Businesses to double their mobile investments over the next 18 months
By Chantal Tode
June 19, 2012
Mobile ad spend spikes as smartphone penetration grows
Businesses are planning to invest more in mobile projects in the next 12-18 months than they have over the entire course of their existence to data, according to a new report from Antenna Software.
In the report, “Mobile Business Forecast for Marketers 2012,” Antenna reports that U.S. small and medium size businesses plan to invest, on average, $852,000 in mobile over the next 12-18 months compared with an investment of $405,000 to date. For U.S. enterprises, the future investment jumps up to $1.4 million compared with the $587,000 spent to date.
“The big news for marketers is that mobile needs to be a more strategic consideration vs. a more tactical project,” said Jim Somers, chief marketing and strategy officer for Antenna Software, Jersey City, NJ.
“Our research shows that marketers are investing more than half a million dollars on customer-facing mobile initiatives alone, but are struggling with low customer adoption, and they need to better protect their investments,” he said.
“Brands need to look at the big picture of how the mobile channel allows them to engage with customers and create a mobile strategy that addresses those opportunities and allows them to refine apps and websites to ensure the best usability and usage.”
Customer adoption is slow
Antenna interviewed 1,000 IT and business decision-makers in the United States and Britain to find out what mobile projects they will be investing in over the next 18 months.
Of the $852,000 that SMBs plan to spend, $431,000 will go to customer facing projects while $696,000 of U.S. enterprise’s $1.4 million planned spend will go to customer facing projects.
Brands report varying success with their mobile strategies to date, with 33 percent saying that they have had adoption by half to three-quarters of their customers, 29 percent by one-quarter of customers, 22 percent by less than a quarter and only 16 percent report widespread adoption. The numbers suggests brands may be initiating projects without adequately researching what kind of content their customers are looking for.
“The overall low adoption of mobile projects was the most surprising part of the research for me because it really underscores the ambiguity of mobile,” Mr. Somers said.
“You might think with all the excitement around mobility that as brands embrace it more there would be a correlation with adoption on the customer side,” he said.
“And given the investments being made and increasing number of projects the research shows companies are taking, it’s shocking to see that so many still struggle with getting customers to use them widely.”
Mobile Web a focus
The numbers also point to the fact that more brands are now working on mobile Web sites than native apps. Among both U.S. and British businesses, 45 percent are undertaking mobile Web site projects, 43 percent mobile apps, 32 percent Web apps and 14 percent a mobile storefront and content delivery services.
Antenna forecasts that almost every established and emerging brand will have a mobile Web site within the next 24 months and that after that, there will be a greater focus native vs. Web app development.
The results also show that U.S. businesses are planning to launch almost as many mobile projects in the next 12 months as they have done to date in the space. U.S. SMBs are currently managing three mobile projects and plan to launch four over the next 12 months while enterprise businesses are managing four and plan to launch five new mobile projects.
Respondents named speed, usability, robustness and design as the biggest potential factors affecting the adoption of their branded mobile projects.
Brands continue to build their mobile presence to help them interact with and engage with customers across multiple touch points. However, they are struggling to develop apps and mobile Web sites that has a noticeable impact on loyalty because they are often taking a tactical rather than a strategic approach.
Complicating the matter is that the first step brands often take is going to their advertising or digital agencies to handle the design and maintenance of mobile projects, meaning they wind up with little creative control or management capability over the mobile assets they have invested in, per the report.
One possible outcome of the increased spending is that marketing departments may begin to consider investing in a full-service platform to manage their mobile app, Web and content initiatives instead of depending on outside agencies to support one-off mobile projects.
“Marketers need to have better control over their mobile initiatives, and it’s best to be aligned with the rest of the business and especially IT,” Mr. Somers said.
“Typically security and control aren’t things marketers have needed to worry about, but when it comes to the effectiveness, usability and the shelf-life for mobile apps and websites it’s actually a critical piece of the puzzle,” he said.
“Today, companies might have a plan for how they build mobile apps, but they’ll need to think beyond just the build aspect and consider the implications of integration with back-end systems, as well as the ability to manage multiple applications and apply analytics that allow them to understand usage as well as customer needs better to improve mobile projects in the future.”
Chantal Tode is associate editor on Mobile Marketer, New York
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