Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

Reason #1    All Of Us

Group M released some statistics last month that projected mobile to comprise one half of 1% of total global advertising expenditures in 2009.  It is projected to be about .8% in 2010.  On the other hand, television advertising expenditures were projected to be about 38% of total global advertising expenditures in 2009 and 39% in 2010.

Compare that to a Samsung Mobile study earlier this month that was published in the Chicago Tribune that states that the average Chicago cell phone user spends three hours a day chatting or sending text, picture and video messages.  And to a March 2009 study by the Nielsen’s Council for Research intelligence that found that the average American spends just over five hours watching television per day.

Aren’t you just amazed by what a small percentage mobile advertising is of total worldwide advertising expenditures and what a large percentage of time we spend on mobile devices when compared to time spent on other media.  Why the difference? 

I suspect that one reason is because we as marketers spend a disproportionately large amount of time thinking about what we want to tell consumers and how we want to tell it, and a disproportionately small amount of time focusing on how they want to receive that information and the unique characteristics of the medium upon which it is received.  I also suspect that it is because we are afraid to try something new with this new medium of mobile.

In order to be successful with communicating brand, product and service information on mobile, we need to garner and act upon a better understanding of how people receive information, engage with that information and forge relationships specifically on the mobile phone.  And, then we need to change our way of marketing on mobile to take advantage of this new insight.

The mobile phone is a very personal, highly interactive, communication ecosystem.  We need to develop marketing and advertising that recognizes the uniqueness and manifestations of each of those terms.

Very Personal            63% of mobile phone users agreed with the statement that “My phone is very personal to me”.  Certainly very few consumers would ever agree with that statement if it referenced their television or their radio.  Marketers need to take the personal nature of the mobile phone into account when designing campaigns so that the consumer receives the message on the device in the same way they like to receive other messages in their personal space.

Highly Interactive      Most time spent on the mobile phone is while involved in an interactive activity whether it is communicating back and forth via voice and SMS, while playing with a game or interacting with an app.  Yet, today, most advertising on the mobile phone toady is still of the one-way broadcast variety via mobile banners or SMS.  Marketers need to take the ability to create interactivity to a whole new level in order to be more effective on the mobile phone.

Communication Ecosystem                    The mobile phone has developed, and is continually developing, behavioral mores and cultural norms that have very serious implications for marketers.  Violate one of those norms, and the consequences can be severe. 

Yet, marketers continue to treat the mobile phone as yet another screen to “repurpose content” or as a quick campaign add-on to “target a hard to reach audience”.  It will be the brands that focus on actively leveraging the behavioral use patterns of the mobile phone and their attendant cultural norms that will succeed.

I recall the old saying that “You’ll never get fired for buying IBM” which meant that people concerned about their jobs were less likely to get fired for taking the safe road.  And certainly, with today’s uncertain employment environment it is very tempting to continue to market on mobile with the tried and true SMS messaging as well as mobile banners and of course, race into the creation of in-app campaigns.  Clients (or employers), the reasoning goes, are less likely to fire you for doing the types of campaigns they are used to seeing with their competitors.

But while each of those types of campaigns can be successful in the right circumstances, are they going to be most successful on mobile with your brand and your message?  Perhaps your message could be more successfully received by embracing mobile’s new paradigm.  Perhaps by being open to the new possibilities available in mobile, your efforts will pave the way to allow the medium to garner its rightful percentage of global advertising rather than the de minimus amount it has today.

So here’s our challenge:  Be among the first to embrace the paradigm change of mobile, even if there is an associated cost or an associated risk.  Imagine if we were the first to embrace a new thought, a new marketing idea, a new advertising business model, or new hardware or software innovation – not because we followed the crowd, but because we understood that with the risk of being first to say yes, comes all of the rewards of being a new leader in our industry.

                           “The policy of being cautious is the greatest risk of all”   

                                                   — Jawaharial Nehru   

21 Comments

Filed under advertising, iPhone, marketing, mms, mobile, mobile advertising, sms, wireless

21 responses to “Ten Reasons Why Mobile Advertising Has Not Reached Its Potential

  1. I think that people in the mobile industry have been overtouting stats like the one mentioned in the article:

    “Compare that to a Samsung Mobile study earlier this month that was published in the Chicago Tribune that states that the average Chicago cell phone user spends three hours a day chatting or sending text, picture and video messages. ”

    I myself have been guilty quote numbers such as this, but at the end of the day, they are not good comparisons to other channels. When people consume TV, they are getting exposed to ads. When people are talking or texting with friends, it is not an ad supported action. A more relevant stat would be to measure how much time a consumer interacts with branded mobile content and apps, ad supported SMS or mobile display banners. This I assume would be much more on par with the current spending levels in mobile.

    • markjaffe

      Thanks for your comment, David.

