With the massive penetration of mobile phones, it was thought that by now mobile advertising would have taken off in a similar way as advertising on the internet did a decade or so ago. But while some companies are using mobile advertising with success, others are finding it a difficult market to break into as they struggle to exploit the medium to its fullest.
With the massive penetration of mobile phones, it was thought that by now mobile advertising would have taken off in a similar way as advertising on the internet did a decade or so ago. But while some companies are using mobile advertising with success, others are finding it a difficult market to break into as they struggle to exploit the medium to its fullest.
Yet early signs are that consumers respond well to advertisements on their mobile phones. Recent research from the Mobile Consumer Briefing in France, Germany and the UK found that 45% of consumers noticed mobile advertising and of those 29% responded to it. More importantly, of those who responded nearly 40% went on to make a purchase.
This suggests a huge potential market that can be exploited – yet the actual take-off, with some exceptions, has been slow. One reason, believes Andy Bovingdon, VP of Product Marketing for mobile billing and analytics company Bango, is a lack of understanding of the mobile market. “This is not just about the smaller screen size but about the way pages are delivered,” he said. “It is not the poorer cousin of the fixed internet, it is more advanced. And key to this is that all mobiles have an identity.”
Mobile operators have a lot of data that can be used to fine tune information about the identity of their customers, including location and call behaviour. This can allow advertisers to target the adverts directly at particular users, yet still many are just putting the adverts out there for all to see and not getting the responses for which they hoped.
“One of the things that is happening is that the consumers are getting ads that are not targeted, so they are not clicking through,” said Kelaine Olvera, Director of Product Marketing at mobile marketing and advertising company Velti. “What is needed is for the mobile users to be segmented by age, location and other profiles, and you can do this for the different types of ad. Until companies make adverts relevant to the consumer, we will not see mass adoption.”
Mark Slade, Managing Director of mobile advertising company 4th Screen Advertising, added that operators themselves should exploit this data more. “For operators, the value to them is the data they hold on the consumer for targeted adverts,” he said. “3 is the best example of an operator that has embraced this and tried to get a handle on its user base and let the advertisers target that.”
Using social network sites such as Facebook and MySpace can also help boost click- through and conversion rates. For example, adverts can encourage consumers with invite- a-friend promotions via Facebook with rewards, such as extra goes in contests or discounts if the invited friends click through or convert.
“This is using the engagement of people to people that is spreading mobile networking,” said Olvera. “We want people talking about adverts on social network sites and getting other people to take an interest as well.”
Harald Neidhardt, Chief Marketing Officer for mobile advertising company Smaato, agreed. He said: “Social networking is one of the biggest things on mobile, and the intensity of how people use sites such as Facebook is much higher on mobile than online.”
Another problem, according to Bovingdon, is that the case being presented to potential advertisers was lacking in terms of the statistics on click-through and follow through. “People put money into mobile and a lot of the basic things you get on the PC are not being delivered,” he said. “The reporting is inconsistent. You may know how many people click on an ad but the conversion rate is not there. This is the main thing that is holding advertising back. People are not getting the data they need to make them feel confident and spend more. They just get basic stats.”
He said the assumption that all the PC measuring tools would work on mobile was wrong. And he said that those that appear to work often give false results, especially as a lot of mobiles block third-party cookies by default.
What was needed, he said, was for many of the largest established companies to follow Google’s lead. Google bought AdMob in May to bring in expertise in this market. “That was smart,” he said. “Other companies need to do similar things to build up their specialist knowledge.”
But Slade believes that mobile advertising has only really scratched the surface so far. “I don’t think it has taken off yet,” he said. “It is still only a small percentage of digital spend, let alone the total advertising spend. I disagree with those who think the market is already here, but it will catch up.”
He said with the internet there was a period of six years when it did not grow less than 70% a year and that mobile advertising would eventually follow a similar growth pattern. “It might even be quicker,” he said. “They have done it before with online so they understand the challenges.”
