Mobile Marketing 2011 - University Of Alaska System

are not looking to the smaller players such as Microsoft Videoand Yahoo because they do not have the required traffic Mobile video advertising spend– whether it be pre- orpost-roll, in-stream or in-ad unit executions – will reachvolume for a successful search campaign, per IDC. 50.8 million in 2011, up from 28.3 million in 2010 andA Bing executive at CTIA Wireless 2011 revealed 12.6 million in 2009. By 2014, spend on mobile videothat 50 percent of search queries on mobile have advertising is expected to reach 201.3 million, eMara local intent, with users searching for restaurants, keter predicts.movies and other forms of entertainment closestThe launch of the iPad has really propelled the growth ofto them.mobile video advertising. Mobile video has higher viewerWhen people are on their desktop, they are in research retention than online video, with 94 percent in the firstmode. But when they are on their mobile device, they 10 seconds compared to only 81 percent on the PC Injust want to ask one thing and get an answer. They are ternet, according to Rhythm NewMedia, a mobile videonot trying to decide which big-screen TV to get – they ad network.want to find a good restaurant nearby right now.Completion rates for interactive pre-roll video ads reMarketers are finally beginning to understand that they main high at 87 percent, exceeding online video andneed to focus their mobile search efforts to take advan- television. Additionally, iPad CTRs for pre-roll video adstage of mobile-specific capabilities such as location- are higher versus iPhone, iPod touch and Android. CTRsbased services and voice and image-recognition tech- are 79 percent higher on display ads that mention videoas a call to action.nology.Google’s approach in mobile is to innovate around spe- Brands within the consumer packaged goods and entercial capabilities of mobile devices to make the search tainment categories are leading the way in mobile videoexperience easy, fast and useful. The company focuses on advertising adoption, per Rhythm.location-based, voice and image recognition search.The number of U.S. mobile users who watch videos onOver the past two years, Google’s mobile search traffic their devices has increased more than 40 percent yearhas grown fivefold. It offers companies the following over-year in both the third and fourth quarters of 2010,ending the year at a grand total of almost 25 millionmobile search tactics to gain a competitive edge:people, according to a mobile video report from Nielsen A location-based search feature called “Near Me Now” Co. These consumers watched an average of four hoursfor iPhone and Android platforms, which lets users and 20 minutes of mobile video per month in both thebrowse through lists of nearby banks, restaurants and third and fourth quarter of 2010, which equals a 33 percent and 20 percent year-over-year bump in each quarother business categoriester respectively, per Nielsen. Google Maps Navigator, which enhances the GoogleMaps functionality by providing turn-by-turn voice guid- Growth in mobile video consumption can be attributedto the ever-increasing adoption of media-friendly mobileance and automatic reroutingdevices such as tablets and smartphones. In the fourth Google Voice search, enabled in seven languages in- quarter of 2009, a mere 23 percent of U.S. consumershad smartphones. In comparison, smartphone penetracluding English, Mandarin and Spanishtion grew to 31 percent by the end of 2010. Additionally, Google Goggles, an image-recognition technology it has become much easier to find, view and share mothat lets users take pictures of objects with their mobile bile video with the proliferation of the mobile Web andphones and generates information based on the photos app usage.PAGE 7Mobile MarketerCLASSIC GUIDE TO STATE OF MOBILE ADVERTISING 2011

