Brands should allocate more spend to mobile this holiday season: panel
By Dan Butcher
September 3, 2010
NEW YORK - More spending is shifting from traditional channels and online to mobile, although many brands are not going far enough in that direction, according to a panel at the Mobile Marketing Summit.
Close to $600 million will be spent this year on mobile advertising, while the comparable numbers for mobile commerce are anyone’s guess. Given mobile’s short history, there is little precedent to determine allocation of funds for mobile campaigns or mobile commerce efforts, but those decisions have to be made as more consumers start interacting with ads and buying through smartphones and tablets such as the iPad.
“Mobile is consumer-lead rather than brand- or agency-led,” said Joe Meyer, CEO of HopStop, New York. “Last year at this time less than 5 percent of our usage was mobile, and it drove zero percent of our revenue.
“Now, 20 percent of the usage we see is mobile, and 10 percent of our revenue is mobile,” he said. “Monetization is still trailing usage, but the gap will close.
“With mobile you have a much more engaged audience that is much more likely to take action—share of voice is so much higher in mobile, and there is more exclusivity that leads to performance.”
Mr. Meyer said that the majority of campaigns running across HopStop’s mobile properties are performance-based.
Brands and agencies have run large Web-based campaigns with HopStop typically allocating anywhere from 5 to 10 percent of their spend to mobile.
“We’re pushing for more than that because we know that it is such an engaged experience,” Mr. Meyer said. “Mobile campaigns are 10 times as effective as PC Web campaigns.”
HopStop reports that mobile click-through rates typically hover around 5 percent, which is significantly higher than online averages.
“There are a handful of advertisers that want mobile-only campaigns, app or app plus WAP, and once they do, they don’t go back to the PC Web,” Mr. Meyer said. “They go for what works, and it is the advertisers that have fully embraced mobile that get the biggest bang for their buck.”
Mobile spend growing
The panel moderator Lindsay Woodworth, director of marketing at 2ergo, Washington, cited a prediction that mobile ad spend would grow 125 percent between this year and next year, and asked the panel if that figure sounded accurate.
The panelists were unanimous that 125 percent sounded conservative to say the least.
“Growth in mobile spend is a consistently underestimated number,” said Paul Gelb, director of mobile practice at Razorfish, New York. “Mobile is an extremely new channel—the Web had about 10 years to ramp up their sites and infrastructure, whereas mobile has ramped up in two years.
“While the actual ad spend numbers seem a bit low, the spending increases are 10 to 40 times what they’re now investing in the mobile channel,” he said.
Gretchen Scheiman, partner and associate director for digital dialogue at OgilvyOne Worldwide, New York, noted that while 125 percent growth is great, the base number it started from was not huge.
However, Mr. Gelb, for one, is optimistic that brands really are starting to get it, and that their mobile spend is starting to get there.
“Mobile is most functional device in history, giving advertisers the ability to provide an experience with utility to users and branding via experiential messages,” Mr. Gelb said.
“You’re dealing with users for whom the most valuable thing to them is time, and if you’re able to provide a time-saving or more pleasurable experience in a limited amount of time, that can lead to direct response and a branding reward,” he said.
“This year, unlike last year and the year before, mobile is becoming a significant part of the process because it has outperformed expectations.”
SMS, app or WAP?
There was a raging debate on the panel when the question of where a brand should focus its efforts in the mobile space.
Dave Geipel, chief operating officer of QWASI, Exton, PA, and Gowri Shankar, president/CEO of SinglePoint, Seattle, extolled the virtues of SMS due to the fact that it has the largest reach of any mobile channel.
Text messaging also offers brands the opportunity to build a database, drive foot traffic and inspire loyalty via mobile coupons and create a two-way dialog with consumers.
HopStop’s Mr. Meyer was a proponent of the mobile Web, saying that it has greater reach than applications and it is easier to monetize than SMS.
Alexandre Mars, CEO of PhoneValley and head of mobile at Publicis Groupe, Paris, favored a balanced approach including all of the above, depending on each individual brand’s overall marketing strategy.
Caitlin Remby, New York-based East Coast head of sales at Navteq Media Solutions, said that in the case of SMS, the mobile Web and applications, location-based targeting makes mobile advertising more relevant and actionable.
Thom Kennon, vice president of strategy at WPP Group’s Wunderman, New York, agreed with Mr. Geipel and Mr. Shankar that getting consumers to opt in to a database via SMS was a powerful first step for a brand.
However, he also agreed with Mr. Mars that a brand should not just dip their toe into mobile, but embrace mobile fully. Focus on how mobile can achieve brand goals, rather than on the specific channel.
“We are in the midst of a revolution,” Mr. Kennon said. “Mobile is going to fundamentally change the way brands interact with and acquire customers.
“Mobile delivers an incredible opportunity to do brand advertising, direct response, commerce, CRM, drive to retail—a whole range of things using a single medium,” he said. “In a discussion of tactics, vehicles or mechanisms are important, but that doesn’t answer the question of mobile strategy, which varies by vertical.
“My mobile strategy will have a couple of pieces to it, maybe a social mobile strategy, maybe a retail mobile strategy with POS opt in, but I have to step back first and figure out where do I start and what is my strategy—that’s the type of approach brands need to build with their agency partners with mobile as the centerpiece.”
Here are pictures of the panel:
Related content: Advertising agencies, Mobile Marketing Summit, Joe Meyer, HopStop, HopStop.com, Lindsay Woodworth, 2ergo, Paul Gelb, Razorfish, Gretchen Scheiman, Ogilvy, OgilvyOne Worldwide, Dave Geipel, QWASI, Gowri Shankar, SinglePoint, Alexandre Mars, PhoneValley, Publicis Groupe, Caitlin
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