During mid-January—one of the hottest times for sales of big- screen TVs—users of Pandora’s iPhone app found themselves directed to their nearest Best Buy to find a deal on a new Sharp flatscreen. The ads were served to consumers when they were in close range of the big box store, and when they clicked the ad it gave them click-to-call access to the local Best Buy, a map to the store’s location and information on whether or not a particular TV was available in-store. Consumers also had the option to purchase the TV directly via Best Buy’s mobile website.
This is the world of mobile advertising, where geography and context drive immediate consumer engagement via clicks, calls and visits. Brands are looking to reach consumers via mobile at the moment they are in position to make a buying decision or at the moment the consumer specifically expresses interest in a relevant topic. This may be in-mall, at the time of a mobile search or as someone needs more information from a print or outdoor ad.
The mobile ad market is growing at a far faster rate than had been expected. In January, eMarketer forecast that mobile ad spending in the U.S. reached $1.45 billion in 2011, and would grow 80 percent to $2.61 billion in 2012. The market analyst had previously forecast a 47 percent growth rate in 2012. EMarketer attributes its more aggressive forecast to the rapid ascension of Google’s mobile search ad business, advertisers’ growing attraction to display inventory on tablet and smartphone devices, and the growing roster of mobile ad networks, including Google’s AdMob, Apple’s iAd and Millennial Media.
In fact, mobile search today accounts for about half of all mobile ad dollars—eMarketer forecasts it at 49 percent of the market. And that share is expected to remain fairly steady through 2016.
“Consumers are looking [for information] within five miles of where they are,” says Monica Ho, VP of marketing at xAd, a mobile-local ad network. “Considering that, I find it interesting that a lot more isn’t locally focused.”
Ho and others stress the importance of understanding mobile user behavior and how it differs from other digital behaviors. Desktop and laptop users may search for information for future use, but mobile users tend toward a “need it now” attitude. Mobile users have “intent”—they search for information at the moment they intend to do something with it. In that way, they’re closer to old-style “Yellow Pages” users than they are to “Encyclopedia” browsers. They’ll look for banking information on their way to the bank; they’ll look for restaurant options on their way to dinner.
Comcast incorporated this approach in its recent mobile search campaign. Users searching for Comcast keywords were directed to mobile-optimized sites with mobile-specific functions such as streamlined ordering, checking service availability at the nearest location and click-to-call for assistance. Comcast also implemented a mobile ad extension that allowed users to call Comcast directly from the search results page on their phone.
By advertising on the right channel with an approach optimized for mobile, Comcast capitalized on the many consumers already searching for Comcast services on mobile but who previously could not access needed information as easily. According to a case study from Google, the Comcast campaign averages more than one million impressions on mobile per month. Comcast’s mobile sales have surged and the mobile channel now drives 10 percent of all online sales.
Mobile Display and Rich Media
While mobile search is critical to local targeting, mobile banner and display also has a role—it accounts for about a third of mobile ad spending, according to eMarketer. But agencies and brands buying mobile display are often faced with a dilemma: How do they provide engaging rich media campaigns when the final user experience may be influenced by technical issues beyond their control? After all, it’s not uncommon for users to be frustrated when promised interactivity fails to emerge due to a faulty network connection.
So how do advertisers use the latest rich media innovations to get consumer attention while preserving performance? If a consumer is stuck in a mobile network dead zone, can he or she be expected to engage with a rich media ad that requires some bandwidth?
“At the end of the day, you have to be rich and mobile,” says Srini Dharmaji, chairman and CEO of GoldSpot Media, a provider of mobile rich media ad platforms. GoldSpot’s solution takes advantage of HTML5, which makes it easier for rich media to be created at a reasonable bandwidth. “Engagement can be influenced by factors beyond the user’s control, which is why you have to take into account what is a good experience.”
Mobile is also a critical medium for reaching the Hispanic market. Latinos are more likely than average American households to have cell phones with Internet and video capabilities and text more than any other race or ethnicity, according to Nielsen. Jorge Rincon, CEO of RedMas, a mobile agency that focuses on the Hispanic market, noted a recent campaign his company ran with an insurance company targeting Latinos in Houston and El Paso, Tex. The mobile display ads featured a click-to-call feature that allowed users to get a quick quote via their smartphone.
Still, this level of ethnic targeting is mostly at the city level, but could soon move down to zip codes. “It’s a matter of volume,” Rincon says. “We’ll be there soon.”
The immediacy of mobile interaction also takes shape when consumers use a smartphone to get more information from something they’ve seen in print. QR codes and other bar codes have been one option, but their rate of adoption has been slower than many anticipated. According to Forrester Research, just 15 percent of smartphone owners use a scanning app. Still, there is demand for some kind of “print to mobile” or “broadcast to mobile” option.
“Mobile response codes in print are gaining popularity with advertisers and consumers alike. As brands become more successful with their print-to-mobile campaigns, they will look to extend their reach beyond print to television and radio programming, music and movies,” said Ed Knudson, EVP of sales and marketing at Digimarc, which does digital watermarking for print-to-mobile. “Our digital watermarking technology is uniquely suited to provide the instant gratification consumers demand across all of these