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Anandan Jayaraman, chief product and marketing officer at Connectiva Systems, on the promise that is mobile advertising.
“50% of advertising is wasted. The trouble is in knowing which 50%.” That famous aphorism is true to this day for the majority of ad spend. The web was a breath of fresh air for marketers used to spending hundreds of billions of dollars on TV, billboard and print, frustrated with the inability to measure advertising effectiveness.
Not surprisingly, in the last few years, web advertising, both display and search, has enjoyed tremendous growth. In 2010, worldwide online advertising spend was $55 billion worldwide.
There is now a bigger promise that could well turn out to be the largest advertising market ever. Mobile advertising.
Love mobile
The mobile phone is personal, intimate and unlike most other mediums, it is tied to a specific individual. The latent promise of mobile advertising that makes people salivate is the notion that advertising can be personalised and targeted to a specific user’s needs.
It is mass customisation redefined for the advertising industry with the ability to create a win-win for all parties: the advertiser can target his messages to niche audiences, the consumer is exposed to relevant advertising that subsidises his subscription and content; the operator, content producers and aggregators get a percentage of the value generated by advertising clicks.
The mobile advertising industry today is a tiny fraction of online (under $2 billion according to industry estimates) but is the cynosure of all eyes and is generating a lot of buzz. I believe that there are five critical success factors for mobile advertising to take off and realise its potential.
Ads to be form factor specific
The mobile is a completely different medium than the web and has its own unique characteristics. Web ads do not work on mobile and the same mobile ad will not work on all handsets. While text based ads are the dominant form of mobile advertising today, it is expected to be surpassed by video and display very soon.
Mobile advertising requires new ad units with innovative formats and interactivity options that can make optimal use of its capabilities. Both Apple iAd and Android Marketplace are encouraging fresh and original thinking in this area.
Subscriber preferences need to be managed. The beauty of the mobile medium is the ability of each individual subscriber to be served as per his needs and this starts with giving the customer a say in the proceedings. Operators and app stores need to provide subscribers ways to opt-in and also specify their offer, coupon or advertising preferences that can be leveraged for personalised ad delivery.
For instance, a subscriber on the market for HDTV must be able to define his need so that he is served HDTV ads and offers for that period of time. Subscribers must also be able to manage frequency of ad exposures and rate the ads they like.
Privacy Laws are Sacrosanct
The biggest customer concern in mobile advertising pertains to privacy. All participants in the advertising chain need to commit themselves to abiding the privacy laws of the state and help customers develop the comfort and confidence that their mobile data will not be abused.
Customers need a compelling reason. Advertising is a nuisance if not targeted and made relevant. It is also not a natural act for customers to opt-in and allow access to their data unless there are strong incentives in place. Operators, app developers and app store vendors need to put more thought into building an economic model that can provide sufficient incentive for opt-in to occur at scale and attain critical mass.
SMB and local is where the growth is. While large brands continue to experiment with mobile advertising, short term growth may be driven by small and medium businesses (SMB) who want to leverage location intelligence to drive consumers into their local stores and deliver targeted coupons. Local advertising lends itself to mobile incredibly well and merchants who jump on this bandwagon will have a definite competitive advantage.
Connectiva Systems is a revenue management software company whose solutions enable telecom, media and utility companies to reduce revenue leakage, minimise fraud, lower churn, improve operational effectiveness and increase overall profitability. http://www.connectivasystems.com/