Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
As adoption of the wireless web grows, so too does the Holy Grail of advertising: targeted, timely, contextualized ads delivered directly into the hands of engaged consumers. Despite this tempting proposition, advertisers have yet to take full advantage of the medium and its offerings. Most mobile ad units are, sad to say, just miniature versions of their online counterparts, as if the mobile screen and the mobile internet are only smaller versions of the PC. But this is not true! The differences of mobile marketing from traditional marketing are large enough to highlight its dire need for unique mobile ad units to tap its potential.
A growing industry
Mobile advertising is continuing its steady growth. In June, AdMob reported more than 6% month over month growth in mobile ads served, with growth in the US, the largest mobile ad market by far, outpacing much of the world. Our own data shows that advertisers of major companies planned on doubling their mobile ad spending in 2007, and total spending on mobile ads will soon reach the multi-billion dollar mark.
A lack of clarity
It will come as no surprise that more than a third of marketers hope to directly drive sales through their mobile ad campaigns, but so far most lack an effective means of driving or measuring impact with currently implemented ad units.
Compounding the matter are cellphone users who have been reluctant to engage or participate in mobile ad campaigns amid spam and privacy concerns and general disinterest in advertiser offerings. In fact, the most common consumer response upon receiving an ad on their mobile device is to do nothing.
Current click-through rates on mobile ads exceed those of online counterparts, but a lack of ROI limits further advertiser spending today. While many of these users are early adopters who are likely to engage more with a new service than the general public, it does highlight a particular facet: even among the strongest, most tech-savvy segment of the population, mobile advertisements do not have a strong enough call to action.
Early innovations
Large screen devices, and the iPhone in particular, stand out as an exception. Although this comes as no surprise, as these devices are benefiting from both a larger screen with more real estate to devote to advertisements and a full browser that is more conducive to delivering rich media formats. Rich media advertisements are important because they have higher CTRs than text ads and lead to more engagement from the consumer.
Cellphones are crying out for unique ad units that leverage location and context. If I search for “jeans” from mycell phone while standing in Union Square in San Francisco, an ad from one of the stores within walking distance of my location is much more likely to draw me in than an ad for a jean manufacturer or needing to click through in order put in a ZIP code for a part of town I probably don’t know. Similarly, searches for restaurants can benefit in by being targeted not only by location but also by things weather, time of day, and the current temperature – all factors that strongly influence my decision of where and what I’d like to eat.
Much of the early innovation has so far been limited to the iPhone with its large screen, full browser, new 3G network, and touch screen. AdMob has released new ad units for the device that have embedded “action icons” – this lets the advertiser define the call to action for the consumer, making it that much easier for the interested user to watch a video, launch an application, map or website, etc. GPShopper and NearbyNow are two companies who turn the cellphone into a retail tool by giving the user location-based information on their product searches and helping drive its users immediately and directly to retailers. Cellfire, a mobile coupon company, lets users see what hot deals are close by and then make a decision from there, tapping into people’s desire for a good deal they can use immediately.
These early examples are just the beginning, and some unpredicted and spectacular results will surely arrive once more companies and mobile advertisers – those eager to take advantage of this new market – start using the tools made available by networks providing a constant flow of information about a users location and context.
.And I want it now
Yes, the mobile ad market is still new and growing in fits and starts, but from all the data I’ve seen on thing seems clear: the most successful mobile ad operations have leveraged location, context, and a clear, compelling call to action in order to capitalize on what mobile consumers want most: instant gratification.
Questions or comments about this column? Contact Seth at [email protected] or Julie at [email protected] or contact RCR Wireless News at [email protected].
