TV vs. Mobile — Which is the Future of Advertising ?

July 19, 2011

Unlike many conferences, the recent Spencer Stuart CMO Summit in New York featured a panel discussion of “protagonists” – people charged with being provocative and, well, protagonistic.

On the one side were the “Mobile is the Future” crowd. Included in this groups were representatives of Google, social media agencies and various change the world digital start ups.

Is the Future Mobile ?

On the other side were the TV is still the Future Luddites (me). I’m usually agnostic when it comes to media platforms–I only care about what works and why–but was charged with TV advocacy for this forum.

Mobile is the Future

Let’s let the Mobile crowd go first. They argued that Mobile is the future of advertising and marketing. Why?

  1. Mobile is Locational – Having the web at your fingertips at the 1st moment of truth will change everything. Transparency and knowledge will rule brands in the future. Want to know if there are lower prices on your item? Scan the UPC via Red Laser and find out prices in your area. Want to know if your car repair estimate is reasonable? Check out the RepairPal app.
  1. Mobile is Umbilical – Mobile phones have one really unique characteristic—they’ve virtually attached to their owners (except when they’re lost—but there’s an app for that too). This means that Marketers will have the ability to access consumers virtually anytime, anywhere—and most helpfully, when they’re engaged in activities most relevant to the Marketer.
  1. Mobile is Global – Forget the PC. In developing markets, consumers are moving directly from no web access to mobile web access. PC’s are old school. In India alone, there are already more than 500M consumers with mobile phones. The Mobile phone, and especially the Smart Phone, will be the direct route to global consumers in the future.
  1. Mobile is Embryonic – The vast majority of web sites are not yet designed for mobile. This leads to a sub-optimal consumer experience for most web applications. Wireless speed and quality are continuing to improve. The mobile experience will only improve as web sites are optimized for mobile and network speed and quality improve.
  1. Mobile is Closed Loop – The announcement of Google Wallet finally brings important players to the web payment space. The most interesting part of this story is that this will open up opportunities to connect “what people watch” and “what people buy” at the point of sale—a closed loop to prove marketing effectiveness at last.

It all sounds pretty compelling, doesn’t it? Until you realize that Mobile advertising today represents only ~1% of TV ad spend. Where’s all the demand?

TV Advertising -- (Still) the Future

TV is (Still) the Future

Marketers are clearly still voting for TV with their increasingly squeezed advertising dollars. Why ?

  1. TV is Impact – Numerous market mix modeling studies show that TV advertising continues to work—average ROI’s are in-line with digital and higher than print, couponing and other promotional activities.
  1. TV is Accountable – What do you buy when you buy mobile? Impressions—whatever that means. What did you get when you buy TV? Guaranteed audience, and if not, make goods. The fact of the matter is that TV is currently more accountable for audience delivery  than Mobile.
  1. TV will be Social – People love to talk about their favorite TV shows. And they love social networks. Social will increasingly come to TV, and when it does, there will be a big opportunity for brands to leverage the TV/Social interface.
  2. TV will be Targeted – The advent of “single-source” what people watch/what people buy panels and the ability to “fuse” psychographic and buyer behavior characteristics with TV consumption behavior is enabling TV advertisers to target on non-demographic variables in ways that were difficult before.
  1. TV will be Responsive – TV advertisers can now use tools to do “response based targeting.” That is, they can identify groups of consumers who best respond to their advertising, and then target these consumers more effectively without wasting dollars on non-responsive consumers. TV ad performance isn’t static, in fact, it’s only going to get better.

TV vs. Mobile — Which Will Win ?

So what’s the answer—will TV or Mobile advertising rule the future? If you’ve been reading carefully, you probably know the answer by now–it’s a false choice, a trick question. They’re going to both be important.

It’s actually a Marketers dream: even more effective, more targeted TV advertising PLUS the geo-locational and immediacy advantages of Mobile. It’s the intersection of these mediums that will define the future.

And what protagonist CMO wouldn’t want a future like that?

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Why Social + Mobile = Shopping

July 27, 2010

What happens when you take two hot growth areas—Social Networks and Mobile–and combine them with good old fashioned shopping? You get a phenomenon people are just now beginning to understand: the convergence of Social, Mobile & Shopping—let’s call it SMS for short. 

SMS - Social, Mobile & Shopping

 

What’s the SMS convergence? It’s the increasing ability of shoppers to use social networks to inform their shopping experience, access information about products, and broadcast their product experiences – all in real time via their mobile phone. 

