Agencies Implications in Mobile Advertising, Part 2
Ten years in the making, mobile advertising is finally getting up to speed. Are ad agencies ready? Part two of a series.
Ten years in the making, mobile advertising is finally getting up to speed. Are ad agencies ready? Part two of a series.
We agency people naturally like numbers. Last year, Verizon Wireless CMO John Stratton predicted, “25-30 percent of the $100 billion spent annually on brand advertising will find its way onto the mobile screen.” That’s kind of bold statement should get your attention, right?
Perhaps the reality is closer to a recently released “Mobile Marketing and Advertising” study by ABI Research which forecasts the total mobile marketing and advertising market will reach $3 billion by the end of 2007, and $19 billion by 2011. (Note this study lumps mobile advertising and mobile marketing dollars together).
Part 1 of this series discussed user adoption obstacles for advertisers. Advertiser adoption faces hurdles, too. A recent Forrester Research study revealed most companies are holding out for “proof of use” before investing in the channel.
Selling Mobile
To help convince advertisers and marketers to test the mobile advertising waters, the mobile industry has adopted more aggressive action to sell the channel. Recognizing a need for education, many mobile advertising providers have created “Mobile 101” road shows for agencies and large advertisers.
“We’re doing educational programs and most everything creative assets-wise, but there still aren’t clear standards for creative production [nor is there] ease of production right now,” stressed AdMob‘s VP Marketing, Jason Spero. A lack of standards has been an issue, but the GSMA, a global trade group representing mobile phone carriers, just formed a steering committee to tackle mobile ad standards.
Aside from hiring direct sales forces, providers have also sought out partnerships from complementary companies (Medio partnering with Ingenio, for example) to help sell and disseminate the message. And of course, there’s been a big publicity push. We read about some company announcing new mobile platforms, technologies or mobile line extensions weekly, it seems.
Who Buys Mobile Advertising Now?
No single class of advertiser rules the mobile ad buy yet. While many thought direct response advertisers would be early adopters, particularly those that could provide local-based incentives such as travel, hospitality or fast food franchises, they haven’t gotten or stayed on board to any significant degree. Many in mobile now see consumer packaged goods (CPG) and big brand advertisers testing mobile with branding studies, data collection, and brand protection and capitalization, because there’s still less clutter on the screen. The entertainment industry has also had success with mobile advertising.
Do Carriers Impact Adoption?
Carriers have invested a lot of money into building their networks and customer base, so one could argue they’re entitled to protect their customers and keep them happy. What’s not really discussed is how carrier control over their customers’ user experience (“on deck”) has so far influenced almost every aspect of mobile advertising.
“The [US] carriers are so freaked out about clogging their pipes that they limit the handsets with good technology (and then charge a premium for them) and reduce the majority of what comes on a handset to zilch,” criticized Chris Arens of AdInfuse. Carrier concerns about becoming a mere access point onto the mobile Internet, says Arens, have also limited user access, “at least until they figure out how to squeeze every penny out of their users.”
In the UK, carriers have implemented fixed price mobile Internet usage. This has allowed the mobile advertising industry to flourish. Perhaps US carriers will launch similar initiatives in the near future, but what Arens predicts as the turning point to get carriers on board will be wide spread iPhone adoption, Apple’s forthcoming consumer-friendly device with an exclusive Cingular/AT&T relationship. To compete against consumer defection, says Arens, other carriers will lean on mobile manufacturers to produce similar devices. With ample competition, devices will become faster and cheaper. Then, it’s anyone’s game.
Most mobile advertising solutions providers offer both on-deck and off-deck advertising. Some companies, like Medio, are trying to shift carrier reluctance by sharing off-deck data with carriers to prove the numbers.
According to Jeff Janer, CMO of Third Screen Media, the typical off-deck user is surprisingly not the youth audience, but the business user. They’re the ones who can pay bigger fees to regularly access the kind of data they want.
Which returns us to the point: we might be able to buy as much mobile advertising as inventory allows, but who sees it?
I can’t seem to get a firm answer.