Mobile Marketing in ’08: iPhone Was the Story

Was it finally the “year of mobile,” or just the year of the iPhone?

Mobile investment clearly moved past the experimental phase for many brands and their agencies in 2008, as traffic rose and ad networks established themselves with media buyers. Yet Apple’s worshipped device and its app store stole the spotlight from those trends.

Apple released a second version of the iPhone this year, with 3G or faster browsing speeds and GPS technology, among other features. The handset was followed by the opening of the iPhone app store, which surpassed 300 million downloads in its first 21 weeks of operation.

The app store has spawned its own media marketplace. Pandora’s personalized music experience for the iPhone surpassed two million installs earlier this month, and has appealed to many brands — including other app developers — that are eager to reach users of the device in this new digital environment. Electronic Arts has also moved in on the device in a big way, publishing numerous ad-supported games for it. The Associated Press earned readers for its iPhone offering. And Google opened AdWords to iPhone and G1 platforms this month.

“Clearly the iPhone has been in the spotlight,” said Mark Donovan, senior vice president of mobile products and senior analyst at M:Metrics. “One of the reasons is the substantial advertising spend that Apple has made. It has a halo effect, making people aware of what you can do with phones.”

Apple took out a full-page ad in The New York Times and the Wall Street Journal with the message, “Solving life’s dilemmas one app at a time.”

Despite the iPhone’s primacy, other devices hit the market with similar feature sets, and many of them found receptive buyers.

“This was really a year where people had more choices than ever, with capable devices to connect with the Internet,” Donovan said. Among the many alternatives to the iPhone, he said, Google’s G1 “came out stronger than people anticipated.”

But the efforts of mobile marketers have been trained on the iPhone. Platform-A began serving ads optimized for the handset, as did AdMob and other networks.

Apart from the iPhone, it remains an open question whether mobile ad networks can maintain their appeal as traditional ad networks move in. Prior to 2008, AOL bought Third Screen Media, Microsoft bought ScreenTonic, and Nokia bought Enpocket. While the year was quiet on the acquisition front, many believe further consolidation is on the way.

“There are certainly ad networks in the market that can sustain,” said Donovan. “You will likely see the online networks add mobile, the bigger [mobile ad networks] be bought, the weaker ones fold up their tents, and the stronger ones become part of larger networks.”

Location-based advertising, long the holy grail of digital marketing, had its moments in 2008. Quattro and uLocate created a mapping application where advertisers pinpoint locations on search queries. And CBS cut a deal with Loopt, a mobile social network, to deliver location-targeted ads to mobile users who agree to receive them.

“I think we’re [starting to see] geographically targeted advertising with mobile,” said Donovan. “But walking by the coffee shop and popping up a coupon, that’s still a long way away… It needs lots of people who want that. What was demonstrated in 2008 to everybody was how darn valuable a location [enabled] device was, adding value to users and to advertisers.”

Zach Rodgers contributed.

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