To see the speed at which mobile use is growing, you only have to look at Facebook, half of whose traffic comes from phones and tablets. Revenues earned from mobile advertising are now finally growing too. In 2011, Facebook had no revenue from mobile advertising. Last year it took $500m from mobile ads, and this year that figure is expected to reach $1.7bn.
With 30 per cent of revenues now coming from mobile, according to Facebook’s most recent financial statement, it’s no wonder that founder Mark Zuckerberg declared last autumn: “We are a mobile company.”
Closer to home, £1 in every £10 spent on digital advertising in the UK in 2012 went on mobile. And that proportion is only going to increase as more marketers recognise that mobile devices are becoming the primary point of access to the internet for many consumers.
The Internet Advertising Bureau (IAB) recently released its digital ad spend figures for 2012, produced in association with PwC. Mobile advertising spend in the UK shot up by 148 per cent compared with 2011, rising to £526m. And according to Alex Kozloff, IAB head of mobile, that figure is predicted to grow to £854m for this year.
“We’re seeing very fast growth,” she says. “Mobile is becoming more mainstream and coming to the attention of more and more marketers. That will continue to happen as marketers move away from standard display advertising to rich media, for example.”
Craig Brown, UK product marketing manager for games company Capcom, believes the mobile boom is only just beginning. The last few years have been about trial and error in mobile but the opportunity is now too big to ignore, he says. “It sometimes seems like senior people in organisations think that digital is the PC, but that view is being turned on its head.”
GameHouse, which develops and hosts casual games such as Cut the Rope on websites and mobile platforms, has seen mobile as its biggest growth priority since last year. As Marketing Week reported in July 2012, GameHouse’s annual National Gamers Survey showed that spending on mobile games had risen by 30 per cent on the previous year, while the time users devoted playing them went up by 43 per cent.
But only now are advertisers starting to follow the users in the same direction. Rumbi Pfende, European head of advertising at GameHouse, compares the current state of mobile ad spending with the way online ad spending looked early in the last decade.
“There’s a big gap between mobile usage and mobile ad spend, just like there was between time spent online and online ad spend in the early 2000s. The difference between then and now is that mobile technology is moving much faster than online did.”
Further evidence of mobile’s increasing maturity comes from the way spend on the medium breaks down. The IAB/PwC figures for last year show search accounting for 69 per cent of mobile ad spend, with 29 per cent going on display and 1.7 per cent on classified ads, figures that have changed little from 2011. They also broadly match the overall split for digital spending overall, which last year stood at 58 per cent for search, 24 per cent for display and 16 per cent for classified.
“The fact that search makes up the largest part of the mobile market is down to marketers loving how search works and its ability to deliver immediate returns,” Kozloff says. “It’s also easier to do on mobile than other things are.”
Right now mobile search offers a significant opportunity to marketers, with a recent report from technology provider Marin Software showing higher click-through rates from paid search on smartphones and tablets compared with desktop (5.87 per cent and 3.93 per cent compared with 2.29 per cent).
The other big trend in mobile advertising is the rapid growth of video advertising, up from £0.8m in 2011 to £3m last year according to the IAB.
“Video has exploded on mobile,” says Pfende at GameHouse. “One of the things that has been holding mobile display advertising back is the screen size; everything is very fiddly. So there was demand for an engaging ad format and video fits the bill.”
Spend across different industry sectors is also starting to resemble overall online trends more closely. For years the biggest spender in mobile has been the entertainment and media sector, but that dominance is waning. In 2009 it accounted for two-thirds of mobile advertising spend, but by last year its share had fallen to 16 per cent. As Kozloff points out, that’s not because it’s spending less.
“Entertainment and media companies are spending more on mobile than ever,” she explains. “It’s just that other categories are increasing their spend faster. There’s always been a link between entertainment and mobile, so that sector has always been ahead, but now we’re starting to see a levelling out and a similar pattern emerging to the rest of digital. There are no longer any surprising laggards.”
Kozloff points to the travel and transport sector as evidence of this levelling. “Travel and transport was always in the top five sectors for advertising on desktop, but was much further down in mobile. Companies in the sector have really increased their spend on mobile in the past year and they’ve jumped from 4 per cent of the total spend in 2011 to 10 per cent last year. Companies are seeing the benefit of people looking for travel information on their mobiles, so they’ve built apps for that.”
Moving beyond the numbers, there are two significant aspects to the way advertisers are currently approaching mobile. The first is the need to get the basics right. Jonathan Fearn, marketing manager at alcoholic drinks company Bacardi Brown-Forman Brands, mentions search and the optimisation of mobile sites as being vital for him.
“A lot of what we do is content-based, people looking for cocktail recipes for example, so we need to optimise our content for mobile,” he explains.
Capcom is another company concentrating on building out its mobile infrastructure. “The key for me is providing the same experience in terms of content and functionality to customers on their mobiles as they get on their desktop at home,” says Capcom’s Brown. “We’re putting mobile-responsive sites in place so that the experience customers get is relevant to their device.”
And Brown argues that paying attention to the site experience is a key element in making mobile advertising work.
“We’re figuring out how ads work on mobile but where it all breaks down is where we send people to destinations built for a desktop experience. The magic is instantly broken. We did a mobile campaign in social media with [media agency] Mindshare and [mobile agency] Celtra, and the key was making sure all the landing pages were optimised for mobile. Even when we were sending people to retailers’ sites, they had to be optimised.”