Let’s look at the trends in Social Media and Mobile that are powering this convergence. 

Social Media Trends

  • Social networking penetration is increasing.  Facebook now has over 500 million users, growing its user base by +69% from 2009 to 2010.
  • Consumers are spending more time with social networking.  In the past 3 years, the average time spent has risen from 2 to 6 hours per week.
  • Social networks are mass.  There are now more people aged 50+ using social networks than people <50. They’re not just for students anymore—anyone can be reached thru social networks.

Facebook: Social Networking Growth

 

Mobile Trends

  • Penetration is growing. Within 10 years, there will be as many mobile phones in use as there are people on the planet.
  • Smartphones are taking over.  Smartphones are growing disproportionately fast. It’s projected that by the end of 2011, more people in the U.S. will use Smartphones than standard cell phones.
  • Usage is becoming more sophisticated.  With more Smartphones, come more apps. The average Smartphone user has 22 apps versus only 10 for regular cell phones.

Smartphone Penetration (image from Nielsen Wire)

 

How Social Networks & Mobile Intersect

The stats above probably confirmed what you already knew: Social Networking and Mobile are high growth areas. What you may not have realized is this: Social networking and Mobile are increasingly intertwined. Specifically, social networking apps are: 

  • #1 on the iPhone
  • #1 on the Blackberry
  • #2 on Android phones

It’s easy to see where this is all going. Social networking on Mobile is going to get bigger, more sophisticated and more enabled over the next few years. And this has some interesting implications for shopping. 

Social Networks & Mobile

 

Enter Shopping – A Social and Information Driven Activity

Social networks and Mobile are ideally suited for shopping. Why? 

First, shopping is a social experience.  People love to shop, but they really love to shop with other people. Unfortunately, this isn’t always possible. Enter Social Networking on Mobile. 

Second, shopping is about finding the right product at the right price.  This requires information. Consumers can access the opinions of their friends and acquaintances as they shop. And they can get real time access to valuable information—pricing, quality, etc.– about products and services. 

Third, people love to share their experiences with products and services.  Going forward, consumers will be able to broadcast their own shopping experiences via mobile, to both friends and others, and in close to real time. Had a bad experience with the service desk? Consumers will tell everyone they know—before they leave the store. 

Social Media & Shopping: Users Share Experiences

 

5 Actions for Marketers

The SMS convergence has numerous implications for Marketing organizations. Here are 5 to think about: 

  1. Brands must be open and transparent to win in this environment.  As I wrote in a previous post,  consumers are becoming more knowledgeable about your product and your company. The merging of Social and Mobile only accelerates this trend. Brands cannot afford to hide.
  2. Brands have an opportunity to improve their consumers shopping experience. Brands can now create apps and content that make their target consumers’ shopping experience better. Better could mean simpler, easier, more social, or any other improvement that’s relevant to their shopper.
  3. Brands must invest in creating Social CRM capabilities. Jeremiah Owyang has written extensively about the need for Marketing organizations to create social CRM capabilities. That is, to create a function to listen and engage with consumers in authentic dialogue about your brand.
  4. Brands can drive Social Shopping.  Making the buying process part of a social event is increasingly feasible. Disney recently created a Facebook app which enabled friends to buy movie tickets for the same movie. This is a great example of social shopping.
  5. Brands should experiment with shopping based App advertising.  The advent of Apple’s iAd system opens up a whole new advertising platform. This will create all kinds of new opportunities to advertise to consumers in context relevant ways. Imagine your target consumer walking into a store, snapping a photo of the UPC of your competitors’ product via a shopping app to learn more. Is this a place you might want to advertise?

SMS – Now or Later ?

SMS, like most changes, isn’t happening overnight. So, there’s always a tendency to say “it’s not big, let’s wait to see where it goes…” But the trends are clear and CMO’s need to pay special attention. 

It would be wrong to suddenly shift huge amounts of your Marketing budget into a largely unproven set of opportunities. Yet, the most prudent CMO’s will invest in a measured approach to learning what works and what doesn’t, and ultimately learn how to win in this nascent but increasingly important space. 

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Digitizing the 1st Moment of Truth

June 7, 2010

When I was the Marketing Director for P&G China, our Regional Head, A.G. Lafley (later the P&G Chairman and CEO), used to come to Guangzhou, China every quarter. Part of the “review” ritual was going on in-home visits and store checks. Naturally, these visits were less about CEO learning and more about making an important point to the local organization: the consumer is the boss.

