Smartphone sales boom, but SMEs should not rush into mobile advertising

Smartphone sales are on the rise in Australia but small businesses should not jump on the mobile advertising bandwagon just yet, advertising experts warn.

New figures from analysis firm GfK show that 215,000 smartphones were sold in the June quarter, compared to just 32,200 phones sold in the same quarter during 2008.

Additionally, the new figures also show that the value of each sale has increased by 600%, moving from an average of $743 to $855.

John Butterworth, chief executive of the Australian Interactive Media Industry Association, says SMEs should definitely look into mobile advertising, but warns the market isn’t fully developed.

“SMEs should enter mobile advertising in a very measured, careful sort of way. Mobile advertising is still relatively young, and 215,000 smartphones is still a small percentage of the phone market. But certainly there is an early mover advantage, because it’s mostly large brands that are doing advertising at the minute.”

“Look at it this way – mobile advertising is tracking the same way online advertising did about 10 years ago. It’s still early does yet, but you can see where everything is going. SMEs can talk to whoever handles advertising for them, and equally go to the Yellow Pages or White Pages, which are doing a lot at the moment in mobile. It’s all small steps first.”

Phil Harpur, Frost & Sullivan senior research manager, agrees that mobile advertising is one the rise, but also says the market isn’t fully developed and SMEs would get better results elsewhere.

“The main problem with mobile advertising is that it’s still very much a new market. You’re looking at about a three-to-five year timeline before it’s more mainstream compared to online. Admittedly, you do see a lot of companies which are doing some good things, but I think it’s very much testing the water.”

“Ultimately, don’t get into it quite yet. But if you do, you need to show the ability to offer something unique which isn’t necessarily a replication of online channels. I think there is really a sense of testing the waters right now. Once phones like the iPhone hit the average user, that’s when there’s going to be opportunities.”