I recently had the honour of being asked to judge the 2010 AIMIA Awards in both Best Mobile Advertising and Best Mobile Products categories.
This was a fascinating exercise on a couple of levels. Perhaps the first thing to strike me was the vast disparity between the number of entries in the mobile advertising category vs mobile product – six versus 21. Mobile products and services are starting to find their place in the world, but obviously mobile advertising has a lot of catching up to do.
Where’s the web?
The second thing that was interesting was that in the Mobile Advertising category there were a couple of iPhone Apps, and integrated Bluetooth campaign, some content offerings, some multi-platform implementations – but there wasn’t a mobile web campaign to be seen.
Given that according to AIMIA – 20% of the Australian population use the mobile web every day it seems odd that more effort isn’t going into creating innovative advertising campaigns for this channel.
It seems that every proverbial marketer and their dog wants an app – but mobile web is being shunned. My estimates are that less than 0.8% of the total digital display ad spend will make it into the mobile channel this year.
And it doesn’t look like the Australian community is all alone in the world either. An article published recently in Advertising Age in the US documents a similar trend in the world’s largest advertising market.
In the US, it seems, a vast proportion of “mobile” ad dollars are going into the creation of smartphone (read iPhone) apps.
The richer get richer?
The argument in the US (and I’ve heard it used here too) is that apps are a better way of fostering an engagement between a consumer and a brand because of the rich interactivity, the tactile nature of the device and the indisputable “buzz” that still surrounds high end smartphones.
The counter argument is that apps are not scaleable, they have to be redeveloped for each new platform and the numbers just aren’t there. A few thousand downloads gets you to the top of your category in the AU App Store, but these are not usage figures that are going to make many marketers at the top end of town fall out of their chairs.
Storm in an iCup?
The Ad Age article I mentioned earlier suggests that the hype surrounding apps will die down and that the mobile web will become the predominant mobile interaction between consumers and content/services/advertising. I don’t disagree with this assertion, however there are a couple of points media owners and marketers need to get their heads around before we start seeing some serious traction (ie spend) in this space.
Mobile advertising doesn’t (or shouldn’t) exist
At the end of the day, marketers don’t give a damn about mobile advertising. They don’t give a damn about advertising full stop. What they are trying to do is get a brand message to a consumer in an engaging way. That’s why the digital media industry (all of it) needs to stop thinking about “Mobile Advertising”.
Mobile devices are just another means for brands to access consumers. What’s interesting about these mobile devices is that they can be engaging in a way that previous media has never been able to be – they are location aware, motion sensitive, personalisable, and always with us.
They are also, primarily, COMMUNICATION devices.
Smaller, slower and more expensive ain’t ever going to work
One of the big issues that I’ve observed in the mobile industry (and I’ve been in this game since 2001), is that developers, creatives, brands and publishers seem to view mobile as a smaller, portable version of the PC and develop content and creative accordingly. So what we end up with is smaller, slower, more expensive versions of what we started with. And surprisingly consumers aren’t thrilled about this.
Don’t start with your current site, campaign, creative – start with your consumer.
It’s the measurement stupid
I’ve said it before and I’ll say it again. Advertising in the mobile space will not be taken seriously until there are some standards. What is being measured? How it is being measured? And how is this related to the fundamental missing piece in much advertising (be it m-sites, banners, apps, SMS campaigns – you name it!). Return on Investment.
We can see a marketer putting $1 in – but where do we show the marketer getting $1.xx out.
Over the past two months I’ve been doing the rounds, buying coffees for a large number of luminaries in the Australian digital media industry.
The purpose of these discussion has been two-fold. Firstly to fuel my spiralling caffeine addiction and secondly to start developing a map of the digital industry and the issues and opportunities facing it.
A couple of themes have surfaced with alarming frequency – in fact in almost every meeting I’ve had it’s been mentioned that value and success are getting harder to quantify and to communicate. While there are established pricing models and success metrics, some are questioning whether these are still as appropriate as they once were. Others are questioning whether they’re even valid.
Two articles I’ve come across in the last few days have served to shine a spotlight on these issues.
The first “Let’s Kill The CPM” by the illustrious Shelby Bonnie (a founder of CNet and former Chairman of the IAB in the US) argues that the CPM – cost per thousand impressions, the basic sales model of virtually digital display advertising – should be scrapped.
The second, “What to Measure? Only 16% of the Web Is Clicking Display Ads” from Advertising Age, reviews a study from ComScore and media buying giant Starcom. The report showed that “the number of people online who click display ads has dropped 50% in less than two years, and only 8% of internet users account for 85% of all clicks”.
Given that all digital media buys are based on CPM and the success of all of each of these buys is measured on click-through rate (CTR), these seem to amount to a call for a fairly radical rework of digital advertising worldwide.
It seems that the GFC has had a fairly profound impact on the advertising industry in general – and the digital advertising industry in particular.
Online display advertising is still growing in Australia – 19% for the last financial year according to Frost & Sullivan with similar rates of growth predicted over the next few years. However some Australian internet execs are privately suggesting that the GFC has resulted in – or accelerated a tectonic shift in the way “traditional” online media is bought and sold.
At first glance this shift seems to be a product of basic economics – advertisers reduce budget, publishers compete harder for this budget, and prices come down. High school economics, right?
This paradigm would also suggest that when things start picking up, the pendulum will swing back in the publishers’ favour and prices will rise. In this case it doesn’t necessarily seem to be happening – prices seem to be coming back, but not necessarily as far or as fast.
There could be any number of things behind this shift. But in my opinion increased fragmentation of the online has worked in the favour of the advertising buy side. There are simply more sellers willing to compete harder for digital advertising kitty that’s not growing fast enough to sustain them all.
While Shelby Bonnie suggests writing off the CPM model, that’s easier said than done. The entire digital media buying, selling and fulfilment infrastructures are based on the concept of CPM. And moving to cost per click (CPC) or cost per acquisition (CPA) models are going to cause even bigger problems for display advertising. If people aren’t clicking on display ads there is no CPC, and by extension how can they be acquired as customers from ads they haven’t clicked on?
And as for ComScore/Starcom – while they are pretty bleak in their assessment of click-through as a measure of success, they are not writing off digital display. Their contention is that online display coupled with search advertising can be a potent combination – that is, display advertising drives search behaviour.
So to my mind it seems that online display – while theoretically accountable for delivering customers – is and always has been a square peg in a round hole. Marketers perhaps need to accept that engaging consumers with their brand is a different process from driving purchase activity.
Neither is more important than the other, but you can’t necessarily achieve both objectives from the same piece of creative.