Critical Marketing Consumer Touchpoint: In-Store Experience

The entourage trooped from kiosk to kiosk, always focused on issues like: Are we in stock? Are we shelved appropriately? Is pricing in-line with objective? And so on. Part of the ritual was the CEO making sure to take unannounced detours—just in case the stores looked too good to be true. But, of course, the core of the “1st moment of truth” was about physical in-store conditions.

In-Store Experience + Digital Information

No more. Increasingly, the future of the 1st moment of truth appears to be some combination of the in-store experience coupled with the digital world. Ask yourself this: how many times have you stood in front of a store shelf comparing products, but really wishing you had more information—any information—before making a decision? There’s clearly a big consumer need for relevant information at the store-shelf.

Today, there are a series of Smartphone apps which do exactly that. UPC driven, these apps bring social media to the store-shelf by helping consumers consider user reviews, social responsibility ratings, and other peer feedback—right at the 1st moment of truth.

UPC apps: Digital In-Store Experience

Why Is Digital at the Point of Sale So Important?

First, as I wrote in an earlier post “When Will Mobile Marketing Get Moving?,” it’s projected that by 2012, Smartphone usage in the U.S. will surpass that of feature phones. This means that before very long, most people will be able to download and use the apps at the point of sale. Scale is close at hand.

Second, these apps will increasingly include Social Media features so that you will be able to read product specific feedback from friends, family and peers—just before making your purchase decision. This could be enabled by Facebook Connect, built into the App itself, or by virtue of a separate Google Sidewiki application.

Facebook Connect: Allows Users to Interact With Brands In Real Time (Image from Mashable.com)

Finally, there are opportunities for these apps to create advertising applications that are geo-location or product specific. Since your GPS enabled phone will know where you are, and your UPC snapshot will communicate your category and brand of interest, this will provide a hugely relevant set of data for advertisers to use for targeting.

Apple’s recent announcement of iAd, coupled with their model of sharing ad revenue with app developers, are set to make advertising driven apps a whole lot more appealing and likely. It looks like app driven advertising is here to stay.

3 Digital Moment of Truth Apps

So, the trends are all in favor of these apps that marry the shopping experience with real time, important purchase information. What are some of the most interesting early apps in this space?

  1. ShopSavvy – How many times have you stood in front of a store-shelf considering buying a product but unsure as to whether it’s a good deal or not? 81% of Americans use their mobile devices while shopping — so they can find out. Around the longest, ShopSavvy has huge potential to play havoc with retail pricing — according to Ad Age, ShopSavvy reported more than 42 million scans last month. With ShopSavvy, you scan a product’s UPC, and the app then tells you the prices at other competing retailers (both in-store and online) for the exact same item.  If it is cheaper elsewhere, they’ll go buy it—retailers are sure to love this app.
  2. Sticky Bits – Launched in March 2010, Sticky Bits enables users to take a UPC photo and attach “bits” of content to it, creating a social page for the brand and UPC. Think about this for a minute: every product with a UPC can potentially have its own social media space—with all of the positive and negative potential that represents. Users can write reviews, attach comments, and generate any kind of user generated content they think is appropriate for the product.
  3. Good Guide – Consumers increasingly want to buy brands that not only work, but make them feel good about their purchase decision. A big part of this is knowing that the company operates in a socially responsible manner. Good Guide enables consumers to spot check your brand’s social responsibility with scores across the product’s health, environmental, and social impact. Good Guide simply continues a trend toward Brands needing to operate in ways that are more open and transparent.

Good Guide App: Product Knowledge for Eco-Conscious Consumers

The 1st moment of truth is set for big changes. The combination of the physical world shopping experience plus social media at the point of purchase promises to change the shopping landscape in a way that nothing has in a long, long time.

I haven’t talked with A.G. Lafley about this change (although I did talk with him recently), but I think I know what he would say: “the consumer is boss.” Meaning that the 1st moment of truth – what the consumer does at store shelf – is becoming even more important with the introduction of digital content.

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When Will Mobile Marketing Get Moving?

April 26, 2010

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?   

What is the Potential of Mobile Marketing?

 

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.  

Smartphone To Trump Featurephone Usage (image from Nielsen Wire)

   

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.  

   

Steve Jobs Talks iAD – Apple’s Mobile Advertising Platform

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.  

GPS and Geo-Location Targeting Create Advertising Opportunities

    

Contextual ImpactAs 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.   

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