The $16 Million Sweet Spot of the Mobile Revolution

Jun.23.11 | About: Hipcricket, Inc. (HIPPQ)

On Monday, I officially pegged the exploding use of mobile devices as the biggest technological trend ever. I ran down 10 statistics that prove it, too.

But that didn’t impress everyone.

As one reader chimed in, “Big whoop, Lou! A compelling growth trend means nothing unless you tell me which companies are in the middle of it.”

Fair enough. So today, as promised, I’ll detail the growth that’s occurring in one of the biggest areas and highlight a company whose sales are consequently soaring.

Let’s get to it…

The Dawn of a New Advertising Era

There’s an old saying that “advertising always follows eyeballs.” And with over 100 million smartphones sold each year, all eyes are clearly flocking to mobile devices. Hence, advertising is following suit.

Over the next three years, Gartner expects mobile advertising to jump by an average of 50% per year.

What’s that in dollar terms?

On the conservative side, we’re talking about a $500 million market ballooning to almost $3 billion. And on the more aggressive side, ABI Research pegs the mobile ad market at $29 billion by 2014.

Despite that large discrepancy, there’s no doubt that we’re talking about a hyper growth market (mobile advertising) within another hyper growth market (mobile technology.)

And the best news? It’s only just starting…

Crank Up the Mobile Marketing Machine

Last year, a Forrester Research survey found that only 20% of retailers used mobile marketing strategies. But more than 40% of the non-users planned to implement them shortly.

Even foremost industry insiders, including Google CEO, Eric Schmidt, recognize the impending transformation. He said, of the mobile advertising explosion, “It’s happening and it’s happening faster than we predicted.” He should know, too, considering that Google acquired mobile ad company, AdMob, in late 2009.

The question is: How do companies harness the power of mobile marketing?

One company in the sweet spot of this growth area is Augme Technologies (OTC BB: AUGT.OB).

The company’s AD LIFE mobile marketing platform gives advertising agencies and companies a way to plan, create and track their marketing efforts. AD LIFE is unique from other platforms in that its patented technology automatically adjusts marketing content to fit various mobile devices. And with so many different devices out there, this is a huge benefit.

Top-tier companies know this, too, and Augme’s client list includes heavy hitters like Johnson & Johnson (NYSE: JNJ), Kimberly-Clark (NYSE: KMB) and Pfizer (NYSE: PFE).

So while shares have come under pressure lately, Augme holds the distinct advantage of being a first-mover in a multi-billion-dollar market. In other words, it benefits from limited competition in an unmet area.

And you can see how the industry’s growth is affecting the company’s performance. In early June, Augme announced that its fiscal first-quarter (which ended May 31) sales should bounce 325% higher. And full-year sales should more than quintuple to $16 million.

Bottom line: There’s a reason why I called the mobile revolution “the biggest tech trend ever” in Monday’s Wall Street Daily column. Make no mistake… this trend is here… it’s real… and it’s only set to grow exponentially over the coming years.