Mobile marketing is unlikely to really take off in Latin America in 2009, but the market will mature considerably, Terence Reis, Mobile Marketing Association managing director for Latin America, told BNamericas.
The executive said it is hard to predict which year will be the boom year for any industry, adding that market observers have been saying since 2005 that mobile marketing would take off.
"A year for something doesn't have to mean it will suddenly grow a lot. But rather that the product proves that it is not just an innovation but a reality. And if it gets to the point that the brands keep looking for it, that's already proved that it works," Reis said.
"I don't think that 2009 will be the year, but we will see some maturity. We're identifying the problems, we're identifying what we need to do and I hope we will see the problems being solved," Reis said.
The executive was speaking on the sidelines of the Mobile Monday telecoms industry seminar, held in Chilean capital Santiago, which specifically addressed the issue of mobile marketing.
According to Reis, Brazil has been the earliest adopter of mobile marketing strategies. In 2008, expenditure on mobile advertising in the country is expected to be some US$15mn, out of a total advertising expenditure of US$18bn. Advertising on the internet will be approximately US$600mn this year.
Website Emarketer predicted in October 2007 that the worldwide mobile advertising market would be worth US$16.2bn by 2011.
Growth, however, is likely to slow in 2009, given the global financial crisis; although, as long as the market keeps maturing and does not stagnate, that will be positive, Reis said.
Reis sees Chile, Argentina and Mexico starting in 2009 to boost marketing campaigns and to introduce banners on their mobile portals by the second half of the year.
Yahoo's OneSearch is already the default search tool for the region's two largest mobile operators, América Móvil (NYSE: AMX) and Telefónica (NYSE: TEF), and given the amount of Yahoo email accounts in Latin America, the internet portal said this year it was very upbeat about advertising potential.
MOBILE WEB
The US is one of the few countries where the concept really took off in 2008.
"In the US it has been proved. At the beginning of this year, it was behind, but during the year we saw more and more campaigns and now US users are sending twice the amount of SMS as the UK - which is one of the biggest markets in SMS usage. And 25% of the population is accessing the mobile web," Reis said.
For Latin America, access to mobile internet is going to be key, he added. Only in 2008 did many operators implement 3G platforms, and adoption has not yet taken off: about 2% of mobile users have mobile internet access.
According to Reis, mass adoption will happen when prices come down significantly. In Brazil, even the most basic mobile internet plans are still around US$30, which is twice the ARPU for the region.
Though mobile marketing campaigns can be carried out using basic SMS, which is already available for 100% of mobile users, campaigns will not be as effective until multimedia messaging (MMS) is more widespread.
"With MMS you can segment more and target better... it's all about the time the user spends with the brand and with mobile web, the user experience is much better. You can do many types of transactions, carriers can identify what you're doing... once we reach 50-60 % of users with access to the mobile web, it will be much better for mobile marketing," Reis said.
And the interest for receiving commercial-related content exists. An MMA survey showed that 29% of mobile users in Mexico, 34% in Brazil and 18% in Argentina were highly interested in receiving alerts on special discounts; an average of 40% were moderately interested.
PATIENCE
During the conference, operators said the challenges they face include user privacy issues and reaching some standardization on business models and best practices.
The MMA in Latin America has more than 70 members from Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru and Venezuela. The organization is working with players to develop a set of consumer best practices and a code of conduct and to organize events to help operators educate consumers about mobile marketing.
Reis believes that the types of business models adopted in Latin America will not differ greatly from what has been tried in more mature markets.
"I don't think there is much room for invention, we're not Japan or Korea. It will be pretty much the same as elsewhere: SMS, mobile web, banners," Reis said.
"We have a long road ahead. But I think that at the end of 2009, we'll look back and say we're on a roll and 2010 will be a good year," Reis said.
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