By: Alan D. Mutter
Any day now, we will cross another technological tipping point, as the majority of digital advertising purchases moves to mobile devices from desktops and laptops.
The shift could happen before the end of this year or early in 2016, according to a variety of industry prognosticators. Either way, the move will be profound in the coming years, with eMarketer forecasting (tinyurl.com/oog3qqv) that mobile will account for 72 percent of the $93 billion expected to be spent on digital ads in 2019.
The reason is simple: Mobile is where the eyeballs are.
The Pew Research Center reported in a comprehensive study in April (tinyurl.com/n4rqkrn) that more than 90 percent of Americans owned some sort of mobile phone and that two-thirds of the devices were smart ones. Meanwhile, eMarketer.com reported (tinyurl.com/o6ghayg) that Americans were spending just short of three hours a day on their mobile devices, as compared with only 24 minutes a day in 2010.
With growing attention riveted on these pocket-sized media machines, it’s no surprise that ever more advertising dollars are shifting to mobile from the traditional print, broadcast and digital media. Mobile will capture nearly a quarter of the entire ad spend across all media in the United States in 2018 versus only 3 percent in 2012, according to eMarketer. Assuming the projection holds true, mobile ad spending could be second only to television within three years, which captured 39 percent of the ad dollars in 2012 but is projected to shrink to 36 percent in 2018.
Mobile’s momentum creates major opportunities and challenges for marketers and publishers, given the following superpowers:
It’s addictive. Because mobile phones are always there and always on, they represent the most intimate, immediate and individualized media experience ever created. In its April study, Pew found that 67 percent of smartphone owners frequently check their devices even when they don’t ring or vibrate; 44 percent said they slept next to their phones to avoid missing calls; and 29 percent said they “couldn’t live without” their ubiquitous electronic companions. The powerful attraction that mobile phones hold over their owners overcomes the single greatest challenge facing advertisers: capturing a customer’s attention.
It’s targetable. Because mobile phones have the capability of knowing who you are, where you are, where you are going, what you are reading and where you are shopping, they represent an unprecedented opportunity to send targeted offers to the right customer in the right place at the right time. The more consumers use their phones, the more data is potentially available to marketers to create compelling and customized offers. Magna Global, the international ad agency, predicts (tinyurl.com/mjfwdrm) that 82 percent of digital display ads will be bought and sold by computers, not Mad Men, by the end of 2018. That represents more than $25 billion in volume.
It’s social. Although smartphones are used to surf the Web, shop, play games, listen to music, capture images and sometimes even make telephone calls, the top activity among young consumers is interacting with their social networks. In its study earlier this year, Pew found that 91 percent of users between the ages of 18 to 29 used their smartphones to interact with their friends. If word-of-mouth is the Holy Grail of advertising, then it’s easy to see why marketers worship this platform.
It’s transactional. While your fingers may have done the walking in the olden days of the Yellow Pages, your thumb does the shopping today on a mobile device—pointing, clicking and buying in one, smooth motion. Global mCommerce sales are forecast (tinyurl.com/k6hs636 ) by Goldman Sachs to triple to $626 billion in 2018, a sum almost equal to all the stuff sold on all the world’s digital platforms in 2013. The convenience and customization of mobile shopping streamlines commerce like never before.
It’s measurable. The bundles of Big Data captured through mobile computing give marketers the ability to generate an unprecedented amount of actionable insights about consumers. As the art and science of targeting improve, marketers will further sharpen the pinpoint propositions they put to individual consumers. At the same time brands use data to boost the efficiency and efficacy of their advertising, they will tally click-through, sell-though and other metrics to continuously fine-tune their tactics.
It’s unavoidable. Because mobile advertising will force marketers to be accountable for the costs and results of their campaigns, advertisers are bound to hold publishers accountable for their performance, too.
As mobile becomes the primary platform for digital—if not all—publishing, it will demand ever greater sophistication from every publisher aiming to succeed in the interactive realm. Publishers will have to have the technology and the personnel necessary to capture data, categorize customers, target offers, analyze performance and dynamically tweak their content and advertising offerings to continuously improve performance.
In other words, legacy media companies hoping to succeed in mobile publishing can’t get away with simply selling buckets of miniaturized, run-of-site banners.
Alan D. Mutter is a former newspaper editor and Silicon Valley CEO who today consults with media companies on technology and technology companies on the media. He blogs at Reflections of Newsosaur (newsosaur.blogspot.com).