Mobile Advertising's Next Barrier: Texts, iMessages, WhatsApp And More

An estimated three billion people use some form of messaging or chat app every day which certainly provides a lucrative opportunity for advertisers but according to Eric Sheridan of UBS, advertising on messaging platforms is "still at a nascent stage."

The analyst attended Ad Week 2016 and shared his thoughts in a research report on Friday. He noted that many conversations at the event, which brought together leading figures in advertising and marketing focused on the potential for mobile messaging to "evolve as a meaningful marketing channel," especially through chatbots.

Related Link: Cognizant Discloses Internal Investigation, Says Indian Plant May Have Violated FCPA

The analyst offered three key points based on his observations and conversations:

1. Chatbots could serve as "powerful, unified touchpoints" for consumers to integrate a wide variety of functions such as support, payment and CRM, among others.
2. Messaging apps could improve brand awareness and customer affinity, especially through the use of branded visual media, including popular emojis.
3. The effectiveness of mobile ads could be powerful when used in the right context, such as being delivered at the right time of the day.

In the meantime, brand marketers highlighted many key difficulties and barriers ahead, including a lack of measurement standards, a lack of access to customer data and a fragmented ecosystem of messaging platforms.

The Social Media Index ETF, Global X Funds SOCL, is up over 26 percent year-to-date, and relatively flat over the last five trading days.

Full ratings data available on Benzinga Pro.