UK consumers do not mind online ads

Brits are happy to watch advertising on the internet or their mobile phones if this means they will get videos, music or other content for free, a survey has found.

About 60 per cent of people polled by KPMG, the professional services group, said they would rather watch advertising on the internet in return for free content, rather than pay for it. Only 16 per cent of consumers said they would rather pay for content and avoid ads.

Even on mobile phones, 40 per cent of consumers said they would watch adverts in exchange for free music, while 28 per cent said they would do so in exchange for access to free instant messaging.

The figures send a strong message to companies that advertising, rather than subscription-based business models, are likely to work for internet and mobile content businesses in the UK.

"This willingness to view adverts in exchange for free content is good news for advertisers and is perhaps a pointer in the ongoing debate over whether advertising or subscription is the right revenue model," said Tudor Aw, partner at KPMG.

A number of advertising-supported internet music services have recently been struggling, as the economic downturn forces advertisers to retreat. SpiralFrog and Ruckus, two advertising supported music services based in the US, shut down earlier this year.

However, the KPMG study indicates that advertising on music sites would reach a willing audience.

When consumers did pay for content on mobile phones, they were most willing to spend on music and navigation tools. Some 34 per cent of UK consumers polled by KPMG had purchased music on their phones in the past year, the highest percentage in Europe.

UK consumers were reluctant, however, to pay for online books, online photo storage or social networking tools for their mobile phones.

"When considering how best to monetise mobile services, it is important for mobile service providers to be aware that there are notable differences in how consumers wish to access different mobile services," said Mr Aw. "Social networking – another big area of focus for mobile providers – is not a service people are prepared to pay for."

Use of mobile banking services, meanwhile, remains in the doldrums because of security concerns. Some 67 per cent of British consumers said they were uncomfortable with using their phone for any financial transactions.

Published by: Maija Palmer

Published 5th April, 2009

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