In spite of all the noise from Apple about iAd changing mobile advertising, six months down the line, it still doesn’t look like ad agencies are convinced. At a panel conference in New York, execs from ad agency Publicis claimed that iAd couldn’t deliver the numbers that brands were looking for. Jami Lawrence, associate director of mobile marketing at Publicis Modem said ‘it’s a really small audience—from a scale perspective not really there’. Whilst the iphone is popular it only represents a few percent of handsets at best. What’s more, for many brands those users are not their target audience. Look at retail, and the supermarkets in particular. For most of them their customers are mainly women, and for some, mainly older women. Yes, men shop in supermarkets these days, but typcially the main buying decisions are made by women.
Lack of reach is one problem for brands, but the other is the $1 million entry fee limits the network to major brands. And major brands who are willing to risk that amount in the mobile space. Publicis pointed out that typical spend on mobile campaigns is $20-$50k, which is consistent with the UK experience.
There is also a barrier to developers including iAd in their apps: the 60% payout rate from Apple may not be enough of an incentive. Added to that are the limited metrics provided by Apple. Click through rates are not enough of a measurement for today’s digital advertisers, they want to see a full run down of customer behaivour. Something that iAd cannot give. I previously blogged about Apple ditching Quattro Wireless and putting all of their eggs into the iAd basket.
Whilst iAd offers a great, interactive experience (that doesn’t take the user away from the app), that simply isn’t enough for brands. Apple have pitched their network at too high a level to make it a success. In all likelyhood Apple will make money from iAd, but it will remain a niche product. Unlike the claims from Steve Jobs, it will not do for mobile advertising, what the app store did for the iphone.
Taking a small leaf out of Apple’s iad book, Google have announced a new mobile advertising format that allows brands to include an expandable map. Rather than Apples $1 million entry, Google have announced a low start up cost. The ads can be found in mobile sites, and within apps both on Android and the iphone (not sure how that will work).
If there is one company out there that understand digital advertising then it’s Google. I’ve not been convinced of iAd, and looking at the Google offering my (much smaller sum) of money is on the latter.
More info here: http://moconews.net/article/419-google-expandable-mobile-ads-come-with-maps-too/
Following on from O2 More, a direct marketing channel, Orange have launched their own call Orange Shots. The idea is pretty simple – they take opt-in subscribers and send them up to three messages a week on sectors that they are specifically interested. The idea of targetted mobile advertising is not new, and Orange, having acquired Blyk, have adpoted their approach in the new channel.
However, I see two major problems with this:
Firstly, the consumer. Orange are offering free premium content to those who sign up for the program. But how much will mobile users value this in return for marketing messages. Blyk reported that their users found the marketing messages generally useful. However, the offer and relationship at Blyk was somewhat different to Orange. The former company focussed on an under 26 demographic. And for that they offered free calls, SMS and even data. That is a much more compelling offering than free premium content when you’re already paying a network subscription.
The second problem are the operators themselves. Of course each operator can only access their customers. If the T-Mobile deal gets through Europe then they will have the largest customer base of any network. But it will still not be a majority of UK mobile customers. Of those, only a small portion will sign up. More significantly is the perception of mobile operators as advertising providers both from the point of view of the consumer and that of the brands wanting to sell their wares. In short, most people see mobile operators as delivering phone calls, SMS and some data. The example of the operator mobile web portals shows this. As soon as users have a chance to avoid the portal (for example through the iphone), they will go elsewhere. From a brand’s perspective, who would you go to for marketing? Your an existing online provider (Google), your ad agency or a mobile operator? With Google’s acquisition of AdMob, the search provider looks to be a good option for brands. Google have experience in delivering results in this kind of area. Agencies understand the whole brand and marketing mix. I suspect that operators are way down the list of choices.
The mobile operators need to find new sources of revenues. Phone ownership is at saturation point and most people have the subscripition or tariff they are happy with. So, there are no new customers and no one is likely to spend any more on their phone calls etc. It means that the operators are stuck if they want to increase revenues. That is why they are looking at direct marketing and platforms such as Orange Shots.
It’s true that Orange have done a good job of the offering. They are encouraging brands to create a dialogue with their customers and feeding back good, solid reponse data. Ultimately though, how much direct advertising are mobile users prepared to accept? I suspect it won’t be that much.
In spite of the fact that the iphone/ipod touch has a high internet browsing rate, it would seem that it is the Symbian mobiles which include many Nokias, that get the highest click-thru rate on adverts. Mobile ad optimiser, Smaato looked at the average click thru rate of over 3 billion served ads. Using that as an index of 100, they found that Symbian handset users rate was an impressive 169 points. iphone was the next best at 119. Blackberry, in particular, showed a low index score.
More information on Smaato’s site here.
… that’s according to an article at emarketer.com.
A senior research analyst has predicted the market for the next five years as growing at the following rate:
2009 : $416 million
2010 : $593 million
2011 : $830 million
2012 : $1140 million
2013 : $1560 million
That’s great new from the industry, and who am I to question a senior analyst in a reputable online research company?
However, I would always recommend taking these kinds of figures with a pinch of salt. I can see that there are grounds for this prediction: Google’s acquisition of Admob for $750 is a good argument in favour of mobile advertising’s rise. However, is $1.5 billion by 2013 actually a realistic figure? Who knows? What I do know is that predictions like this get bandied around the industry and quickly become irrefutable facts that are often quoted. Yes, mobile advertising will grow, but I would suggest taking this kind of analysis with a pinch of salt.
The announcement that Google is to acquire Admob for $750 is significant news for the mobile advertising sector.
Admob has had good success in the mobile pay per clicks market and benefited from the growth in smartphones such as the iphone and Blackberry, along with increased flat rate data plans. Google has made a substantial investment in the mobile sector, particularly with their mobile OS, Android. However, it hasn’t made any significant advances in the mobile PPC market. Similar to it’s policy with YouTube, Flickr, Blogspot etc, Google has acquired a leading player in the market through Admob.
A statement issued by Google said that: “While this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,”
The feeling amongst industry experts is that it is good news all round. It demonstrates Google’s committment to mobile and Admob’s success in the market.
Coca-Cola have announced that they are to give away phone credits through their latest promotion on Dr Pepper and Sprite.
This is an interesting move, as it is the first time that a promotion has given away phone credit. Previously it has been difficult with the operators, as there has been no mechnaism in the UK to give credit to a third party. However, Coca-Cola have been able to make arrangements with the mobile operators to do this. It also makes it possible for other brands to follow. The offer for free phone credit may prove to be very attractive to consumers. It’s the next best thing to ‘free money’.
On the downside, the offer can only be redemed through traditional media, such as post or through outlets. Perhaps if Coca-Cola had used SMS as a method of redeming the credit (for example, by texting a voucher code to a shortcode number), they could have created one of the most successful campaigns of the summer. Maybe they should take a leaf out of Walker’s Crisps marketing books, who ran one of the most successful UK mobile marketing campaigns earlier this year.