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4 February 2014

Consumers have accepted advertising online, but targeted mobile ads? Not so much

Mobile advertising has up to now relied upon massive campaigns with poor results. There is a belief you cannot intelligently advertise on mobile, but now more than ever, this is simply untrue.

By Rupert Staines

Last month eMarketer revealed it is expecting the global smartphone audience to surpass 1.75 billion in 2014. It also stated that 4.55 billion people are predicted to use a mobile phone in 2014, thanks to increased availability in the developing regions of Asia-Pacific, the Middle East and Africa.

Tell these stats to an advertiser responsible for mobile advertising and watch their faces light up. A platform is now available that brings a potential audience of billions of users – more than Facebook and Twitter combined – and it’s growing. The opportunity to reach such massive audiences is gold dust to the advertising industry.

They are looking to take advantage too. Gartner revealed that global mobile ad spending is forecast to reach $18.0 billion in 2014, up from the estimated $13.1 billion in 2013. It also expects the market to grow to $41.9 billion by 2017.

It is undoubtedly a booming market. Yet there is a real problem.

In the past five years, online advertising has become incredibly intelligent. We are now at the stage where ads can be served based on what consumers are sharing and talking about. Sharing has become something of a phenomenon and can come in all forms, whether it be a tweet, a shortened URL, even an email telling someone to look at a link. Advertisers are increasingly able to build profiles of people, based on their interests and what they are sharing across the Open Web, and serving relevant ads accordingly at to scale. Consumers have reacted well. They understand that they are going to be served ads online these days – it’s what makes the internet tick – so they may as well be useful.

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However, the same can’t be said for mobile devices. There is a distinct lack of “intelligent advertising” on this platform, and when you consider Gartner’s figures and projections, it is a costly miss. Without doubt, an archaic approach to advertising still exists. By that, I mean that advertisers have reverted to the “clusterbomb” approach of advertising – no analysis or resesarch of whether the user is interested in your brand and may be likely to click through, research and even invest, but rather putting out as many ads as possible in the hope that some people will bite. It’s an incredibly expensive way of getting your message out there. And if anything, it can be detrimental – consumers, who expect relevant marketing messages, are likely to be irritated by intrusive, non-relevant ads, especially as they are increasingly seeing marketing messages tailored to their interests. It reeks of the early days of online advertising, where you received ads for something you had no interest in whatsoever.

Let me give you an example. Last year, I got pretty hooked on an app called Stick Tennis. A very simple game, but highly addictive. In between each set, I would be served an ad. On numerous occasions, I was served an ad for Wonga. I wouldn’t dream of using a service like Wonga. Not in a million years. Frustration aside, it did make me realise two things. Firstly, brands are frittering away significant and precious budgets on advertising that is going to provide a minimal return. Put bluntly, it’s a complete waste. Secondly, there seems to be a level of thought that you can’t replicate the level of targeting on mobile that you can on desktop. But that is simply not true.

There are so many opportunities for advertisers and agencies alike to reach the huge number of mobile users, especially through apps. This is another economy which is continuing to grow and grow. Last year, APPNATION forecasted that revenue from apps is to continue to expand over the next four years and that, by 2017, the market will be worth over $150 billion – more than twice what it was worth in 2012. This naturally implies more apps being created and crucially, more consumer use.

Apps can be a hugely powerful communications tool and can help marketers get to know their potential audiences even better. This then brings considerably more opportunity to serve them more targeted messages, which results in more click-throughs and, ultimately, more sales. For example, use of a football app may drop off between seasons – leading to missed advertising and marketing opportunities within the app.

However, we are at the stage where brands can implement appropriate in-app tracking. This enables them to understand how users behave and therefore intelligently segment an audience, identify supported teams and so on. Relevant and bespoke news alerts and messages can then be driven through push notifications to engaged users. This, in turn, exposes them to mobile advertising while simultaneously providing a better user experience and hence more opportunities to up-sell. And, as consumers’ behaviour and reactions to mobile advertising can be tracked, it brings the opportunity to set up personalised ads in the future in order to re-engage them further down the line, thus keeping the cycle turning.

This methodology can naturally be applied across every sector, not just football. The opportunity for advertisers to take advantage of mobile is therefore enormous, as the technology now exists to serve relevant ads at the right time and at scale, making the process of just blasting out ads and hoping for the best a thing of the past. Those that add this layer of intelligence to their mobile strategies now are going to be the ones that stop the slew of wastage and truly reap the benefits.

Rupert Staines is European MD of RadiumOne

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