Consumers now spend 20 per cent of their time on their mobile devices. The big question around this move to mobile is how to best commercialise it from an advertising perspective.
It’s a similar question to the one the internet on your desktop posed 15 years ago. A highly relevant, popular and engaging medium, but how do those content and utility providers get paid for providing all that interesting stuff to an increasing number of users? Are they providing advertising options quickly enough for brands wanting to get their message to this rapidly growing audience?
The desktop eventually spawned the money-making banner ads, search engine optimisation (SEO), and search engine marketing (SEM). As the desktop moved to the smaller screened laptop, website landing pages were reconfigured to allow more space for video and print style ads. Display advertising was born and MRECs (medium rectangle ad placements) and page takeovers became extra ways to commercialise websites.
Now with the move to tablets and mobile, the screen space has shrunk considerably more, and room for advertising space is limited. But consumers are flocking to mobile for on-demand news and content, and the opportunities for marketing personalisation are considerably higher with the data and geo-targeting available. And that’s the conundrum for marketers. They currently only spend 4 per cent of their marketing budgets on mobile. Yet a recent survey saw 35 per cent of marketers think that mobile would account for 50 per cent of their marketing budgets in five years. So what is the advertising model of the future for mobile?
Unsurprisingly, it’s the biggest players that are the first movers into providing options for advertisers wanting to make the most of consumers switching to smartphones and tablets. Facebook says if it was starting its business today, it would be as a mobile company. No wonder, given that one in every five minutes spent on a mobile device is on Facebook’s newsfeed. It has introduced video ads and print-style ads to its newsfeed in the last two years, and it now gleans 62 per cent of its ad revenues from mobile. And it is seeing the best results for brands from what it deems “great creative and great targeting”.
ESPN recently rebuilt its main Australian video content site for mobile devices first and desktop second. It has stuck to the basic, banner ad at the top of the site and small MRECs within, but the slick video streaming is primed for pre-roll video ads down the track; just as YouTube has delivered consistently for the past couple of years. Spotify announced last month that consumers opting to see a pre-roll video ad would get 30 minutes of ad-free music. McDonald’s, Ford, Coca-Cola, Target and Kraft were quick to jump on board. TV show and movie site, Hulu, is running with a similar advertising platform.
The mainstream Australian news services are also sticking to banner ads, pop up ads and MRECs for the text heavy sections of their mobile sites, while some have begun experimenting with full screen takeovers. Google announced in early October that it was also providing full screen takeover options for advertisers.
One business trying to outpoint the big guys in providing options to advertisers is South Korean start-up Latte Screen. It has developed an app that controls what appears on the screen after a mobile device is unlocked It can deliver a full screen ad, and if you view and engage with it you earn points which can be redeemed for dollars via Paypal. Advertisers can target consumers this way via age, gender and location.
Twitter has its promoted tweets to drive revenue throughout its feed, and has recently added a buy button option within them. Consumers can now click straight through to purchase that promoted brand’s offer with a minimum of fuss. In early September, Home Depot and Burberry became the first advertisers to take advantage of Twitter’s new buy button.
Apple’s recent launch of the iPhone 6 will only accelerate the consumer shift to mobile devices. And when you overlay the move of the majority of content providers and aggregators to redesign their mobile sites for a better consumer experience, it is inevitable that consumers will spend even more than the current 20 per cent of their time on these devices. Add to that the quantum leaps being made in real-time data analysis, the rapidly expanding mobile advertising options being provided for brands, and the ability for marketers to target consumers with personalised, timely and very relevant advertising is here and now.
Yet as marketers approach their 2015 budget cycles, they are only allocating 4 per cent of their budgets to this rapidly growing medium. Those that move swiftly to reallocate their budgets, while delivering engaging and relevant advertising, will have a distinct advantage.
Originally published in The Deal magazine in The Australian, 17 October 2014, http://www.theaustralian.com.au/business/the-deal-magazine/the-migration-of-consumers-from-desktops-to-mobile-gives-marketers-more-options/story-e6frgabx-1227091237343