Primary driversOverall, the advancement of network technologies,lower mobile data cost, adoption of smartphonesand an increase in application and mobile Webusability are obvious drivers of mobile advertising. Marketers follow consumer eyeballs.The rate of global mobile Web content growth over twoyears has outpaced the growth of the desktop Internetover that same period, according to dotMobi’s MobileWeb Progress study. DotMobi’s 2008 study showed150,000 mobile-ready Web sites, while the 2010 studyshowed approximately 3.01 million sites, representingan incredible two-year growth of more than 2,000 percent. And that growth level significantly outpaces earlydesktop growth.Web analyst firm Netcraft found that, between 1996 and1998, the size of the desktop Web grew from 150,000sites to 1 million sites, a growth rate of 1,333 percent,compared to the mobile Web’s 2,000 percent growth inthe equivalent timeframe. With this explosive growthin mobile Web sites and the aforementioned explosionin mobile applications, it is no wonder that mobile advertising was about 3 percent of marketers’ total onlineadvertising budgets in 2010. IDC expects this number togrow to 5 percent in 2011.There is a lot of activity on the mobile Web, and advertisers finally understand that it is an effective marketing channel. Additionally, the mobile phone is a personaldevice. It enables in-your-face advertising. The ads aremore personal than on the PC. Another reason for theexpected growth in mobile advertising budgets in 2011is that, for marketers, it is about the results and the effectiveness of a channel. Mobile is starting to make aname for itself with ads that see grand results. Ad unitsare getting more sophisticated and ROI is increasinglybeing proven in the channel. IDC expects there will bemore mobile Internet traffic than the desktop, meaningmobile display and mobile search will outgrow their PCInternet counterparts.Consumer acceptance of mobile ads is also a driver, according to eMarketer. Consumers are actually becomingPAGE 8comfortable viewing mobile ads on their devices, with 38percent of almost 4,400 individuals that comScore andInMobi polled in August 2010 stating they felt mobileads serve an important purpose. Another 25 percent saidthat they were getting used to seeing mobile ads. Only10 percent said that they were uncomfortable seeing mobile ads and 12 percent said they were downright intrusive. Males are more comfortable than females in beingserved and interacting with mobile ads. Users under theage of 25 were most likely to find value in mobile ads.“Few people are able to galvanize marketers and the public like Apple CEO Steve Jobs. The launch of the iPad, anew iPhone and the iAd advertising platform in the spaceof several months arguably has been the single most effective catalyst to date for mobile advertising.” –MobileAdvertising and Marketing: Past the Tipping Point, eMarketer, October 2010Apple’s iAd mobile ad network became a standard fordeveloping and delivering ads for the iPhone ecosystem.As a majority of mobile ads were static images on theiPhone, iAd interactivity ushered in a new age of mobile advertising opportunities. The platform gave contentMobile MarketerCLASSIC GUIDE TO STATE OF MOBILE ADVERTISING 2011

creators designing browser-based ads an additional opportunity in the mobile ad space, allowing them to createanimated, interactive ads. IAd, when first launched wasan ad experience that piqued users’ interest. As such, users were more apt to click on an iAd just to check outApple’s take on what a new generation ad should offer.This burst of interest alone has had a high impact onoverall mobile advertising click-though rates.which they spend the most time. These channels – mobile, social media and online –are being thrown in to themarketing mix finally, and with respectable budgets.The acquisitions of both AdMob (Google) and QuattroWireless (Apple) were proof that as mobile phone usageincreases, growth in mobile advertising is only going toaccelerate. The deals resulted in developers and publishers getting better advertising solutions, marketers findJust having someone such as Apple and Mr. Jobs as a ing new ways to reach consumers, and users getting betcreative force in the space is a huge advantage for driv- ter ads and more free content.ing attention and pushing the boundaries of where it cango. He did a good job of turning five-figure budgets in The iPhone 4 and other 4G-capable phones are also drivaverage ad spend to six- and seven figures. He proved ers of mobile advertising serve as the ideal canvas forthe validity of rich ad experiences. He really speaks to interactive experiences. Every new generation of mobilechief marketing officers to tap into those print and TV devices to come out of the smartphone manufacturersbudgets. At the end of the day, the mobile advertisingecosystem is in a better place because of the support ofApple and Mr. Jobs.The iAd platform opened the industry’s eyes in terms ofwhat is possible in mobile. It also served as a catalystfor more sophisticated, interactive and engaging mobileadvertising experiences. Since its launch, there has beena fundamental shift in mobile advertising. Mobile companies, from mobile marketing specialists such as Hipcricket to mobile ad networks such as Millennial Media,Jumptap and Greystripe, began to enhance their offeringsin a bid to compete with giants Google and Apple. WithGoogle’s acquisition of AdMob having been completed in2010 and iAd’s launch that same year, independent players both large and small began innovating and punchingabove their weight.Google’s acquisition of AdMob was validation that mobile advertising is real, that the results are measurableand have considerable value and that mobile should bea factor, if not a central pillar, in any brand marketingstrategy going forward.With the newfound validation of the mobile industry, there was an influx of major brands to the mobilebandwagon. With the explosion of mobile activity, siloedcampaigns are becoming a thing of the past. Consumers’ dependence on mobile has already changed themforever. They want to be spoken to via the channels inPAGE 9Mobile MarketerCLASSIC GUIDE TO STATE OF MOBILE ADVERTISING 2011

