we are waiting to see what happens.”

Advertisers looking to explore the potential of the new 3G network can look to Japan for an idea of things to come. 3G ad campaigns are starting to involve music and movie clips and interactive games, which have been a key revenue driver.

Despite the scepticism surrounding the launch of 3G phone systems, the VIPer research suggests that affluent consumers are interested in this new technology. However, brands will need to consider switching from marketing on a mass scale in favour of a more personal approach, to ensure that their campaigns are effective.