Mobile Without Mistakes

“How do we not make the same mistakes the Internet guys made?” is the most common question I get from each of the “newer” media channels, whether it be digital out-of-home media, Internet protocol TV or mobile.

Looking back at my experience as CEO of the Interactive Advertising Bureau from 2001 to 2006, when the industry grew from $6 billion to $17 billion in online ad spending, it’s clear that success was not easily won. That’s hindsight, of course, for the online ad spending, but it’s opportunity for mobile advertising. No one wants to make the same mistakes, and everyone wants to get there quicker. 

There are a number of perspectives I gathered from that experience that I offer as relevant this time around.

A key obstacle was the degree to which marketers and agencies resisted the Internet as a viable ad medium despite facts to the contrary. They’d explain away their disinterest with a number of reasons, including “The Internet is not a mass medium” (false), or my favorite, “I don’t look at online ads myself” (which is equally untrue). All of these caused the vast majority to miss the opportunity right in front of them to build their company, their brands and, dare I say, even their own careers. 

So what is my prognosis for the mobile medium on this score?  

The good news is that that like the Internet, mobile already is a mass medium. With more than 1 billion handsets sold worldwide every year and a mobile broadband network infrastructure that can transmit those ads, mobile is at a basic level, ready for prime-time advertising. Equally important is that mobile has a number of unique attributes versus other media choices, including the locality, or geographic specificity, it can attain in addition to the potential personalization of the medium given that each consumer has his or her own handset. Those are both major differentiators and a major value to many marketers, therefore permitting mobile the opportunity to capture some share of the nearly $500 billion spent worldwide in advertising annually.

But what about the challenges to growth in mobile marketing and advertising?  First and foremost, they are up against the same thing we were: marketers’ inertia. As progressive as the advertising industry supposedly is, it’s an industry that is, in my experience, very slow to change. Painfully slow. Research we did at the IAB indicated that two-thirds of marketers describe themselves as “tried and true.” This is not a leading indicator of innovation, particularly when a key part of your job is to chase consumer eyeballs as they get continually bombarded with new places to look. 

But why don’t marketers adopt new media easily? There are a lot of reasons, but a big part of it is that they don’t recognize the value and they are uncomfortable with the new and, at least to them directly, unproven.

On some level this is human nature and understandable. Mobile advertising, just like the early days of online advertising, is emerging, complex and filled with techno speak. It would have been helpful back in 2001 to at least have a road map. How does the medium fit into what we’ve seen before? What are its unique capabilities? What is the necessary technology? What’s the existing and evolving industry value chain and potential business models? What are the current challenges, and what’s our best thinking on how they will be overcome?

But let’s return to the other point raised around the value of the mobile medium and the opportunity within it.

Seminal research we conducted at the IAB indicated that when online advertising was added to a media plan in the 10 to 15 percent of total media mix range, the overall campaign results would increase around 20 to 30 percent. This increase was in part a result of adding any new medium to a mix, but also because the demand was low relative to the supply. As a result, the pricing made online advertising the so-called “deal of the century.” There is no reason to believe that mobile will not have similar economics.