Mobivity Could Revolutionize Local
Advertising
By Ken Nagy, CFA
Mobivity (OTC Markets:
MFON
)
is a developer of marketing solutions and platforms for mobile
devices. The Company provides a suite of services and
technologies that enables brands, enterprises, marketers, and
content owners to engage consumers via their mobile phone and
other smart devices. Mobivity's solutions remove the complexity
of interactive electronic communications with consumers through
its suite of services and technologies. The growth of smartphones
along with the strength in the US restaurant industry should
create a tail wind for the firm. Mobile technology is in the
sweet spot of $136 billion local advertising market and poised to
take market share.
Response rates for text messages are far above their
traditional media counterparts.
- 95% of text messages received are read by the
recipient.
- Approximately 90% of text messages received are read within
6 minutes of receipt of message.
Local Advertising
The current local advertising market stands at approximately
$136 billion. Much of it local advertising is antiquated and in
the form of yellow pages, newspaper inserts, TV or Radio. These
advertising platforms are losing their effectiveness. The cell
phone stands to revolutionize this industry because Cell phones
travel with you. Your phone can be served with geographically
relevant ads wherever you are.
Taking a shot at Projections
Today Mobivity has approximately 5,000 clients paying an
average of $1,000.00 per year. The business model is a recurring
revenue model that has scale. So when the firm signs a franchise
deal it's possible to sign as many as 3500 individual stores at
one time, such as in the case of Sonic . If there are 500,000
viable places to eat in the United States and over time the
company can get a 20% penetration rate that could translate to
$100 Million in revenue.
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