Opinions

The very real state of mobile

Posted by Adam Kleinberg on October 22nd, 2012 at 12:57 pm

I just got back from the iMedia Breakthrough Summit in Austin. The event was almost completely focused on mobile.

Someone cracked a joke within the first 10 minutes of the conference that "once again, this is the year of mobile!"

Clearly, there are a zillion stats I could post (I won't bother) showing we are all using smartphones to access the internet these days. But what does that mean for advertisers? It's a complicated question. I think it boils down to five contributing factors:

  • Using big data to reach people
  • The reality of the mobile canvas
  • Tablets are not mobile devices
  • Other ways to find our customers
  • The real mobile opportunity

Using big data to reach people

If one thing is certain, there is no shortage of data that will help marketers find customers on their mobile devices. Media geeks will salivate at the big data being collected to help them target customers. It is impressive. It is terrifying.

One company called 4info showed us how they have collected latitudinal and longitudinal data on 330 million devices across 97 million households so they can target you on your phone.

How? First they look at where you are at night during the sleeping hours to classify you, your spouse and your teenage daughter as a household (and maybe everyone in your apartment building if you live in a city, but "you'd be surprised how similar people are who live in the same building?" Really? Would I?).

Once they've got you as a household, they start layering in data to your profile based on where you go. Stop by Chucky Cheese, you're likelihood of having kids in your household goes up. Stop by Nordstrom's, your income level goes up. Visit the batting cages, you're more likely to be male.

Others are using the "where you go = who you must be" approach as well:

  • JiWire is tagging you when you walk into a geo-fence and then following you around wherever you go afterward—visit a college campus, you must be a student.
  • PayPal now owns a mobile media network and they own RedLaser, so if your customer is at a competitors store and they scan a UPC code for a competitive product, you can immediately serve them an ad on their phones.

The efficacy of all this data is inferential at best—in other words, it's educated guesswork. But computers are good at educated guesses, so there is a strong ability to find people who will click on stuff.

The reality of the mobile canvas

Of course, the question remains: what do you do once you target people?

If you believed vendor presentations, you would think it was awesome. They'll show you all these sexy screens with HTML5 whiz-bang and Spiderman video trailers and other digital awesomeness.

But there's a little white lie of omission here: The gateway to all of these experiences is a 50x18 pixel banner ad that is trying to shove its way between you and a game of Paper Toss.

What does that mean for the creative opportunity you have available to you? Not much. In truth, it sucks.

I believe Bill Bernbach said, "It's not the number of ads you buy, it's the impression you make." Today the word "impression" has a very different meaning in advertising. You can buy a whole bunch of impressions in mobile, but the opportunity to actually make an impression?

Not so much.

The vendors of course will show you data to sell their data. One vendor at iMedia showed a CPG brand achieving 3X higher click-thru-rate for mobile than they got on display. Even if you're not asking "how many of those clicks are because of fat thumbs?" ask yourself, honestly, "is that really a win?"

Is it meaningful at all?

Tablets are not mobile devices

Mobile makes marketers drool for two reasons. One is the sheer amount of time people spend with their phones. The other is the ability to catch people at a contextually relevant moment in their lives and assault them with advertising -- it's 8am and you're walking past Starbucks.... come in for a cup of Joe.

Tablets are not phones, however. They are incredibly popular—especially by mobile ad vendors who get to claim that the mobile ad market is exploding because of them—but the market share they are grabbing is from laptops, not smartphones.

The way people use them is more like laptops than smartphones. They provide a big opportunity—but that opportunity is not a particularly mobile one.

Other ways to find our customers

What is "the mobile opportunity," however, is not limited to interruptions delivered through and ad server.

One of the smartest mobile strategies I saw at iMedia was from Coors Light. Brian Lipman from MillerCoors digital media told the crowd he reminds his team, "We're in the beer selling business, not the app selling business." Instead of buying mobile micro-banners or wasting energy trying to get people to download an app, they inked a deal to sponsor content in ESPN's app.

Sexy? No. Smart? Yes.

Another partnership that has been very successful in mobile is Walgreens and Foursquare. Walgreens invested in a modern POS system that can scan mobile coupons—so when people explore or check in on Foursquare, they get served up a coupon they can use at the register. Of course, Foursquare is nowhere near as big as Facebook or Twitter, but it's a mobile program that is driving positive ROI for Walgreens.

The real mobile opportunity

It is very easy for marketers to chase direct response. To use cell phones instead of newspaper circulars as a coupon delivery mechanism. That's whats easy to measure. That's what will fit neatly into their ROI spreadsheet.

But that's not what's going to make meaningful impact. That's not going to create new revenue streams or increase market share or raise the share price for stockholders.

The real mobile opportunity for brands is to fundamentally enhance the value of their product, differentiate themselves and deepen their relationship with consumers.

How? Sometimes it's obvious. Examples are abundant.

  • Starwood showed a beautiful app that let you manage your rewards program and book activities during your stay. Obvious? Perhaps. Fantastic value for Starwood customers? Absolutely.
  • PF Chang's had an app that lets you make reservations or order take-out. Obvious? Perhaps. Fantastic value for PF Chang's customers? Absolutely.
  • ComScore showed data that 38% of mobile phone users access their bank accounts on their phones. Bank of America has online banking and an ATM finder in their app. Obvious? Perhaps. Fantastic value for BofA customers? Absolutely.

In other instances, the value brands can provide is more obscure—and even more delightful.

  • Take Nike+. I recently started running. I'm up to 2 miles. I'm very proud of that. Nike has helped make that happen with their app that tracks the speed and distance of my runs and motivates me to keep going. My personal connection with the Nike brand? Through the roof.
  • Zipcar allows me to open the door to my car with my phone. That blows me away every time I use it.

At iMedia, Ryan Wein, the digital marketing manager from Kia Motors displayed a monstrosity of a useless iPad app that had their disco hamsters hip-hopping their way around a digital showroom. According to Ryan, "I don't think the iPhone can provide value to my customers."

Really? Why do I need to carry a key if I have my phone with me?

Zipcar found a way to create value. Think a little bit harder.

The power of mobile is at our fingertips. That power is not in teeny-weeny banners ads. You need to think hard, be strategic and make smart investments to take advantage of that power.

But that power can help you win.

2 Responses to “The very real state of mobile”

  1. Marc C says:

    Adam,

    Are there any hard numbers on what advertisers are paying (or rather, are willing to pay) on median for current mobile ad channels? How do they stack up against advertising costs on devices with larger real estate, and not now, but *before* the smartphone revolution?

  2. Adam says:

    I'm sure those numbers exist. I don't have the readily available, though. Sorry.

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