Mobile advertising will mushroom from $790 million in 2010 to $4 billion by 2015, according to BIA/Kelsey. Local shares are $404 million and $2.8 billion, respectively, putting local on pace for 70 percent market share. Sounds impressive, right? Before you declare a resounding victory for local advertisers, ironically, it is national advertisers driving the local-mobile growth.
Some have been quick to compare mobile to the Internet-advertising boom of the 1990s. For example, big brands were first to jump on board. Armed with big budgets and resources, they could afford to test national spending, and then later localize their campaigns to dominate niche markets. Upon mainstream Internet adoption, local advertisers were running to catch up to the speeding bandwagon.
But mobile is different, and proactive SMBs can reverse the trend of early big-brand domination. From afar, mobile adoption is well ahead of the curve set by personal computers, thanks to heavy mobile penetration and an established base of users. After all, without the foundational familiarity of computers and traditional Internet access, consumers wouldn't be compelled to embrace mobile media as quickly as they have. In fact, studies pinpoint consumers' high expectations of mobile, showing that they demand computer-equivalent experiences.
My question for SMBs is: Why aren't you on board?
Mobile search is a sure-fire way to win in marketing because it delivers the performance - establishing the final in-store sale through clicks, calls, and visits - that SMBs need and crave for survival. With that comes performance-based models that make mobile more affordable, flexible, traceable, and testable than online advertising was at the same stage.
Quite frankly, mobile is everything you need (and a bag of chips).
By nature, mobile is local. Smartphones are one of the few items that consumers tote with them everywhere, so the available content is unique to and dependent on a user's location. When a mobile user enters a search query, it's typically very location specific, making hyper-local content a hot commodity.
The upswing in local relevance plays into the hand of local businesses, where consumers prefer to shop. Perhaps no reason is greater than mobile's unprecedented impact on purchase decisions. In fact, mobile is better equipped than other platforms to immediately draw consumers into storefronts, creating:
Mobile's value and use in the buying process is evident considering that nearly nine out of 10 consumers take action, such as calling or visiting local businesses, following local searches conducted on mobile devices. That's important for SMBs hit especially hard by the recent economic climate. With advertising budgets extremely tight and spread thin across all media, SMBs are looking to develop greater ROI quicker.
While other platforms struggle to justify ROI because they cannot easily tie campaigns with offline behaviors and in-store sales, mobile enables SMBs to monetize performance, whether through click to call, directions accessed, or offers redeemed. Sure, other channels yield rewards (and have been doing so since the dawn of advertising), but such advertising requires casting of a broad net with the hope of snagging a few, qualified consumers. With mobile, advertisers have the ability to target so specifically that they're narrowing their focus, yet essentially reeling in a prize-winning catch every time.
Performance Is No Longer a Question, but a Reality
For a time, the mobile mystique, relatively low mobile traffic, and limited ad inventories kept premiums at all-time highs. In addition, brands assumed the financial risk, which, if response was low, could be expensive. As you can imagine, this was unattractive for budget-strapped SMBs who couldn't afford risks.
With the continued, unprecedented growth of mobile adoption and usage, new advertising models have come into play, affording SMBs with opportunities to test and target (and grow sales) without assuming so much risk. One of the more popular opportunities includes performance-based mobile search via pay per click or call.
Another promising opportunity is hyper-local display, which allows SMBs to put their brands in front of consumers within distinct locales at a cost far less than traditional radio, TV, and even online display. Although display is typically sold on a cost-per-thousand-impression basis (CPM), the results prove that it is one of the most cost-effective channels on the market because:
In addition, when display ads are targeted based on location and relevance, response rates are impressive. In fact, targeted mobile display performs five times better than non-targeted mobile display and 10 times better than traditional online display.
Well-performing mobile ads deliver useful, relevant information to users. Coincidentally, that information - driving distance, maps, store hours, etc. - is exactly what local consumers need to complete their purchasing. With mobile advertising, SMBs can enter the mobile space now and affordably - all while generating qualified leads and local awareness. And with SMBs slow out of the gates, early mobile adoption could give you a dominant, top-ranking presence and a significant advantage over competitors.
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Craig Hagopian is responsible for driving xAd's sales, advertising partnerships, and marketing operations within the local-mobile marketplace. He possesses more than 20 years of experience in sales and consumer-marketing leadership for hardware and service-based companies in the PC, wireless, and broadband-Internet sectors.
Hagopian previously served as chief marketing officer at Axesstel - a CDMA-terminal manufacturing company - where he oversaw sales, marketing, and new-product development, as well as investor and media activities that included securing $7 million in funding and transitioning Axesstel to a public company. While there, Hagopian also improved the company's earnings by 70 percent through wireless-carrier account acquisitions.
Prior to Axesstel, Hagopian held management positions at AIR2LAN, a regional provider of broadband-Internet services. Even earlier, he served wireless-data-messaging entity SkyTel Communications as general manager, vice president, and senior director, developing consumer strategies and building partnerships with major retailers and telecommunication providers. Finally, at Epson America, Hagopian served as manager of market planning and product management, a position that enabled him to author the market-entry plan for a $150-million, multimedia product line.
Applying his veteran leadership in the local-mobile and search spaces, Hagopian is a frequent speaker at industry conferences. He received a Bachelor of Science degree from the University of Southern California and a master's degree from Duke University - both in business administration. He currently lives in San Diego with his wife and two children.
December 12, 2013
1:00pm ET / 10:00am PT