Mobile marketing's recent growing pains promise more seasoned strategies in 2017
The year’s few successes included commerce and interactive content, but brands are still struggling to unlock mobile’s full potential.
Mobile marketing experienced a few growing pains in 2016 as smartphone innovation stalled, questions arose around the importance of apps and marketers realized that putting customers first — and not grasping at the latest technology or channel — is the key to success.
While mobile clearly continues to grow, marketers in 2016 grappled with measurement issues and an increasingly complex landscape as they struggled to unlock its potential. High points such as healthy commerce numbers and a strong reception for interactive content showed that consumers are hungry for mobile experiences that meet their needs. Looking ahead, smart marketers will need to focus on location-based services, personalization and reducing friction through mobile services as they take a consumer-first approach to marketing.
“Two thousand and sixteen was pretty light when it came to major advancements, we did not see many, if any revolutionary steps but rather a number of micro evolutions,” Michael Becker, co-founder and managing partner at mCordis and The Connected Marketer Institute, told Marketing Dive.
“While mobile is a powerful current driving through marketing, in 2016 many are increasingly realizing that putting people before is the true force that is driving market success,” he said. “It is people’s behavior, needs and interests, at an individual level, that marketers must learn to understand and serve.”
There is no doubt that mobile marketing is still an important piece of forward thinking. Marketers are expected to increase their spend on mobile ads by 45% this year for a total of $45.95 billion, according to eMarketer. Mobile’s share of overall ad spending is also growing, and by 2019 could account for more than one-third of total ad spending in the U.S.
More broadly, the global market for mobile marketing is on target to grow at a compound annual rate of 28.1% between 2016 and 2021, reaching a total of $98.85 billion by the end of the forecast period, according to Markets and Markets.
Despite the overall positive trend, there were also signs in 2016 that the mobile market is maturing. The growth in adoption leveled out from its previous steep trajectory, with the global smartphone shipment growth rate expected to be just 0.6%, down from the previous year’s growth rate of 10.4%, according to International Data Corp.
With smartphone penetration levels reaching saturation, marketers will need to focus more on strategy as the perception wanes of mobile as the hot new thing.
There also were indications that marketing apps may have peaked. No longer are all marketers expected to have an app. Instead, more integrated mobile experiences are proliferating, such as communicating with a brand from within a messaging app via a chatbot or accessing the information and even services offered within an app from Google search results.
While these developments are exciting, they are also contributing to an increasingly complex mobile landscape. As a result, marketers – many of whom are still trying to figure out mobile — are feeling overwhelmed by the growing number of ways to engage smartphone users and are unsure about where to invest.
The right moves
Despite the challenges in mobile, there were a number of new tactics and techniques that drove excitement in 2016 and promise to take engagement to the next level.
One of the biggest mobile success stories in 2016 was Pokemon Go, which showed how a phone can be used to bridge the online and offline worlds through augmented reality. This strategy is likely to influence marketing for years to come.
The success of Pokemon Go caught many by surprise, as did a broader receptiveness by mobile users to embrace interactive content, which included ads, 360 video, augmented reality and virtual reality.
“The takeaway that brands and marketers got from VR’s success in 2016 is that consumers want a more immersive ad experience,” James Malins, VP of cross-channel solutions at Amobee, told Marketing Dive. “Whether that’s rich media ads, 3D ads or a full-scale VR campaign, brands should be looking to do more storytelling with their advertisements to stand out in a fragmented media landscape by commanding audience attention in a creative way that keeps audiences engaged.”
“Foursquare’s accurate prediction [...] of Chipotle’s declining sales in 2016 based solely on the analysis of foot traffic patterns is an enormous advancement for mobile marketing [...]”
VP of cross channel solutions at Amobee
Location measurement, an important unique offering in mobile marketing, made significant advances in 2016, becoming both more granular and integrated across platforms.
The ongoing rollout of beacons is helping marketers get more accurate physical data about their customers while Foursquare teamed up with Nielsen and with Snapchat to help marketers hone in on hyper-local marketing.
And brands such as Walgreens and Starbucks are testing Promoted Places on Google Maps this holiday season, enabling mobile users to click on a pin for a specific location and see available sales and services.
“Location data is incredibly powerful — beyond just using it for understanding your consumer, it should also impact your marketing strategy,” Malins said. “Foursquare’s accurate prediction — within 1% — of Chipotle’s declining sales in 2016 based solely on the analysis of foot traffic patterns is an enormous advancement for mobile marketing, uncovering a more accurate way to understand your consumers and target them more effectively.”
