Primary Impact

The following is an excerpt from The State of Mobile Marketing:

Mobile Marketing Comes into Its Own

Smartphones, the rise of 3G connections and unlimited data plans are the tipping points for both marketers and consumers in terms of mobile as a medium.  With consumer penetration now higher than that of the Internet and a diverse advertiser base, mobile marketing has become mainstream rather than experimental.

Mobile marketing excels at reaching consumer groups tough to reach through other media:  teens, moms, affluents and urban audiences. Due to its personal nature, mobile can be a highly engaging medium for marketers looking to reach consumers in a focused mindset.

In an era of economic instability, the mobile device has become the one must-have product. Marketers must now work to connect with consumers through a device that offers not only communication but always-with-them entertainment and information.

Smartphones – especially iPhones – are not the whole picture:  Smartphones accounted for 13% of the mobile device market in the US in July ’09 according to comScore. Of that number, 21% are iPhones – a market share matched by Microsoft and dwarfed by the RIM BlackBerry (41%).  For marketers, permission-based SMS (the mobile equivalent of email marketing) can be a more efficient way to reach a broad spectrum of the mobile population.

Mobile advertiser mix has become more like that of any other media:  Advertising on mobile phones is being embraced by traditional brand marketers – not just marketers of cell phone applications like ringtones and games.  Broadcast & Cable is currently the top category in mobile advertising according to comScore.  Among the top 20 advertisers in June ’09 as captured by Nielsen, half are Fortune 500 companies.  The mobile ad market is extremely dynamic, with 30% of comScore’s top advertiser list in June ‘09 not appearing on the list during the same period in ’08.

Mobile is being used for both awareness and direct response:  Advertisers are using the medium not only for direct response, but especially in the case of entertainment, personal care, technology-related products and health, as an awareness driver and a way to appeal to elusive audiences.

Mobile has high performance rates relative to other interactive media:  At this stage in the evolution of mobile marketing, its relative lack of clutter and low cost makes it greatly appealing for marketers troubled by the increasing  CPCs of search and the jumble of ads on web pages. Click-through rates vary by category and by creative type and intent, but are typically at least four times that of online display.  Branding studies from both Dynamic Logic and InsightExpress show that mobile ads achieve higher aided and unaided awareness, brand favorability and purchase intent than online display – even as compared to early online display or video norms.

Devices impact consumer behavior – and advertiser response:  Device functionality – especially the interface and the web browsing experience – changes the way consumers use and interact with marketing on their phones. The iPhone, and its companion non-phone wireless device the iTouch, generate the highest number of ad impressions – which equates to media consumption – even though the iPhone is NOT the top-selling phone in the US.  Apple devices also generate the highest direct response rates (a 35 point lift over average click rates), according to Quattro Wireless.

At this stage in the evolution of mobile marketing, marketers should pay close attention to the demographics of various handsets.  Device  targeting is an efficient way to reach specific audiences: Sidekicks are popular with teens, the BlackBerry Curve is the hot device among women 35 – 44, while the iPhone rules with men 25-34.

Ad types also impact response – but should be measured appropriately: According to Quattro Wireless Q2 ’09 impression data, animated ads (sequential GIFs) offer on average a 61 point click-through rate lift over static banners.  Expanding ads, which are designed to engage the consumer within the unit, have less than average click rates (index of 98) and should be measured by time spent and number of pageviews consumed.

Mobile Apps are hot – but increasingly complex for marketers:  Now that Apple has competition in the app market – and the Apple app store is overwhelmed with titles, a branded app strategy can be a costly and complex process. Apps now have to be developed separately for Apple, RIM, Android and Palm platforms. There are also so many apps that if a marketer chooses to develop their own, they need to market that app to ensure usage. A simpler app strategy can be to advertise within or sponsor existing ad-supported apps based on audience and content synergy to the brand.

“Mobility” offers greatest marketing potential:  Mobile, the only medium where the advertising travels and typically stays with the consumer, offers unique opportunities for geo-targeted and point-of-sale promotions and marketing. Accordingly, some of the most innovative approaches to mobile are coming from packaged goods marketers who are transitioning couponing business to mobile from print and are experimenting with apps (and their geo-location abilities) as a way of increasing consumer engagement.

Who knew that “old” media models would get so hot again. Instigated by a recent eMarketer paper (http://www.emarketer.com/brandmeasurement/) and supported by a cogent argument of Young Bean Song at Atlas/Microsoft (http://community.microsoftadvertising.com/blogs/analytics/archive/2009/07/06/getting-back-to-basics-why-web-advertising-needs-traditional-media-metrics.aspx), we are back to talking about GRPs and Reach & Frequency as the new metrics savior of online display.  While I agree that online is becoming a reach medium, it still does not have 100% penetration of the US population and it will not solve the revenue generation problems of online content.

As someone who has worked in both TV and online, while I agree that reach & frequency and GRPs are a useful bridge to “traditional planning” some of their strongest proponents for using them online believe that they are some sort of magic fix for the revenue challenges of content sites. If we were to implement a GRP buy system for all of online, content sites would lose out due to their ability to only add incremental reach to a multi-platform buy. Online ad networks and exchanges that aggregate mass inventory — context be damned — are the ones who would win in this equation. Online content sites are most equated to how print is bought: on audience composition and context more so than reach at cheap CPMs. Yes, online is becoming a reach medium due to the vast amount of usage, but to harnass that reach, you need audience aggregators (for both video content and static types of content). As we have seen, ad networks tend to commoditize inventory and reduce CPMs. It should also be noted that low consideration product categories are notorious at pushing for the lowest possible TV CPMs primarily because they don’t really need context and they buy in such mass. One of the things that I think is really interesting is that packaged goods companies like P & G and SC Johnson have begun to buy cable on a DR basis and use very specific TRPs as the proof point. In a scenario with dare I say it too many media options, more advertisers online and off will be pushing for DR — yes, it will hasten the death of a lot of media or at least move to more of a paid content model.

The session was lively with Jon Gibs throwing out the bomb that online display is broken. While we disagree on that point, think we ultimately come to the same conclusions. Yes, a model based on impressions that rewards the publisher for as many ads per page is just bad and does nothing to improve ad performance. Time exposure metrics are a great idea, but only for some types of ads: those designed to NOT drive some kind of action but to engage the user on the page. The reality is, that because online, unlike other media, can lead to so many other destinations, most advertisers using it will have some kind of end goal, even if that goal is not an immediate click. I’d like to see the industry — especially publishers — finally embrace view through (made widely available through comScore), and set the windows appropriately. Time exposure metrics are great, as are interaction metrics that Google discussed — but for certain types of creatives. Kyle Johnson of Compete illustrated this well with two Toyota Venza creatives: one that performed best in terms of delivering consumers through to site, the other that worked better on page. Both had different ROI but showed that as he said, you have to look at more than one measure of success.

The great thing is that we gave attendees some solid examples of how they should increase the sophistication of their analysis.
read the whitepaper at:
www.primaryimpact.com/stateofdisplay.html