Mobile providers looking to boost their revenues through content downloads and advertising are in for a rough ride, according to a new study by market researchers TNS.
While the vast majority (56%) believes that content downloads to mobile phones should be free of charge, there is a growing number of consumers that are so averse to advertising that they are now willing to pay a premium in order to avoid it.
A substantial 25% of respondents said that they would rather pay for a download if it guarantees them immunity from advertising.
This sentiment resonates most strongly with a younger demographic; 35% of 16 to 24 year olds are happier to pay for downloads than receive them with advertising. This compares to only 17% of 35 to 44 year olds. Mobile providers who don’t offer consumers the opportunity to opt out of advertising and instead pay for downloads, risk losing customers to competitors who do provide this option.
“With increasingly savvy consumers on one hand, and tough competition on the other, mobile operators are having to reconsider their current approach to generating revenue.
“The growing resistance to TV and online advertising has now been transferred to the mobile industry, and operators who ignore this negative sentiment are taking quite a risk”, said Amy Cashman, managing director of TNS Technology.
According to TNS, one symptom of this trend is the increased resistance to targeted advertising on mobile phones. Whilst 47% of people feel that adverts tailored to their individual tastes and interests are a good idea overall, half of those who were willing to receive targeted ads on the internet were not happy to receive them on their mobiles.
“Operators do need to treat their consumers as individuals more than ever before, but by improving the range of services they offer, not the range of [targeted] advertising. A premium subscription based model that sacrifices advertising completely, could be the solution. Operators might find that there is more of a market for this than they first thought”, added Cashman.
The recent mobile advertising report from GfK showed that 85% of mobile users in India, 51% in the UK, and 37% in the US said they receive advertising messages through their mobiles (see High Percentage Of Mobile Users Receiving Advertising Messages).
Text messaging remains the most common advertising format in all three countries, said GfK, with 74% of respondents recalling advertising in India, compared to 48% in the UK and 22% in the US.
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