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Mobile Advertising Report (US)

4th Quarter 2008

Private & Confidential - Limbo, Inc. January 2009

What is the Mobile Advertising Report?

More people in the United States (and indeed globally) have a mobile phone than an Internet-connected PC.Consumers are quickly emigrating away from pay-per-use mobile services and are heading toward free-to-end-user services that are supported by advertising. Coupled with a fragmenting media landscape, advertising-supported, free-to-end-user services createexciting opportunities for brands to reachconsumers in ways never before possible. The

Mobile Advertising Report

is a tool to helpmarketers and their agencies understand thisfast-changing medium. To receive the mobilemarketing report, email

mar@limbo.com.

The

Mobile Advertising Report

is produced by Limboand GFK/NOP research. The Q4 2008 (US)report is based on a survey of 1,000+representative adults in the US.

Mobile Phone Usage

There are more than 271 million mobile phoneusers in the US – up from 251 million in Q4 of 2007 (an 8% increase). Text messaging (SMS)remains the dominant data service used by USconsumers. More than 162 million consumersused text messaging in the fourth quarter of 2008. This was a 16% increase over Q4 2007 –double the growth in the overall market.For the first time, the mobile advertising report compares iPhone users against non-iPhone users. As seen in theabove chart, iPhone users use significantly more services on their mobile phones. iPhone users are more thantwice as likely as non iPhone users to browse the mobile web on their phone. They are more than three times aslikely to use a Location Based Service (LBS) such as a map, a friend or restaurant finder or a location basedsocial network.This report also tracksthe use of LBS for thefirst time. One in ten USmobile phone users useda Location based Servicein Q4 2008, rising to onein three for iPhone users.Interestingly, LocationBased Services do notseem to have penetratedthe 18-24 market, whereonly 4% of consumershave used theseapplications. This risessteeply to 22%penetration in the 25-34age group. Incomparison, SMS is used by at least two thirds of all mobile consumers in the 18-50 age segment.

Mobile Advertising Report (US)

4th Quarter 2008

Private & Confidential - Limbo, Inc. January 2009

Mobile Advertising Penetration

33% of mobile consumers recallseeing Mobile Advertising in Q4 2008 – rising to 41% for iPhone users.The vast majority of these ads wereseen in SMS text messages. One infive consumers recall seeing ads inthis format. They are more than twiceas commonly recalled as mobile webads – the second most common.Significantly fewer consumers seeother formats – unless they have aniPhone. iPhone owners are twice aslikely to see mobile web ads and four times as likely to see an ad whileplaying a game on their phone or while using a Location Based Service.For iPhone users, SMS, mobile weband in-game ads are all equallyrecalled. Mobile TV and Radio adsalso receive significant boost amongstiPhone users. 7% recall seeing amobile TV or video ad, 11% recall anad on a mobile radio service.Men and women are equally likely to recall mobile advertising. Consumers aged 25-34 are the most likely to seemobile ads. African American and Hispanic mobile consumers are significantly more aware of mobile advertisingthan Caucasians.

Mobile Advertising Report (US)

4th Quarter 2008

Private & Confidential - Limbo, Inc. January 2009

Response to Mobile Advertising

For the first time, The MobileAdvertising Report looks at howconsumers respond to mobile ads.One in three consumers that recallseeing a mobile ad state that theyresponded in some way. This risesto one in two for iPhone users.The most common means of response is to call a toll free phonenumber published in the ads. 16%of ad-aware consumers recalldoing this.Visiting a mobile website is thesecond most popular response –one in seven reported doing this.Perhaps most encouragingly for advertisers is that fact that one inseven people also reported thatthey had bought a product or visited a store as a result of seeinga mobile advertisement. For iPhone users, this was the second most stated response – over one in four iPhoneusers who saw mobile advertising bought something as a result in Q4 2008.The propensity to respond to mobile advertising varies widely amongst different consumers. Women are 85%more likely to respond to ads than men. Younger consumers (18-24) are also the most likely to respond – twiceas likely as those aged 25 and over. African American and Hispanic consumers claim they are three times aslikely as Caucasians to respond to mobile advertising.