Mobile advertising and marketing: A study of how location-based services is developing the mobile advertising eco-system and its business models

Abstract: Purpose
The goal of this research study was to examine the current state of mobile marketing and advertising. With focus on how location-based services currently transforms the mobile advertising ecosystem and its associated business models.

Method
The research study was conducted in association with different market leading industry actors, residing from diverse ends of the mobile advertising value-chain. This provided a broader spectrum for the study and the research questions sought answers to. The gathered empirical data was compared with existing theories providing possibility for further analysis and ultimately to draw conclusions for the research questions.

Conclusion
The research study concluded that location-based services will play a pivotal role in the coming years for mobile marketing and advertisement, both from the application perspective but also from mobile search integration. The market of location-based advertising is currently in an early stage, but shows high growth potential. The research study also concluded that location-based advertising follows the theories of regular mobile advertising, with the main exception that everything revolves around location. This provided difficulties for the parties involved, since location adds geodata that can that enable identification of specific end-users, as in the location gate scandal. To overcome this dilemma actors clearly- and openly reveal their strategy, on geodata harvesting. The geodata is collected either with the possibility to identify end-users, in an anonymous way or no harvesting at all. The applied business models are adapted from those of online advertising, the empirical data though showed that the industry is switching towards a more transaction-based business model aside from the exposure business model that is currently serving the majority of the mobile medium.