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The Big Disconnect: Why Marketers are Slow to Embrace Mobile Ads and 5 Things You Can Do

  |  October 11, 2013   |  Comments

Mobile is already the dominant platform for reaching the target 18-34 demographic and its growth is accelerating. Why are marketers sticking with legacy ad platforms?

It's been another big summer in technology, with new iPhones, a Twitter IPO, Snapchat's expansion, ads on Instagram, Android taking over the lead position in tablet sales, two new game consoles announced and much more. Any marketer who was hoping that the pace would slow down has been sorely disappointed. There are more platforms than ever before and trying to decide where to put your chips can be dizzying.

It's no coincidence that so many of these developments focus on mobile. Mobile is already the dominant platform for reaching the target 18-34 demographic and its growth is accelerating. Just take a look at these statistics:

It sounds like we should be spending a huge amount on mobile marketing, but we're not.

EMarketer research tells us that US mobile ad revenue will hit $8.5B in 2013. They tout this as an impressive increase over last year, yet the headline isn't the growth of mobile spending. What we should be looking at is how low the total spend is.

Compared to the US advertising spend of $171B, mobile's 5 percent seems borderline ridiculous. To put it in perspective, we spend about twice as much on radio as mobile. Radio... a medium invented nearly 200 years ago. Sigh.

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If, as marketers, our job is to put messages in front of the right people at the right time, how can we possibly be succeeding?

Unfortunately, we've seen many marketers react to the confusing climate by retreating to legacy platforms as a safe haven. While there is nothing wrong with messaging through traditional media, the chart below demonstrates why it should be hard to see the amounts spent on non-attributable channels as anything other than inertia.

In short, brand advertisers are generally spending in the areas where they've been spending for a long time, despite overwhelming evidence that it is no longer reaching their target.

This disconnect has been apparent for some time. Back in 2011, Kleiner Perkins (KPCB) detailed the mobile opportunity, calling it a $20B gap even then. As explained in the chart below, TV ad spend was roughly 1:1 to the amount of time people spent watching. Yet the ad spend in print, for instance, was far greater than the amount of time consumers are spending with the media. Desktop Internet had a small gap, but the difference in mobile was massive.

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KPCB's most recent study of US advertising spend shows there is still a significant misalignment in investment based on time in media. TV has dropped in Time Spent and slightly increased in Ad Share, but still has a nearly 1:1 ratio. Mobile still shows a huge gulf between the 11.7 percent of our time spent and just 2.5 percent of media dollars.

If anything, these numbers skew low--they are looking at the entire US population. The target demographic is certainly not spending 40 percent of their time watching TV, so we can assume an even larger share of mobile.

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Whether it's inertia, muscle memory, or heads-in-the-sand, the mobile advertising disconnect is either a problem or an opportunity for every brand. Here are 5 ways you can address the issue:

1. Demand Better Ad Models

Twitter and Facebook have reacted to the massive uptick in mobile users by developing new ways to integrate advertising. It hasn't been easy; Facebook has tried and failed with a handful of advertising ideas, sometimes provoking user ire. But they've kept at it, and while at 41 percent of their ad revenue mobile is still underweight, it's a substantial number.

Twitter cracked a successful ad model much earlier and has seen decent results. Their IPO filing emphasized 65 percent of their revenue coming from mobile, trailing their percentage of mobile users only slightly. However, marketers can't just say, "Twitter and Facebook are how we're addressing mobile."

They need leadership from publishers and ad agencies, to innovate and provide additional avenues and models. That means smarter advertising on sites and looking for other sources. As an example, POSSIBLE recently launched a LinkedIn practice to make use of the increasingly complex mobile offerings provided by LinkedIn.

2. Get Educated

If you've spent your career in traditional advertising, the digital landscape can be overwhelming, but I'm a real believer that CMOs make the right decisions when they know the opportunities. Brand marketers should demand education from the agencies handling their digital work and those agencies should develop a program where they provide regular client updates.

3. Have an Overall Mobile Strategy

If your brand doesn't have a separate POV on mobile, you're missing an opportunity. Mobile can't be a couple of slides in the "digital deck," it needs to be a specific component of a marketing strategy. That means internal and external people helping to ensure there is a plan for your website across search, apps, publishers, and social networks, to have brand conversations in mobile.

4. Focus on Data Analysis

I was recently in a meeting where a senior executive suggested that the brand invest more in radio. They began going around the room asking who listened to the radio regularly. Any time you're looking at a "focus group of one," you're in trouble.

You need to have the data on the audience you are trying to reach and where they might come in contact with your brand. Once that's set, earmark a small amount of budget to "test and learn" new formats and platforms, and protect that budget no matter what.

Mobile is generally much less expensive and easily lends itself to trials. Set up KPI's before trying each item, assess the ROI of each tactic, and continue investing in what is effective. We've built our entire company's philosophy around asking the question "Does it Work?"

5. Don't Wait to Play Catch Up With the Market

One thing is certain: we're going to look back at this time in amazement. Mobile will continue to dominate and while there is currently a gap, if you don't address it, your competitors will.

What are the greatest challenges for your organization in mobile? Share your thoughts or tips in the comments.

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ABOUT THE AUTHOR

Andrew Solmssen

Andrew Solmssen serves as managing director of Possible's Los Angeles office, leading the firm's West Coast client teams and determining best practices for engagement management.

He previously served as managing director at digital firm Schematic, where he played a key role in developing some of the earliest advertising models for delivering broadcast content via the Internet. Andrew was also responsible for providing strategic guidance to clients such as Comcast, ABC Television, and NBC Universal in the areas of digital strategy, content distribution, mobile entertainment, and Internet TV. Before Schematic, Andrew served as executive producer at Web design and consulting firm Kaufman Patricof Enterprises.

A frequent speaker at industry events such as Digital Hollywood and CES, Andrew is also regularly quoted by business and trade media on the topics of digital advertising and technology innovation. Prior to his involvement in digital media, Andrew lived in Namibia as part of the Harvard Institute for International Development.

Follow Andrew on Twitter @asolmssen.

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