Making a case for mobile: Industry experts speak out
June 9, 2009
Shira Simmonds is cofounder and president of Ping Mobile
Mobile marketing is certainly, undeniably gaining credibility and legitimacy, but is nowhere near to reaching its revenue potential, according to industry experts.
Brands like Coca-Cola, Pepsi, Jaguar, Arby's, McDonalds and Jiffy Lube are using the channel for branding and customer acquisition, which has certainly aided the industry in terms of gaining credibility.
"There has been an enormous uptake in mobile campaigns over the last few months alone," said Shira Simmonds, president of Ping Mobile, Englewood Cliffs, NJ. "As we begin to recover from this economic tsunami, advertising clients are responding with increased confidence in the market, which have resulted in increased budgets.
"The mobile campaigns that have been running for our clients over the last 6 months have continuously delivered a strong ROI as compared to traditional media alone, and existing clients are opting to renew and expand upon their mobile strategies, incorporating mobile into their full media mix," she said.
More than a third of high-use smartphone users are taking action on mobile advertisements, according to a study by AOL's Platform-A.
For marketers, smartphones and mobile marketing provide new ways to capture consumer attention with higher degree of focus than traditional forms of media.
Mobile lets marketers align their brands with a technology that is seen as cutting-edge, timely and current.
"The industry is evolving," said Cheryl Lucanegro, senior vice president of advertising sales at Pandora. "Though there is still a lot of testing with mobile advertising, we are seeing a growing number of marketers who recognize that their best consumers are on mobile devices 24/7.
"Like your keys -- you don't leave home without your mobile phone and marketers want to be there. Consumers are searching, shopping, and engaging with brands on the go -- offering marketers an opportunity to connect when consumers are actively seeking information to act on -- then and there," she said.
Smart marketers are looking to provide a richer experience for consumers to engage with their brand.
They are looking provide value, so when consumers do click they get information they can use immediately: coupons, location-based offers and experiences that can become part of their daily life.
"We have seen more marketers upgrading their mobile sites to allow consumers to engage and make transactions," Ms. Lucanegro said. "Also more and more campaigns are now integrated with both online and mobile messaging to ensure they reach their consumers everywhere and anywhere."
Brands have a compelling opportunity to engage with consumers while they are very focused on content, sponsoring applications that are valuable to the experience and provide convenience.
According to Dave Everett, vice president and partner at KaOoga, Newton, MA, the growth of the mobile industry is propelled by three key questions marketers now have to ask themselves in the face of the harshest economic climate any of them have ever confronted.
• Is my message reaching the right target?
• Is my company getting sufficient results to justify the expenditure?
• Do I need to rethink my ad mix to stand out in this highly competitive marketplace?
The 18-40-year-old demographic is the most prized target of all, certainly for telcos, movie studios, automakers and technology companies.
"The growth of the mobile industry can be attributed to the sheer numbers of consumers using mobile, higher engagement opportunities and the increase in value of apps for the user," Ms. Lucanegro said.
"Also, the immediacy of connecting with a consumer as they are on the go and the possibility to connect and point to a brick-and-mortar location allowing consumers to take an action at that moment that results in a sale," she said.
Mobile users have deemed their mobile phone their primary communication channel as new home phone line installations start to evaporate--and not just for personal relationships, but for access to real-time information, as well as for games and entertainment.
This demographic is just as elusive as they are appealing.
"With average age of late-50s reading paid dailies, it is too inefficient to pay for all those less-relevant prospects in order to reach the one reader in four or five in the coveted age brackets," Mr. Everett said.
Mobile has become the vehicle of choice, especially since wireless carriers have invested more than $40 billion in upgrading their networks in recent years to handle video and rich data.
Mobile allows instant feedback, an immediate call-to-action and thus provides real time measurability to help marketers confirm that they are allocating ad spend optimally.
Handset users are more aware of mobile advertising, with 38 percent recalling seeing an advertisement on their device, according to research.
"The economy slowed down what we expected to be a breakout year for mobile marketing," Pandora's Ms. Lucanegro said. "However, we are forecasting lots more brands will move in mobile marketing.
"We are expecting more experimenting and brands applying the learnings to get better and better at mobile marketing," she said.
Mobile advertising has grown outside of mobile Web and SMS formats, which have previously dominated the medium.
Ads inside of games, social networks and location-based services are all recalled by significant numbers of consumers and growing faster than other formats.
In just three months, the number of smartphone users seeing ads inside a location-based network has almost tripled to 15 percent.
Also, since carriers are currently developing more and more smartphones, adoption will most likely increase and so will advertisement awareness. Smartphones provide users with a Web-like experience, more so than feature phones.
Mobile is doing better than more traditional advertising is doing right now, especially with the current economy.
"Unlike print, the buy or cancel cycle is telescoped -- you are not stuck with bad meat if you see the campaign isn't pulling," Mr. Everett said.
U.S. newspaper advertising revenues which were as high as $50 billion in 2005 have declined to just $30 billion in 2008.
"Half of that missing $20 billion has probably evaporated (lack of auto, classified, real estate ads etcetera, but the remaining $10 billion are ad funds in search of an outlet," Mr. Everett said.
"And as mobile gains traction through proven success, high click through rates, the presence of national brands such as Ford, there is no longer a controversy or hesitation on the part of the ad buyers who experiment with this new channel," he said.
As phones become ever more useful with the introduction of new apps and intense competition between Palm, Apple, Samsung and the others creates even easier to use units, the industry will continue to grow.
The good news is that more and more consumers are recalling mobile advertising.
The proliferation of new formats, especially for smartphone users, establishes a real opportunity to treat the medium more creatively.
"One caution might be that as the wow factor wears down, and the newness fades into familiarity, the advertisers are going to have invest more thought into the offers they provide customers and more value in the incentives their mobile advertising provides these customers," Mr. Everett said.