      In today’s ad supported environment, talking and texting with friends is not an ad supported activity. Mobile Mandala’s position, however, is that we need to be open to new and different ways to market and advertise. Perhaps in the future, a more effective ad supported action would be to create advertising that appears during a texting activity with the permission of the participants. In that case, the Chicago study would be quite relevant indeed!

  2. Mark,

    I think there is one major challenge to the stats you mention. Yes, people spend an increasing amount of time on their phones. The question we need to ask is can this time allow for ad interruptions? Are we too engaged in the communication and activity we do on the phone to be receptive to advertising at that moment?

    I agree that we need to find new formats and concepts to make mobile the strong advertising channel it could be. If I had cracked that one I would be working on it right now and most likely not searching the blogosphere for seeds for the future mobile marketing.

    Keep up the good writing. I will follow!

    /Per-Fredrik

  3. Sean Holveck

    All good comments about ad innovation in a mobile atmoshphere. What we must remember is that our mobile phones are devices that are personal as mentioned, but we use them for a purpose. I don’t believe people want ads on a phone or mobile device that they did not ask for, I know I would not. It’s like a popup window that makes the brand image a negative one rather than a purposeful one.

    Mobile apps to give a brand experience and a campaign partnered with print, outdoor, or other medium to encourage people to find it would be much more useful. Encourage a positive experience with your consumers. Mobile is not really a place to earn more or new consumers.

  4. Hi Mark, Thanks for the interesting post about mobile marketing.

    It seems to me like there is a natural intersection with mobile marketing and social media, since many users spend time on mobile devices interacting with friends on Twitter, Facebook, etc. One interesting thing about SM is that it allows the “receiver” of the marketing message to also become a “sender” of a modified message. Seems like this type of behavior is nicely positioned for developing marketing platforms for mobile devices. I’d be curious to know if you have come across any case studies within this space that include examples of what’s been done, as well as definitions for how success has been measured thus far. Thanks again for the thought provoking article!

    Renee Cassard

  5. Randy Giusto

    I agree with the other posters that for mobile, targeted ads needs to be provided if you are going to provide an ad at all while texting. Personally, I think serving up an ad while a person is trying to be productive (texting) is not going to be received well.

    But everyone is still missing the #1 point. The biggest issue in mobile advertising today is the lack of decent analytics on the effectiveness of the ad campaign. This is the biggest problem that media companies have when wanting to run mobile campaigns.

    On the web, a wealth of analytics is available because of standards and are provided by big companies such as Nielsen, Omniture, and comScore.

    On mobile, java is not deployed on all handsets, there are 5 competing operating systems on smart phones, and multiple browsers being used. Then you have carriers who still have walled gardens and control the keys to the gate.

    There are a number of mobile analytics startups out there trying to make it happen, each with a different approach. But mobile remains fragmented if you are running an ad campaign and want to know what the hell the response was.

    I’ve written about this a bit on my blog at http://newdigitalcafe.com and I’ve been talking to many analytics firms (web and mobile) about these issues, for the past year.

  6. On mobile analytics firm to check out is Bango at http://bango.com/

  7. Darin

    Could it be that Mobile advertising expenditures are so much lower in comparison to television based on the cost difference.

    It often cost a few million dollars per month just to run a tv commercial on one of the four cable markets in New York City. Where as with mobile advertising you are merely paying a few cents per impression or click.

    Seems like this make a huge difference when calculating total expenditures.

  8. Hi Mark,

    thanks for a great post. :)
    And please all look at Group M projections from a different angle …
    The good news is that already 0,8% of ad spends will go to the mobile – which is a relatively new medium, while only 0,5% will be taken by the Cinema – which is an established one.

    Best regards, Kazimierz Piekarz

  9. Great article Mark. Very insightful. To see some examples of innovative mobile campaigns, I encourage you to visit http://www.biginteractive.com.

    Warm regards,

    Orris

  10. Jonathan

    Mark,

    Another great blog – and I agree with all the core points of your article. You bring up the point that the mobile medium is a very personal one and as marketers, we need to find a balance between delivering messages that are pertinent and valuable to each user we are trying to reach out to, all while respecting and not violating their privacy.

    As well, behavioral targeting is a big topic in this space. Providing relevant content will only be possible if our strategies and approach to behavioral targeting is delivered correctly. There is a lot of controversy when it comes to behavioral targeting, mobile cookies, etc. but in order to deliver relevant content to each and every user and not just in hopes of reaching the critical mass such as TV, radio, or most print advertising, we must strengthen our delivery methods and practices when it comes to our capability to deliver relevant content to specific users.