brings with it an exciting new set of features for developers to implement in their apps, which, in turn, advertisers could take advantage of within their ads. Google’sAndroid and Apple’s iPhone 4 have both stretched thelimits of what the industry once thought was possible inmobile advertising.owning smartphones. Hence, conversations are shifting. While there are a lot of feature phones out there,a high percentage of people who are interacting withmobile marketing campaigns are smartphone users.Looking at consumers ages 25-34, about 50 percent ofthem have smartphones, so the reach is getting there.Text messaging still has the most reach, because bothRich media and innovative ad units have garnered the smartphones and feature phones are SMS-enabled. Butattention of consumers, making the probability for a when marketers look at the mobile Internet, apps, vidclick-through higher. In fact, research firm InsightExpress eo and social networking, the large majority of trafficfound that mobile advertising is four-to-five times more is coming from smartphone users, which is a differenteffective than online advertising, on average. That is due audience altogether.to various factors, including lack of clutter in mobile,typically one ad per page, and the mobile pages them- Consumer behavior on mobile is another driver of mobileselves typically do not have a lot of stuff going on—they advertising. For example, 82 percent of consumers havetend to be very clean. Also, the proportion of the ad on a used their mobile phones in a store, 55 percent in a docmobile screen is greater, so it gets more share of eyeballs. tor’s office or hospital, 17 percent during a movie at thetheater, 14 percent while flying on a plane and 7 percentThe iPad and other tablet devices are also drivers of mo- during church service. Around 17 percent of mobile usersbile advertising. On the heels of Mr. Jobs’ official intro- have shown a clerk in a store a picture of a product onduction of Apple’s iPad, marketers and developers raced their mobile phone, saying in effect, “I want this please,”out the door with apps and advertising services for the which is a new shopping behavior that is surprisingly benew tablet. The iPad gave publishers and brands new and ing driven by men. Forty-five percent of users check theircreative opportunities for creating meaningful and truly mobile devices first thing in the morning, according toengaging experiences with the consumer. What makes InsightExpress. Marketers recognize the opportunitiesthe device most attractive to marketers is its form factor with advertising to these mobile consumers.for content consumption.The form factor allows brands to maximize how they interact with users and provide an engaging brand experience through mobile advertising. The opportunity liesin the fact that the iPad can support instant loading,HD-quality video and other interactive content such ashigh-definition display, pinch-to-zoom and 3D rotation.These features give brands the opportunity to showcasethe finer details of their products from all angles andthe highest resolutions, via an unprecedented mobileadvertising experience.“It’s easy to point to iPad as the best performing device,but the reality is that we’re seeing double-digit performance on iPhone and Android as well.” – Elena Perez,director of marketing at Medialets, New YorkAccording to InsightExpress, smartphones are thenew phone, with more than a third of mobile ownersPAGE 10Mobile MarketerCLASSIC GUIDE TO STATE OF MOBILE ADVERTISING 2011

