What's Hot, What's Not: Mobile Advertising Trends in 2013

As consumers rapidly adopt mobile, here are the top trends that will drive mobile advertising and take center stage in 2013:

1. Android to continue the “mass market” smartphone momentum

Everyday over 1.3 million Android devices are being activated, with the majority of them being priced for the “mass market.” In 2013, Android will cross an installed base of 1 billion users. These are massive numbers. Windows Phone 8 launched in Oct. 12 amidst a lot of fanfare. There are other new platforms in the news such as BB10, Ubuntu, and Tizen, but the Android – iOS duopoly will continue given the head start these two platforms have. We will see new OS/platforms chip away small shares but there is nothing on the radar that will make a significant dent to the ongoing Android momentum. Over the long term, it may be a different story, but it is unlikely to change in 2013.

2. Mobile advertising will get smarter

The surging app ecosystem has caught the attention of all the marketers. At the same time, mobile Internet traffic is surging across the globe and it’s beyond doubt that mobile Internet will get far bigger than desktop Internet. Advertisers today are now adapting their campaigns to connect with their consumers. While the buzz is lot more on smartphone advertising, soon you will see marketers leveraging the broader mobile ecosystem. Mobile Internet-enabled feature phones still dominate emerging markets (80 percent penetration). Advertisers will have to invest time evaluating the mobile habits and behavior patterns of users to create smart campaigns to be more relevant, contextual, and engaging. The growth in ad spending will happen not only due to more advertisers leveraging the platform but significant share of digital spends shifting toward the medium.

3. Freemium model will flourish – blend of in-app purchases with ads-based revenue in parallel

Developers using the classic in-app purchase model to monetize are seeing that only 5 to 10 percent of their app users convert into paid transactions. With an increasing number of app users coming from emerging markets, this conversion rate will further reduce – as while emerging markets have a high mobile penetration, the GDP per capita is much lower and credit card penetration is only in single digits. More developers will now work to monetize the remaining 95 percent of their app user base by plugging into Telco billing for micro-transactions and using powerful mobile advertising solutions. 2013 will see such premium apps come into the mobile advertising foray and advertisers will benefit from being able to target the premium audience of these apps and games.

4. Mobile advertising ecosystem will get further fragmented – emergence of new players, new models, and new forms of mobile advertising

We are already noticing traditional online ad networks trying to extend the footprint to mobile. As mobile platforms to become a part of mainstream media such as digital, this trend is likely to continue. At the same time, telcos/operator networks who missed the mobile advertising bus are still looking to get back into the game and cash in on the opportunity, especially in emerging markets. We have seen Singtel making the move last year. In 2013, we will see more action for viable opportunities and partnerships to participate in the rapidly growing mobile advertising industry.

New business models and forms of mobile advertising such as incentives, trade-ins, opt-in, push-through, permission-based and some other buzzwords will get popular. Tablets will start contributing significant inventory to the overall mix and new formats that are extremely engaging will emerge. Overall, display advertising on mobile will grow exponentially as a result!

5. Consumers’ mobile lifestyle will allow brands to converge advertising, distribution, and transactions

Mobile is fundamentally altering consumer lifestyle today – changing how we live, work, and play. Over the past few years, brands have tried to integrate mobile as part of their overall media mix. In 2013, brands will have the opportunity to take it to the next level – of leveraging mobile for all the 4Ps of marketing. Marketers are now realizing that mobile is “place-shifting” purchases – i.e., purchase decisions are not happening at a physical store but in the palms of the mobile consumer. Combined with the micro transaction capability of mobile, m-coupons can alter the pricing paradigm with hyper-segmented offers! As more and more consumers use their devices for making purchase decisions they traditionally made offline, the lines between advertising, distribution, and transaction will blur.

6. Video on mobile will explode

The latest trend in online video is the rise of mobile viewership. As consumers get used to watching more and more videos on their devices and on the go, publishers will significantly increase the distribution of video content on mobile. This will also present a unique opportunity to the brands to leverage the mobile platform for video advertising. Given the popularity of video advertising online, mobile video advertising will become widely accepted in 2013 as advertisers realize the benefit of targeting the consumers on the go.

7. Mobile performance marketing will get mainstream

Much of the work on mobile advertising has been focused on rich media formats and app creation. Marketers have been focused on creating mobile campaigns based on rich media formats that grab consumer attention. However, as mobile advertising now begins to get mainstream, the focus would also shift toward performance. Mobile, like all digital, is highly measurable – one would see advertisers looking for response/outcome-focused campaigns such as leads, acquisition, or any other definitive actions that enhance the ROI of the marketing budgets.

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