Economic downturn forces mobile ad spending cuts

Despite lofty projections [1] forecasting mobile advertising revenues exceeding as much as $12 billion by 2011, advertising agencies say their clients are instead targeting their spending on proven mediums like television and the Internet in the face of continued economic turmoil, The Financial Times reports. Ad agencies anticipate the worldwide economic downturn will negatively impact mobile spending until at least 2010, when clients are expected to increase their budgets.

Jean-Paul Edwards, executive director of futures at Manning Gottlieb OMD (a unit of marketing goliath Omnicom) said advertisers grow more conservative during tough times, and "retreat into what is most proven." The mobile platform does not fall into the category of proven channels, however: It "has had false dawns for several years. The current economic climate will push things back a bit," Edwards said. "If money is tight, mobile is not proven yet." Critics also cite the fragmentation of the mobile advertising marketplace as an inhibitor to future growth.

For more on mobile advertising's immediate future:
- read this Financial Times article [2]

Related article:
Forecast: Search will drive mobile ad [3] revenues