By IR Marketing on October 11, 2011
There are two consistent trends in mobile marketing. The first is that consumers are adopting mobile and tablets faster than marketers can adapt to. The second is that marketers announce every year that THIS is the year of mobile.
So why is all the buzz surrounding mobile based on projections rather than execution? Perhaps it boils down to the reality that this exciting and potentially profitable channel is filled with some pretty complex technical, strategic, and creative challenges.
Consider that in a recent study 75% of people would rather leave their wallet at home rather than be without their mobile phone. This is more than just a new channel. This is more than entertainment. This is a device, which according to Razorfish’s mobile division practice, will soon overtake TV in advertising spend, and which is clearly becoming the central access point into the minds and hearts of consumers.
Yet, in 2011, Jumptap revealed that less than 5% of most marketing budgets are dedicated to mobile. If mobile adoption is moving so fast, then why are marketers reacting so slow? Here at Impact Radius we’ve pooled our combined industry experience with direct feedback from clients to come up with the top challenges facing mobile advertisers in the digital marketing space.
Where to Put Your Budget?
The money is definitely coming. By the end of 2011, eMarketer predicts that mobile ad spending will reach about $1.23 billion. Impressive considering that marketers only spent $777 million on mobile in 2010. And beyond that? Break-neck adoption with revenues projected at about $24 billion by 2012.
But where to put budgets is a different story. Do you build a web app or a mobile optimized site? Should you build both? Should you invest in the mobile web and align your marketing with Google’s bet on the mobile web, or should you invest into Apple’s universe and focus your attention into mobile games and apps? Recent stats show Google ads to be more cost effective, but Apple ads tend to convert at a higher rate.
(Click here for full infographic from inneractive.)
Add to that the range of options available to mobile marketers, including SMS, search ads, rich media, location-based apps, WAP, mobile app display ads, video and push notifications, the options are as paralyzing as the lack of technical and creative expertise needed to execute these different tactics.
Mobile Analytics Just Aren’t There Yet
While mobile campaign budgets are ramping, the reality is that our ability to track mobile traffic is lagging behind the rapid adoption and use by our target customers. Unlike the web, analytic data on a mobile device has to be stored locally and reported whenever a network connection is available. Depending on how often the user engages with your application, this delay could be weeks after the actual application session. Tracking unique visitors is also a challenge when mobile users are bounced from network to network.
This means that while mobile ad spending will increase in 2012, our analytics into mobile consumer behavior and campaign metrics will still be comparably under served.
Mobile use is ubiquitous. But in terms of gathering data and distribution partners, a major challenge of the space is fragmentation. Mobile players include hardware manufacturers, OS providers, carriers, developers, publishers, ad networks, and app marketplaces. Apple and Google alone, both fit into three (+) of those ecosystem niches. And as incumbents continue to cross over into new offerings, they must recognize that each offering comes with its own set of metrics. Marketers are looking for consolidation tools to run platform agnostic mobile campaigns just as they do for search, email, affiliate and display.
Media planners also need to account for ad unit limitations and inherent technology and media-delivery limitations while wrestling with standards and protocols that vary wildly between mobile devices and operating systems. Needless to say the mobile planning process has become much more complex and arduous.
Creative and Technical Expertise Needed
According to Forrester’s 2011 Mobile Channel Strategy, 41% of those surveyed say they have below-average mobile expertise. It gets worse with the technical side of mobile. 53% cited major concerns around mobile technologies with 38% admitting they don’t have the right skills or expertise. Finally, another 29% admitted that they don’t know what to do internally and what to outsource.
Creatives also face mobile challenges. Until recently, the best creative minds created print ads and TV spots. But the challenge won’t be to find a way to adapt traditional creative or direct response advertising to a small mobile screen. It will be inventing a new, innovative advertising formula that fits the new context of marketing to people at a very personal and geographically relevant level.
With the growth of mobile video viewers in the U.S. projected to reach an estimated 66% of all mobile traffic by 2013, there is definitely a new space for creative advertising to flourish. But marketers will have to move beyond treating mobile as a tiny TV, tiny billboard, or tiny magazine. It’s a new world.
A recent study reveals that 46% of mobile users intend to make an eCommerce purchase via mobile device during the 2011 holiday shopping season. In 2015, world wide mobile eCommerce sales are predicted to reach $119 billion. But whether they actually make it through the mobile checkout process is a different story.
Slow and intermittent wireless connections, security fears, and clunky mobile data transfers can seriously damage your shopping cart conversion rates. In five years, mobile networks will be more reliable, devices faster and more capable. But in 2012, we will have to make due and be cognizant that customers are going to be frustrated with their mobile shopping experiences.
Where is Location-Based Marketing?
For all the buzz about location-based marketing, it might surprise you to know that only 4% of the adult Internet-using population has used any kind of location-based app or service, and a pitiful 1% of all adults regularly check-in to a location. (Read the study here).
At the same time, there is still potential location-based marketing. For example, GateGuru, a location-based iPhone app for airports, launched a campaign that resulted in about 15-20% conversion rate. If anything, some enticing concepts and apps that move beyond the novelty of ‘checking in’ is a creative challenge for marketers to explore in 2012.
Mobile Games—Not Just Another Banner Slot
According to a 2010 study done by Nielson, in-game advertising is to reach a $2 billion spend by 2012. Internet TV, in-game advertising, and other emergent channels are attracting big audiences and big business.
But these new social technologies require advertisers to adapt and evolve in these new media contexts, making sure their advertising strategies are relevant to the user. It’s more than just harvesting attention and big audiences, performance-based advertisers will need to understand the medium they are intruding and selling in. To capture attention, we will have to develop more relevant tactics.
Mobile Solutions Coming Soon
Those are the challenges we at Impact Radius are monitoring across the mobile space. Subscribe to our RSS feed and stay tuned for our solutions report designed to help you overcome mobile and other digital marketing challenges predicted for 2012.
In the meantime if you’d like to learn more about how Impact Radius can help you track and manage mobile campaigns, or if you just want some free advice, message us on Twitter or drop us a note at email@example.com.