The company released its “2010 Local Mobile Advertising & Promotions Forecast,” which identifies the initial allure for local business as being mobile couponing. In addition, Borrell says that local advertisers are ready to jump on the mobile opportunity much faster than they have with the adoption of the Web.

“For advertisers, mobile coupons offer a great ROI,” said Peter Conti, junior executive vice president at Borrell Associates, Richmond, VA. “Redemption rates are 10 times that of mail – or newspaper – distributed coupons.

“They can be changed out quickly and target consumers much more effectively,” he said.

Borrell Associates provides local advertising research and analysis, market-specific ad-spending data, consulting and sales training.

Mobile coupons are all the rage
The report shows how mobile marketing is set to reach dominant penetration levels faster than any medium before it.

According to the company, the fast increase is due in part to an existing installed base of mobile phones – that 80 percent of the population has – which is being exchanged for smartphones.

Currently, 31 percent of the population has smartphones, but that number is growing every day.

Mobile marketing reached $2.7 billion last year and is expected to grow 84 percent annually, hitting $57 billion by 2014.

“[What is surprising,] is that it is promotions, not regular advertising, that will dominate mobile and that mobile will grow faster than any other ad media in its first 10 years of household penetration,” Mr. Conti said.

“Mobile is the new disrupter in ad spending,” he said. “It will begin to erode ad spending in other media as it makes its way to being a $57 billion advertising business by 2014.”

The rise of mobile
According to Borrell, mobile advertising is already in the billions. Local mobile advertising hit $285 million in 2009 and is expected to double this year to $586 million, then spike upward to $4.7 billion by 2014.

Additionally, the company views advertisers’ growing love with coupons as a major key to the emergence of mobile marketing.

Text-based coupons are the fastest-growing and most obvious application that is also easy to implement, according to the company.

“The world of interactive media has become so complicated that media companies can no longer rely on just selling ads,” Mr. Conti said. “Many are morphing into a role traditionally held by ad agencies, acting as consultants, designers, researchers, advisers, resellers and, in the end, trusted lead generators.”