    We are just at the early beginnings of mobile marketing and advertising but we’ve all heard it before – ‘Mobile is where the internet was 10 years ago.’ That means the explosion and take off for mobile marketing and advertising is just around the corner. To see analysts say that the market will grow from 1/2 of 1% of ad revenues in 2009 to .8% in 2010 is a great story. In 2011, it’ll grow some more, and maybe in the next 5 – 8 years, we’ll see mobile become comparable or even surpass the ad spending of some traditional mediums. At the end of the day, there is growth and even greater growth potential. If you asked someone 2 years ago what a mobile advertisement was, you’d see head scratching from most people. Today, there is a significant understanding and some acceptance of what a mobile advertisement is. And to me, this is progress, just a start to something that will really become the norm.

    There are channels in the last few years that are really starting to shape and enable what we do as marketers. Social networking is just one of them. The mobile space is another. The holy grail for marketers is understanding what the consumer wants and how they’d like the information they are going to consume delivered to them. We still have a lot to learn when it comes to mobile, but there is a growing trend from many big brands that are seeing some measurable success to jump right in – the risks they are taking are yielding or, in many cases, surpassing their expected returns.

    We have a lot more work to do in the mobile space, but we are definitely making grounds and there is no doubt in my mind that mobile will continue to grow as it has been over the past few years. One testament to that is, I may spend more hours a day watching tv or on the internet vs using my mobile device, but my monthly bills for TV vs mobile is pretty comparable. If you add up all the applications I purchase on a monthly basis, the data plans + voice, and my mobile internet usage in addition to the thousands of text I send a receive a month, I strongly believe my mobile gets more face time than my television. And what happens when the commercials are on in between shows? I’m sending a text, answering an email via my phone, checking FaceBook, finishing up on an article fromthe CNN or NY Times iPhone app or most likely downloading the next best app. So how much potential is there for the 3rd screen? It’s only a matter of time.

  11. Mark, I would echo a lot of what Jonathan says in his reply above. Though I would add that what often happens when new distribution platforms emerge is that marketers often borrow from old strategies they are familiar with. Examples: early TV employed radio models, in the same way many people are using TV models over the Internet. The mobile device is unique and as marketers we should exploit it’s strengths. I encourage you to read my white paper on the Layar phone app and emergence of augmented reality as a way of creating relevant advertising on the phone. http://www.scribd.com/doc/21191672/Augmented-Reality-A-New-World-for-Advertising

  12. Pingback: Great Discussion on Why Mobile Advertising Has Not Reached Its Potential! « NewDigitalCafé

  13. Warren McGuffin

    True, but spending 3 hours a day on the phone is different from spending 3 hours a day on the part of a phone that advertising can reach.

  14. I think another way of looking at your persuasive argument is to note that the mobile phone is not a small PC, as advertisers seem to view it. It is small, interaction by text to surf the web can be uncomfortable, and there isn’t enough room for content and ads to be side-by-side effectively. On the other hand, every mobile phone has a microphone and effective use of today’s very effective speech recognition technology opens opportunities for new ways to involve consumers. Try Microsoft’s ad-supported 800-BING411 and you might be surprised how much that one number can give you–a business call directory, of course, but also stock quotes, weather, movie times in your area, driving directions, and more. And it works from EVERY phone, not just smartphones.
    - Bill Meisel, Editor, Speech Strategy News

  15. brwalsh

    Good points all:
    Two points I wanted to make: (1) the delivered advertising needs to be *relevant* to the mobile subscriber who after all is expecting his or her experience to remain personalized, and (2) yet this must be accomplished without compromising personal privacy. For these 2 objectives, the advertising ecosystem needs to leverage the often-neglected role the Operator can play in targeted online advertising. See more on this at: https://www.myciscocommunity.com/community/sp/mobility/blog/2009/09/15/mobile-advertising-the-operator-holds-the-advantage

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  19. Welcome to the land of the mobile marketer, I am new to this foreign land. But one thing that I know is in order to effectively communicate one must first learn the language. Mobile communications is much different from traditional land lines because most people carry the mobile phone with them everywhere they go. Even at home we will keep it close, so the mobile become an extension of who we are. We have learned to peacefully co-exists with this technology. The mobile marketer must approach with caution and clearly state his intentions before being allowed into the personal space of the mobile user.”Permission based fusion marketing” is a technique I am trying hard to master. My mission is to be as transparent as possible while have a place in the mobile users world. Example: SMS based flyering for a networking event, for more information text your email address to “Network” at 123456 (don’t do it, just an example). I have auto responders that will send basic info on the event to the email with a contact form. A message will also auto respond to the mobile device followed by a call. Notifying the mobile user that more info is forth coming. Lead capture is key to success in mobile marketing along with rapid response from a human. Building in the “human factor” into every campaign will increase ROI. Not just building massive phone numbers list, but building relationships with the human on the other side of the device.

    http://apps.attainresponse.com/MediaF5/liveRecording.htm?id=49934 is a 5 minute explanation of our mobi F5 mobile marketing tool. It is a new edition to my online marketing kit.

    Regards,
    M. Johnson

  20. Pingback: Great Discussion on Why Mobile Advertising Has Not Reached Its Potential! | NewDigitalCafé

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