What’s working and what’s notSuccess in mobile advertising depends entirely onthe approach taken and whether it was right forthat specific campaign’s goals. If execution is donestrategically, then all the ad formats work, whether it betext, Web, video or app.substandard mobile experiences.Companies that are not prioritizing what is importantfor the mobile user specifically are missing the ball. Thismeans thinking of all the possible ways of making lifeeasier for consumers who are on the go – for example,Brands and marketers need to remember to take the con- helping them find directions to a business, finding thetext in which the consumer is seeing the ad. Therefore, hours of operation and click-to-call to get in touch withrepurposed static banners and videos that are placed a customer service representative. It is a shame that sonext to unrelated mobile content will not work. These many marketers are not taking advantage of mobile-speunits fail from a creative and media planning perspective cific functionality. The mobile device’s screen is smallerto pull the user into the ad experience. Another impor- than the PC’s and marketers need to keep that in mind.tant step is to make sure that the creative considers theuser experience of its call to action. Making consumerscomplete numerous steps for a conversion is not going towork, especially for those who are on the go.“Mobile advertising that works starts with emerging behaviors rather than emerging technologies. There are amillion different things that a marketer can do on mobile. Deciding what to do is often the hardest part of theprocess. But it is much easier when you approach it withsound business logic and ask the following questions.What consumer insight are you trying to address as aproduct and as a brand? What is the message that youare trying to communicate? What are your business objectives? Mobile advertising has worked when the decision of what to do is based on how well it aligns with theanswers to those questions.” – Paul Gelb, vice presidentand mobile practice lead at Razorfish, New York.Failing to mobile-optimize the post-click experience isone of the most frustrating experiences for mobile users. It is an ultimate failure on the part of the marketer.One would think that this is not a common dilemma.However, Google conducted a study looking into thepost-click experience for some of its largest advertiserson mobile. The company used 200 diagnostic points tomeasure each advertiser’s mobile readiness, with criteriasuch as load time, device detection and mobile optimization. Google found that only about 21 percent of itslargest advertisers have a mobile-optimized Web presence. That means that more than 79 percent are servingPAGE 11Mobile MarketerCLASSIC GUIDE TO STATE OF MOBILE ADVERTISING 2011

If all of the most relevant information forthe mobile customeris not placed front andcenter on a mobile advertising landing page,consider the campaigna failure.cal queries, whether or not the keywords entered include local modifiers such as a city, state or ZIP code.Therefore, a consumer who searches for “Target” on hermobile device is expecting to get results listing the Target locations closest to her. The Kelsey Group reportedin 2009 that about one in three mobile searches havelocal intent. Additionally, marketers that are not usingmobile-specific actions within their mobile search campaigns are missing the ball. A click-to-call function isHarris Interactive con- a no-brainer and click-to-map, click-to-directions andducted a survey on other useful actions for a mobile user should be incorbehalf of Pontiflex in porated. The mobile search results must be differentDecember 2010. The from the desktop results, tailored specifically for mobilestudy found that ROI and accountability are of utmost searchers, otherwise marketers are not getting the mostimportance to brands and agencies, and while mobile out of their campaigns.advertising has proven its effectiveness when executedproperly, click-through rate is a limited metric at best. A spray-and-pray approach to SMS, display and videoThis means that marketers need to take into account advertising is not going to work, either. Targeting is key.more than just the click.Gartner predicts mobile will be the No. 1 Internet accessdevice by 2013. ABI Research believes that 8 percent ofForty-seven percent of mobile application users say they total ecommerce sales will come from mobile by 2014.click or tap on mobile ads more often by mistake than Also, according to comScore, nearly one-third of all mo

Online Marketing. Mobile search works the same way. Google currently dominates mobile search advertising, with an ad revenue market share of 91.4 percent. Plenty of mobile Internet traffic comes from people looking for stuff on the go. IDC expects mobile search to grow. EMarketer forecasts confirm this growth. Mobile search