Sprint 4G phoneThere’s lots of buzz around consumer adoption of 4G wireless service, but what about how the shift to 4G will impact mobile content and advertising? Connectivity research firm Yankee Group has a list of predictions for the most significant developments around 4G in 2011. Some are relevant to marketers.

Broadly speaking, 4G wireless service is faster than anything currently available on a broad scale. This means 4G networks can support greater multimedia streaming, among other advancements.

Carriers in the US and abroad are upgrading their networks with the technology, but Yankee Group forecasts that less than one percent (0.04%) of all mobile lines will run on 4G next year. Yankee Group 4G prediction

That said, the firm expects 4G to be a market disruptor in the
long-term. Here are the near-term predictions: 

1. Competition in the U.S. will create a 4G marketing mess

4G marketing across multiple technologies is creating a lot of hype and confusion in the U.S. Expect subscriber take-up to suffer in consequence.

What exactly is 4G?

Yankee Group found that two-thirds of the US mobile population doesn’t know what 4G is; half don’t even know what 3G is. The US market needs to be educated about 4G, why it’s better than
the existing wireless service, and how much it should cost.

But don’t expect the carriers to do it, since it’s not in their best interest to explain the nuances, and why they may be charging for 4G service when they aren’t truly delivering it. (For some US carriers, they’re substituting 4G with LTE – or long-term evolution – and WiMAX service, neither of which is as fast.)

All in all, it spells a mess for consumers, operators and the device manufacturers who will quickly confuse users if they add a “4” to the name of any new device.

2.    4G users will spend twice as much time on the mobile
Web as their non-4G counterparts

4G will boost mobile browsing in the same way that better 3G network coverage (and devices that take advantage of the speed) has increased mobile content consumption.

This means more mobile impressions, page views and unique visits for publishers and advertisers. Yankee Group predicts that mobile web browsing will even overtake the current “app mania.”

Based on the faster and more responsive mobile Web experiences provided by 4G, we further predict Web browsing will continue to dominate consumer 4G network use, comprising more than 75 percent of all consumer network requests on 4G and exceeding the request rates of audio, video and mobile apps.

Publishers that have been solely focused on launching apps may need to focus more on their mobile websites, and app-based ad networks could see a dip in mobile ad marketshare.

3.    Mobile video will not drive consumers to 4G

Just because 4G makes high-quality mobile video more of a reality, doesn’t mean that consumers will flock to it. Lack of viewers will lead to diminished advertiser interest – and companies that have invested heavily in mobile video platforms may go belly up.

The losers will be those companies that have spent millions to develop pay mobile video platforms that largely go unused through 95 percent of a 4G user’s day. Companies such as Flo TV have already gone bust; expect more to join their ranks as unpaid video distributors such as YouTube continue to dominate the majority of 4G video usage.

4G will reduce constraints on mobile bandwidth, which Yankee Group says will lead to increased usage of streaming music services like Pandora and Slacker. Advertisers may be more interested in running campaigns on these services as a result.

4.    Say goodbye to tiered pricing

All-you-can-browse data plans have helped drive the growth of mobile web usage, but in a manner that’s unsustainable for networks. (See: AT&T’s hard iPhone lesson.) With 4G, the carriers will make tiered pricing – or billing according to bandwidth usage and network speed – a reality.

Yankee Group sees this as a positive in the long run:

The end result of this pricing innovation is that 4G users, unlike most of their 2G and 3G counterparts, will learn to live with customized and tiered data packages. Insistence on flat rate will give way to acceptance of “you get what you pay for.”

As a result, 4G pricing—unlike that used for most 3G services—will enable rich and sustainable user experiences and a model that is economically sustainable for network builders.

In the short-term, however, consumers that are faced with monitoring how much mobile bandwidth they consume may choose to limit themselves for fear of being charged overages. This could lead to less browsing on 4G devices than on 3G devices with unlimited billing plans.

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