Text Messages Dominate the Tiny Market of Mobile Advertising, For Now

(MoneyWatch)  Currently, when it comes to pushing an advertiser's message to mobile phone users 160 characters still seems to be the best length. An eMarketer report out today shows that text messaging is by far the dominant medium for reaching out to consumers via their cell phones, while also showing that mobile advertising spending is still very much nascent. While seven out of ten people who have responded to mobile advertising said that a text message is what prompted their engagement, only one percent of American consumers said that text messaging was their preferred channel for opt-in communication.

Judging from a survey of online marketers, who should be the most responsive to mobile advertising's promises, many seem extremely wary of putting down the dollars for mobile advertising. While 35 percent said they would dabble in mobile advertising, 33 percent said they would hold off on mobile advertising, at least in 2008. Only four percent said they were heavily investing in mobile advertising.

Still, even dabbling means some ad dollars are flowing into the marketplace. Companies like PromoTxt or MoVoxx, with an exclusive focus on text messaging, should do well in the short term. In the long run, however, the rise of the iPhone and mobile carriers offering increasingly generous data plans means the text message's reign as king of mobile advertising is brief. As data plans loosen, and the options of consumers to contact each other through text via their mobile phones increase outside of the SMS increase (e.g. the Gtalk platform on the iPhone), the mobile marketplace will slowly shift away from the text message.

Much like with online advertising, mobile advertising suffers from both being over hyped and under served. Online and mobile will no doubt see significant increases in overall ad spending in the next few years. It's still unclear what exact medium the spending will be invested in.