Couple of good quotes in red
This May Be the Year Mobile Eclipses Desktop Spend, but Should Marketers Go All In?
It's not exactly clear when the Year of Mobile began for marketing. But after a half decade or more of mobile-boosters declaring it so -- and well after consumers made the switch -- it's here.
EMarketer predicts that 2016 will be the year that mobile ad spending eclipses desktop ad spending, and account for nearly a quarter of total media spending to boot. By 2019, the researcher predicts that mobile ad spending will rise to $65.49 billion, or nearly 70% of total digital ad spending and close to 29% of total media spending.
Now "The Year of Mobile" has given way to another rallying cry: "mobile-first." But not only is it easier said than done, it's not always advisable. Putting mobile at the forefront of your strategy bears careful consideration over whether it is actually right for your brand. Here are just some of the things to keep in mind when going mobile-first: The screens are limiting and small; your marketing must be less interruptive and get consumers to opt in; if you're going with apps, they need to have utility; mobile must be regarded as part of a larger marketing whole; and most of all, your brand must be suited to a mobile-first approach.
What's a marketer to do?
Working with the giants
Many are handing the keys to their mobile efforts to the biggest social platforms that have either adapted successfully to mobile or were born there.
Marketers are funneling billions into Facebook, Twitter and, increasingly, Instagram and Snapchat -- platforms that are becoming more sophisticated and data-rich with video and useful attribution models. Facebook (which also owns Instagram) commands almost 20% of the $42 billion in U.S. mobile ad revenue, according to eMarketer; Twitter's share is another 4%.
Facebook alone boasts more than 1 billion daily active users. Twitter, for all its Wall Street
and user-growth pressures, still boasts 320 million monthly active users. Instagram says it has 400 million monthly active users. Bourgeoning Snapchat counts more than 100 million daily active users and claims that more than 60% of 13-to-34-year-olds in the U.S. are Snapchatters.
and user-growth pressures, still boasts 320 million monthly active users. Instagram says it has 400 million monthly active users. Bourgeoning Snapchat counts more than 100 million daily active users and claims that more than 60% of 13-to-34-year-olds in the U.S. are Snapchatters.
U.S. MOBILE AD SPENDING, BY INDUSTRY, 2015
In billions and percentage of total
| Retail | $6.65 (23.2%) |
| Financial services | $3.49 (12.1%) |
| Automotive | $3.43 (12.0%) |
| Telecom | $3.27 (11.4%) |
| Travel | $2.38 (8.3%) |
| CPG and consumer products | $2.33 (8.1%) |
| Computing products and consumer electronics | $2.09 (7.3%) |
| Media | $1.73 (6.0%) |
| Entertainment | $1.5 (5.2%) |
| Healthcare and pharma | $0.66 (2.3%) |
| Other | $1.20 (4.2%) |
Note: total mobile ad spending equals $28.72 billion; includes classified, display (banners and other, rich media and video), email, lead generation, messaging-based and search advertising; ad spending on tablets is included; numbers may not add up to total due to rounding.
Source: eMarketer, May 2015
Source: eMarketer, May 2015
These platforms are obviously prioritizing mobile in their ad products. According to Twitter's most recent earnings, mobile accounted for 86% of its $641 million in ad revenue. Facebook's most recent earnings results showed 80% of its $5.6 billion in ad revenue came from mobile. Most of the executives interviewed for this story said that Facebook's video ads, rolled out widely in 2014, have given them an opportunity for more branding-style campaigns as opposed to direct-response-style ads that mobile is known for.
But is going all-in on Facebook enough? "There's a lot of room for mobile strategy, but when all you're doing is saying, 'Hey, Facebook, we'd like to buy some ads,' and they allocate the inventory for you, is that really a mobile strategy?" said Brian Wieser, senior analyst at Pivotal Research Group. "I think that's how most marketers have allocated most of their mobile spend. At minimum, it solves the check-the-box problem of saying you're doing mobile. It technically solves the problem, but it's not really a mobile strategy. It's certainly an entry point for a marketer to learn, but there's so much more to mobile strategy."
It gets even stickier when you consider messenger apps with massive audiences and strong potential. WhatsApp, WeChat, Facebook Messenger, Kik and Viber, just to name a few, have been growing at a furious clip, but not all have developed ad formats yet (though they surely will). What about the platforms that we haven't even heard of yet?
The fact is, "we're in the early innings of mobile," said Harry Kargman, founder-CEO at Kargo, an ad tech company that develops various ad formats. "Facebook is a phenomenon in terms of the amount of users it has, but there are other platforms that will drive huge amounts of usage in the future, and so we're at the very beginning of a tectonic shift in terms of where consumers find and absorb content, use social and how they are advertised to."
To app or not to app
Because the mobile screen is smaller, fewer ads can be served than what's possible on a computer. "On desktop, the thinking was, 'How many ads can be crammed on the screen?' But that same idea can't be applied to mobile," said Ian Schafer, founder-chairman at Deep Focus. "Mobile is a smaller screen and there's much more emphasis put on user experience. That just limits the number of ads we see."
Limiting ads isn't necessarily a bad thing. Crowding desktop screen space with banners has likely done more harm than good. Limited space may actually prompt agencies and marketers to be smarter about the kinds of ads they serve. "Mobile has created new pressures for brands that are actually really healthy pressures," said Chet Gulland, head of strategy at Droga5. "When we're talking about branding, because mobile is more on consumers' terms, it makes us ask, 'Is this a piece of content people will actually like? And is it useful?' Those two questions have become so much more important."
