Mobile Apps May Boost Ad Revenue

Newest iPhone app for eBay users shows the possibilities.

by staff writer
- Aug 14, 2009

Blackberries, iPhones and Palms could give online advertising the boost it needs, reports one Citi Internet analyst.

Advertising revenue dropped for the second quarter in a row during the first half of 2009 to $13.9 billion, according to news reports. And while some experts say revenue may not increase until 2010, one analyst says it could be sooner, and mobile apps might be just the thing to kick sales back into gear.

"Advertisers are seeing a 10-times increase in click-through via mobile devices," writes Erick Schonfeld of TechCrunch, a technology news site. "Mobile search activity is ramping fast this smartphone summer, and ad dollars are following."

In fact, retailers should spend 20 percent more on advertising during the second half of this year, a 17 percent increase compared to the first half, he says.

The possibility of mobile applications helping to drive advertising revenue is not that far-fetched. Several new smartphones were recently introduced, and technology companies are investing in new tools for users. For instance, Apple recently beefed up eBay Mobile, an application that allows eBay users to bid on items, check prices and answer buyers' questions. The iPhone app now also notifies buyers when someone has outbid them and when auctions are ending.

Integration with PayPal even lets buyers pay for items using mobile devices.

"eBay Mobile, one of our favorite iPhone business apps, just got better," writes Jeff Bertolucci of PC World.

The application is already in Apple stores, according to news reports. And as people become more familiar with this and other mobile applications, advertising on mobile phones should increase, experts say.

Apple's mobile advertising has increased at an average of 45 percent a year, according to Reuters. But advertisers will have to be careful not to annoy customers.

"If you are interrupted every two minutes by advertising, not many people [will] want that," David Kenny, managing partner of a French advertising group, tells Reuters. "The industry needs to work out smart and clever ways to engage people on mobiles."

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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