Despite the gains made in location in 2016, there is also significant untapped potential in this area, reflecting marketers’ relative inexperience with location-based engagements.
For example, beacons, which arrived on the scene with great fanfare several years ago, have yet to move beyond pilot deployments in many cases, despite the successes that some have seen delivering contextual marketing for in-store shoppers.
“The problem is that most marketers are overwhelmed by the complexity and don’t know how to really make all the data truly actionable,” Sheryl Kingstone, business applications research director at 451 Research, told Marketing Dive.
Location-based offers will be an important opportunity in 2017 as long as they are intelligent and personalized, she added.
Another mobile success story this year was mobile commerce, which made significant leaps forward as consumers became more comfortable not just searching on their phones, but also completing a purchase.
“On Black Friday alone, mobile saw $1.2 billion in U.S. revenue, showing 33% growth year-over-year,” said Jeff Hasen, founder of Gotta Mobilize. “Why? Likely several reasons. Consumers are more trusting of purchasing via their phones. Businesses undoubtedly made the buying process more intuitive and quick and given how much time we spend with our devices, the idea of having to put them aside to fire up a desktop is more foreign than ever.”
In 2017, the opportunity in mobile commerce will be in creating omnichannel experiences with smartphones as a focal point, per 451 Research’s Kingstone. Click and collect will help retailers compete with the growth in digital commerce while branded mobile wallets that unite payments, loyalty and coupons will provide a value-driven experience for frequent shoppers.
“Personalized, context-relevant offers are more effective, and basing rewards on real-world transactions ensures they are calibrated appropriately and promote stronger engagement,” Kingstone said.
"[...] given how much time we spend with our devices, the idea of having to put them aside to fire up a desktop is more foreign than ever.”
Founder of Gotta Mobilize
Other mobile developments in 2016 were less clear. For example, the mobile ecosystem is increasingly dominated by two giants in the key areas of media and software. While such concentration of power is helping to drive short-term growth, it could present issues down the road.
“Duopolies have emerged, the duopolies of Google and Facebook on the media side and iOS and Android on the device operating sides, which can be seen as an advancement as they’ve helped produce focus and standards,” said mCordis’ Becker. “But they also may be a fail in the near future as they may stifle competitiveness and innovation. Only time will tell.”
Marketers also failed to take advantage of some important opportunities in mobile this year, contributing to a sense of stagnation. One significant shortcoming came in the area of metrics and measurement.
Marketers are investing billions a year in mobile, yet continue to complain that they cannot accurately track and measure their efforts, resulting in an inability to have a clear picture of mobile’s return on investment (ROI).
“Hands down, [the biggest fail of the year is] the fact that, according to Forrester, 67% of marketers say that they can’t measure mobile’s ROI,” said Gotta Mobilize’s Hasen. “More amazing is the fact that only 20% say that they have adequate budget for mobile initiatives.
Compounding the measurement problem was a series of announcements by Facebook that it had been inaccurately measuring activity across a number of its offerings, including video, live streaming and Instant Articles. As the second largest advertising platform, these revelations have left many marketers with questions about how to move forward.
“[Duopolies] also may be a fail in the near future as they may stifle competitiveness and innovation. Only time will tell.”
Co-founder and managing partner at mCordis
Making a connection
Marketers also failed to take advantage of more organic engagement opportunities on mobile and instead continued to serve intrusive ads, one reason why the use of ad blockers on mobile is growing. While native ads and content marketing are making gains, too many marketers are failing to create quality experiences, risking turning off more consumers.
A case in point is the opportunity that mobile offers to create personalized, contextually relevant experiences, something marketers continued to struggle with in 2016.
“Despite all the discussion around personalization, I personally found no meaningful difference in outreach from brands, especially during the critical holiday season,” said Hasen. “I’m still getting generic newsletters, even from companies that know me and could and should do better.”
Ultimately, marketers recognize that mobile holds significant potential for reducing friction in their engagements with consumers — the trick is finding a way to do so that is valuable to consumers and drives measurable results for brands. Several successful examples from marketers in 2016 promise more marketers will hit the nail on the head in the coming year.
“More and more marketers, including Domino's, Starbucks, Sephora, have put a laser focus on reducing friction,” said Becker. “Starbucks’ mobile order and pay service now accounts for over 5% of revenue; CVS’ answer to this was the introduction of curbside pickup — people order from their phone and associates bring the goods out to their car; Amazon Go’s new store format illustrates a viable future for physical retail.”