Agencies, marketers and planners would do well to think about those questions (even outside of mobile) because if people are using an app full of banners or browsing a mobile site inundated with clunky, annoying ads that slow the site down, that brings them one step closer to downloading an ad blocker. (Another draw for Facebook, Twitter and Instagram: They're generally safe from ad blockers, and they've refined their ad products to make them seem more native.)
Viewability and fraud are also among the big concerns, and organizations like the Media Rating Council are working to develop mobile viewability guidance and measurements. Even there, a series of issues needs to be resolved before the MRC can issue such guidelines.
With consumers spending 88% of their time on smartphones in mobile apps, according to ComScore, an app might seem attractive.
Mr. Wieser said that for some marketers, apps offer utility that makes people's lives easier. "Banks have figured out what mobile strategy could be: It's customer service in a handset," he said, referring to bank apps that let people cash checks and transfer money, among other things. "That's a really good use of taking advantage of mobile for what it is."
Customer service in a handset is great for banks and airlines, but that leaves a lot of other players out of the picture.
"Unless your brand is involved in a category like tech or one that relies on customer service, people won't really interact with a branded app, so most marketers have moved away from an app strategy," said Leo Burnett Chief Innovation Officer Mark Renshaw. That, he said, often leaves marketers focusing on the big platforms, especially now that the measurement and data offerings are much more sophisticated than they were two years ago, and Facebook has put such an emphasis on video. "But to be successful on those platforms, you have to understand context."
Finding context
Clorox does its fair share of Facebook advertising, but has found that context for its brands often leads elsewhere. "A lot of our brands are very functional," said Ellen Liu, Clorox senior director-media. "So we've leaned into how-to and need- based approaches, like when I have a stain, when my kid is sick, when it's 4 o'clock and you're looking for a recipe for dinner." That inevitably leads to search advertising, which Clorox buys "agnostically" regarding platform, she said, but which tends to play out through mobile.
Mr. Krishnan said Pepsi has moved away from having its own apps, and instead focuses on working with other retail apps and catching customers when they might be looking to purchase. The company often shies away from banner ads in apps and ad units like interstitials, trying to figure out first if such ads are adding value or causing clutter. "We want to answer that before we invest in that," he said."Brands have to think about their role when they appear on the mobile screen, because mobile is the most personalized screen," said Ram Krishnan, senior VP-chief marketing officer at PepsiCo. "People are often engaging with friends and family, and brands have to have a clear plan when they interrupt that conversation."
Mobile is an "opt-in" screen to Mr. Krishnan, who sees location targeting continuing to grow—a method that could be valuable for companies as they look to grab consumers when they're shopping. PepsiCo has been experimenting with location-targeted ads on apps like Waze, a Google navigation app. "Our brands are highly impulsive brands, so you need to make sure they're top of mind for consumers to remind them to make the purchase," Mr. Krishnan said, adding that "the interesting thing about our category is mobile is the only touchpoint we have with consumers in the stores, and that's hugely valuable."
NET U.S. MOBILE AD REVENUE SHARE, BY COMPANY, 2014-2017
| 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|
| 36.9% | 32.9% | 31.7% | 31.7% | |
| 18.5% | 19.4% | 19.2% | 20.3% | |
| 3.6% | 3.8% | 4.0% | 4.4% | |
| Yahoo | 3.3% | 2.9% | 2.5% | 2.4% |
| Apple (iAd) | 2.5% | 2.6% | 2.8% | 2.9% |
| Pandora | 2.9% | 2.4% | 2.2% | 2.2% |
| YP | 2.7% | 2.1% | 1.8% | 1.8% |
| 0.3% | 0.5% | 0.5% | 0.5% | |
| Amazon | 0.4% | 0.4% | 0.4% | 0.5% |
| Millenial Media | 0.5% | 0.3% | 0.3% | 0.2% |
| Other | 27.7% | 32.0% | 33.9% | 32.5% |
| Total (billions) | $19.15 | $30.45 | $42.01 | $50.84 |
Note: net ad revenue after companies pay traffic acquisition costs (TAC) to partner sites; includes display (banners and other, rich media and video), search and messaging-based advertising; ad spending on tablets is included; numbers may not add up to 100% due to rounding.
Source: company reports; eMarketer, September 2015
Charts by Chen Wu
Source: company reports; eMarketer, September 2015
Charts by Chen Wu
Does it fit the bigger picture?
People aren't spending all of their time in apps. There's an entire world on the mobile web. And that isn't just a claim made by the thousands of publishers out there trying to make a buck without the help of Facebook.
Google, it should be noted, has a larger share of mobile ad revenue than Facebook. According to eMarketer, the search giant commands 33% of the market. For Google -- and many publishers, for that matter -- the mobile web is key for ad revenue.
But it's also where consumers are most likely to start launching ad blockers if the experience becomes bloated with ads or slowed by data tracking. That's one reason why one of Google's biggest moves in its mobile evolution is Google AMP(see p. 16). The search giant has also invested heavily in mobile search to serve people relevant ads as services like mobile commerce grow.
But the game for Google and its advertisers is ultimately to find consumers across devices.
And that's a key point for marketers and their agencies to remember. While a Facebook or a Google or even a consumer can be mobile-first, it might not make much sense for a marketer to be -- or about as much sense as starting every marketing initiative from a TV-first approach or a print-only approach.
It's a confining strategy that primarily benefits the media owners in question.
Clorox spent four years trying to pin down a mobile strategy and ended up going in a different direction. "What we've evolved to today is where mobile is integrated into our marketing, communication and media strategies, not completely as an independent entity," said Ms. Liu.