The main lesson Bacardi’s Fearn has learned about mobile advertising concerns the nature of the ‘value exchange’ – in other words, what companies need to promise to a consumer to get them to do something. He gives the example of a mobile campaign that chased registrations for the brand’s partner entertainment service Late Night London.
“We saw lots of traffic but a big drop-off at the registration screen. We were offering a two-for-one voucher on mojitos, but the data capture element was quite long-winded. We tried again, capturing less data and adding a competition to win an iPad, and we got much better results.”
The second vital aspect of advertisers’ thinking about mobile is that it shouldn’t exist in isolation. “We don’t believe mobile is the answer, it’s just one element within a campaign,” says Fearn.
Tom Setter, mobile marketing manager at Trader Media Group, which owns Auto Trader, agrees. “Mobile shouldn’t be seen as a silo channel. We want to give users a quality experience across channels, whichever ones they choose to interact with us through.”
Auto Trader’s most recent advertising campaign, which launched on New Year’s Day, was carried out with media agency Carat. It not only used multiple mobile channels, but integrated mobile with TV advertising, online direct response, affiliates and search.
“We used mobile networks and portals for reach, push notification to drive calls and mobile [paid search ads] to catch people who were actively searching. It was certainly not a siloed approach – we made sure we were there wherever people looked on mobile.”
The importance of integrating mobile with other channels leads into an idea that seems likely to become much more important in the future – that of mobile as the hub of a connected media experience. “Integration across devices is going to become very important,” Setter says.
Alongside this, the next generation of mobile technologies will only bring more possibilities. Many of these technologies – 4G mobile internet chief among them – are being held up by the need for the supporting infrastructure, so brands must still play a waiting game. But as long as advertisers are confident in their preparation, there’s no reason why they shouldn’t take off and continue mobile’s upward trajectory.
Mobile is a key element of the marketing mix for bookmaker William Hill, according to head of mobile marketing Fiona Stevenson. The company uses paid search on mobile as well as display, push messages via SMS and in-app advertising. And it integrates all of this with its overall marketing strategy.
One of its most significant recent campaigns was around the Cheltenham Festival last month, a campaign that included TV, radio and outdoor as well as mobile. Activity focused on the company’s Sportsbook betting app. William Hill worked with mobile agency Fetch to get the highest possible positioning for its Sportsbook app in Apple’s App Store, encouraging existing customers to use the app, as well as both acquiring and activating new users of the app.
“We used the full marketing mix,” explains Stevenson. “Cheltenham is a massive festival and you need everything to work together to deliver a successful campaign.”
There were three strands to the mobile activity: pre-festival awareness using pre-roll video ads on iPhones, iPads and Android devices; an app booster campaign on the first day of the festival that pushed the Sportsbook up the App Store charts; and display ads on mobile sites including The Sun, The Daily Telegraph, the Daily Express and the Daily Star.
“We saw great results both in terms of acquisitions and of re-activating existing customers,” Stevenson says. “Over 1 million bets were placed on mobile during the four days of the festival.”
The next stage of mobile advertising for William Hill is targeting ads based on timing and location.
“We’re starting to do some tests where we’re targeting where people are watching a football match – at home, in the pub, at the ground,” Stevenson says. “It’s really important that our message is relevant, for example offering people the best odds at the right time, otherwise it’s annoying or irrelevant.”
Which of the following do you plan to use in 2013?
Mobile apps: 47% (2012: 57%)
Mobile search marketing: 29% (2012: 28%)
SMS: 32% (2012: 25%)
Mobile commerce: 24% (2012: 34%)
Mobile advertising: 34% (2012: 31%)
Source: Econsultancy UK Mobile Statistics
Available to download at Econsultancy.com
What can we learn from Amazon’s mobile strategy?
Amazon was one of the first brands to see the early potential of mobile commerce and is now leading the way in terms of innovation and mobile sales. Eight per cent of the retailer’s sales come via mobile, with estimates placing total sales somewhere between $3bn and $5bn per year. Here are some of the lessons that other brands can learn from this success story.
It covers all bases
Rather than debating the pros and cons of apps and mobile sites, Amazon has created apps for every platform, as well as a mobile-optimised website. This means customers can choose exactly how they want to shop with Amazon.
Easy repeat purchases
Amazon avoids the chore of the checkout by saving customers’ card and delivery details so they only have to enter a username and password. This is a must for retailers on mobile.
Amazon’s mobile platforms share a similar design so users will be comfortable using either.
A unified shopping basket
Amazon’s shopping basket synchronises across its desktop and mobile platforms. If you add a DVD to your shopping basket on the desktop site it adds it to the app as well.
Predictive search and spelling corrections reduce the amount of form filling and frustration at having to re-enter search terms.
Amazon’s mobile apps have a barcode scanner that allows users to find the product details and cost immediately.
The full product range
While some mobile sites or apps are slimmed down versions of the main site, research says that users want full functionality and product ranges, and this is what Amazon provides.
For more insight into what’s next in mobile, register for Econsultancy’s Future of Digital Marketing event on 6 June at Grange Tower Bridge Hotel, London. Find out more here.