Should you be investing more behind Mobile Marketing? With penetration of web viewing by U.S. Mobile users at 44% of home based web penetration, it’s not a trivial question.
In my frequent discussions with CMO’s, here’s the truth: few are spending much of anything on Mobile. Why? Is this just another example of big company CMO’s being conservative and behind the power curve?
The Theoretical Potential of Mobile
In theory, mobile should be the next big thing in Marketing. It’s highly personal, in-hand most of the time, and increasingly interactive with the advent of Smartphones, 3G and Apps. Mobile’s clearly not just about phone calls and text messaging anymore. In addition, it has vast advertising potential via contextual and geo-location capabilities.
3 Building Blocks for Advertising To Take Hold
Three things must be true for advertising to work in any medium. First, there have to be enough “viewers” using the medium for advertisers to be interested. Second, platforms must exist to deliver the advertising in an engaging manner. And lastly, advertisers need the capability to measure both the viewership and impact of the ads. All are necessary for new mediums to become a meaningful part of the broader advertising ecosystem.
Building Blocks — What’s Different Now?
Smartphones – Mobile penetration is so high, it’s scale is beyond debate. The more important question is: does it have Smartphone scale? Smartphone usage is growing rapidly in the U.S., with 21% of all wireless subscribers using an iPhone, Blackberry or other Smartphone (Source: Nielsen data). Almost half of respondents say their next phone will be a Smartphone, so its projected that by end of 2011, Smartphones will outnumber feature phones. This is important because Smartphone adoption will accelerate web and app usage, which in turn will increase mobile advertising.
Improved Advertising Platforms – Mobile advertising has many forms—SMS, banner ads on internet sites, on-line video ads, and search. I think the biggest untapped potential, however, is with mobile accessed on-line video and apps embedded ads.
On-Line Video: Nielsen IAG data clearly shows the superiority of on-line video ad versus banner ads and even linear TV advertising. Increasing Smartphone penetration, increased 3G/4G access, and more on-line video will bolster advertising opportunities for mobile accessed on-line video.
Apps embedded advertising is another opportunity — a whole new creative way to engage consumers. Apple recently announced their new iPhone based ad platform, iAd. iAd provides Apps developers an easy way to make money by building ads into their apps and sharing the ad revenue. iAd also keeps users viewing the ads inside the app, which should make the ad user experience better.
Geo Targeting – Increasing GPS and geo-location mobile features will create greater targeting opportunities. One of the more interesting entries in this space is a start-up called Shopkick, Inc. which has signed Best Buy and Macy’s Inc. for a new app that targets shoppers with special offers based on their proximity to relevant stores. Loopt is working on an ad service that will charge advertisers based on the cost per person served an ad near a store location, instead of charging a cost per impression.
Contextual Impact – As I’ve written elsewhere, content plays a powerful role in influencing advertising effectiveness. Content impacts ad effectiveness both through consumers engagement with the content (more engagement = higher recall) and by congruence of the advertising and the content, such as Travelocity advertising during “The Amazing Race.” Mobile advertising offers plenty of opportunities in both areas for improving ad effectiveness. For example, weather related web sites have high mobile usage, and are perfect for weather based products — e.g. Totes umbrellas, etc.
Measurement – Without measurement of both audience and ad impact, advertisers will lack a “currency” to value the mobile medium. To date, measurement has been focused on impressions and clicks – not a promising start.
The issue is that there’s not yet a common ratings currency across the 3 screens of TV, web and mobile. This makes integrated marketing communications planning difficult at best. Without this, it’s hard to know whether Mobile exposures are increasing viewer reach, duplicating the same viewers, or both.
In addition, measuring ad effectiveness on “clicks” or “click-thru rate (CTR)” is highly suspect. While these can be good intermediate measures of impact (e.g. a consumer clicked to subscribe to a newsletter, etc.), research from Nielsen On-line shows that CTR is not correlated with sales lift. For now, Marketers should assume that the same is likely true for mobile.
My Mobile Take – Create, Experiment, Learn
Mobile has huge potential, as evidenced by both Apple and Google’s forays into the space. However, most of the enablers aren’t yet fully formed, and measurement of audience and ad impact is still short of what’s needed.
That said, Mobile is so big and evolving so quickly that CMO’s can’t afford not to experiment and learn in this nascent, but increasingly important medium. My take: create a little, experiment more, and learn a lot. Just don’t bet your budget on it—yet.