The future of advertising is mobile. It will come as no surprise that despite the objections and claims from print publications and other off-line advertising mediums around their continued relevance and value to brands, an increasingly larger proportion of advertisers’ annual budgets is going towards mobile advertising each year.

Indeed, recent figures detailing global advertising spend from a 2017 eMarketer report highlighted that spending on paid media worldwide would increase 7% that year, to $584.14 billion, and that this increase was mainly driven by investment in mobile advertising formats.

In the same report, eMarketer documented that mobile advertising spend would be $142.78 billion in 2017, a rise of 33.6% from 2016. Big brands are constantly looking for ways to reach their targets and new audiences, both in terms of the content they put out there and the platforms they adopt.

The mobile experience

As consumers continue to spend more time on their devices browsing the internet and in apps, brands need to find smarter ways of accessing millions of untapped screens. It’s true to say that Asia leads the way in terms of innovation and trailblazing new technology.

That said, other regions aren’t complacent and standing still when it comes to innovation. For instance, we’ve seen a lot of news from mobile operators around the globe in recent weeks detailing relaunches for advanced Rich Communication Services (RCS) designed to give users a more experiential, multimedia experience from their messaging platforms.

The key challenge for mobile operators is one which has been prevalent for many years – that of monetizing these messaging platforms and apps, as well as providing users with the type of experience that competing providers have achieved.

There is, it seems, a timely opportunity to utilize the appetite of advertisers and big brands to access a greater volume of targeted mobile screens, whilst also meeting the high demands of users for that all-important, multi-layered, multi-media experience on their mobile.

Mobile operators

It is a fact that mobile operators have experienced diminishing average revenue per user (ARPU), high churn rates and reduced customer loyalty in recent years.

Why? Because demanding, cost conscious mobile users were quick to trade in traditional messaging platforms and operator services for over-the-top (OTT), instant messaging (IM) which was provided using the internet and therefore free-of-charge, whilst the mobile operators have had to invest in the network infrastructure and the associated costs.

That said, SMS is still widely used and increasing, with mobile operators now offering messaging as a free service. Additionally, the use of Application to Person (A2P) messaging has been highly successful and is increasing; providing many different organisations with a secure and reliable communications channel – how many of us now get text messages to remind us about appointment times or deliveries which are on their way?

This is because SMS has proven to be a trusted channel of communication for businesses to provide information to their customers, as well as being ubiquitous unlike the various IM platforms which vary according the users’ personal preferences and use.

Fast-forward to the present day and there is now a commercial imperative for mobile operators to find ways of monetizing their messaging platforms and apps.

The point is perhaps best encapsulated in a recent report by the Economist Intelligence Unit (EIU) which found that mobile operators will face a profitability squeeze in 2018 as they attempt to balance the investment required to satisfy demand for 4G and 5G mobile connectivity and cost, with a growing number of competitive threats.

Not only this but savvy consumers are becoming more aware of the value of their user data and will, undoubtedly, become even more demanding towards their mobile operators when it comes to obtaining user incentives and discounts from their mobile network provider.

Next-generation mobile advertising

Mobile users already accept the addition of digital advertising, be it in the form of banner ads, sponsored content, pop-ups, mobile videos, branded surveys and the list goes on, provided they feel either the mobile experience is one which they really enjoy, or there is a financial or material advantage to them of accepting the advertisements on a particular platform – often it is a mix of both.

Additionally, it almost goes without saying that data is driving increasingly acute personalisation and relevancy of adverts to a level which has never been seen before, from alerting someone when there is a sale on in their favourite shop to remembering important dates like birthdays and anniversaries, so the addition of in-app advertisements has benefits beyond financial for many.

Mobile operators have arguably the best data on mobile usage available today but they need to grasp the opportunity to fully monetize this – especially bearing in mind the revenue squeeze predicted by the EIU in 2018.

Highly targeted and unobtrusive digital adverts within messaging conversations, along with monetization of apps including customer care, money such as wallets and payments, internet TV offered via mobile and IoT apps such as smart home, wearables and smart retail could provide the answer.

Indeed, having moved on from the days when poorly targeted digital adverts were more of an annoyance than a benefit, today’s technology can offer mobile users an enhanced profile, preferences and data-driven experience which delivers real value.

From the user’s perspective, their data is power, and they should make the most of the airtime they are willing to offer advertisers in the form of preferential mobile contracts, user incentives and better handsets in return for accepting this new wave of advertising content.

In a world where the lines between desired content and advertising is well and truly blurred, why wouldn’t you monetize, in whatever form that might be, your precious data and have the added benefit of highly targeted and lifestyle enhancing content from brands you are already interested in.

2018 will be an interesting year for mobile – with mobile operators under more pressure and facing financial challenges.

Innovation will be key to their survival as B2C providers and although we have already seen some mobile operators looking to partner with OTT providers in a bid to win back market share, the more exciting play will be in technology deployments which enable them to regain the upper hand to win back that all important customer loyalty, drive additional revenue and boost profitability.

Graham Williams is CEO of Cloudbanter.