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Killer apps, smartphone explosions, tablet wars and big RTB data: Mobile trends in 2013

Posted by Victor Malachard on November 27th, 2012 at 11:44 am

If you have online access right now, do this: go to Google Trends, and type in mobile advertising. You’ll see a vaguely static line across the screen from 2004 through 2011. Then you’ll see a huge spike to the right. That’s 2012. And we’re looking at more of the same in 2013.

At Adfonic we see the mobile world through the advertising lens. Every month we serve billions of ad impressions, and on a quarterly basis we analyse huge volumes of data across our platform to produce the Adfonic Global AdMetrics Report. The report serves as a barometer highlighting current mobile advertising trends. For example, in Q2 2012 we revealed that, globally across our platform, Android had surpassed iOS to become the most popular platform for mobile advertisers. While we can’t predict the future (yet), we anticipate more game-changing developments in 2013. Here is our pick.

Real-time Bidding (RTB) will take big data and super-smart algorithms to become mobile advertising’s ‘killer app’

RTB is a means of buying and selling mobile inventory via a fully programmatic, instantaneous auction one impression at a time. It’s the smartest, most efficient way to buy mobile advertising inventory because the market establishes the price. At Adfonic we’re already seeing the proportion of RTB-enabled inventory climb significantly. It is achieving higher clickthrough rates for advertisers and higher earnings for publishers across all channels. We’re convinced it’s going to have a significant impact.

With RTB, buyers determine where to bid based on big data and super-smart algorithms. By big data, we mean thousands of pieces of demographic and behavioral data applied to each ad request that helps advertisers to determine its value. And by super-smart algorithms, we mean the ability to look deep into this huge, rich dataset and find audiences that are more likely to convert, bidding programmatically within milliseconds. It’s the epitome of the big data approach that relies on tech and data processing techniques that have only become technically possible on mobile in the past year.

RTB could be the killer mobile advertising app for 2013 because it enables advertisers to buy audiences rather than inventory. Today, most campaigns are targeted against criteria such as device type, platform, mobile operator and territory. This is not how advertisers want to target. They don’t want to draw inferences between demographics and device, or platforms and people. They want to buy audiences, and in 2013, with the adoption of RTB, they will.

More devices and form factors will see smartphone explosions and tablet wars

If mobile device sales are in any way taken as a proxy for mobile advertising revenue, then 2013 looks set to be a very good year indeed.

In 2013, Apple may sell 300 million iOS devices, and Android-based devices may top the one billion mark. Gartner predicts that mobile phones will overtake PCs as the most common Web access device worldwide.

Just about every major tech brand is turning itself inside out to get into mobile. Microsoft is building hardware. Google is marketing devices, platforms and exchanges. Amazon wants to segue via content. Apple has more power to its arm with the iPad Mini, while Samsung snaps at its heels with its Android-based Galaxy devices.

And this is not just more devices; it’s more form factors too. The iPad Mini joins a stable of seven-inch models such as Google’s Nexus 7, Samsung’s Galaxy 7 and countless competitively priced Android devices from Asia. Alongside already established 10-inch tablets we also now have intermediate ‘phablets’ that fill the gap between phone and tablet, such as the HTC One X. They will all compete for mobile advertising attention but of all these, in 2013, the tablet will cause the greatest disruption for mobile advertising. The 10-inch tablet format can show mobile-optimized sites and desktop sites equally well. 2013 could easily shape up to be the year of tablet wars.

Advertising will get smarter across screens

We are already familiar with the ‘two-screen’ phenomenon, where people tweet, text or share while watching TV. This isn’t just anecdotal: in 2012 the IAB surveyed typical mobile device use and found an ecosystem of use, in which consumers used smartphones to text in the mornings, laptops and PCs for work, and tablets and smartphones in the evening for social media and online window shopping.

With more devices coming to market, 2013 will see this become a multi-screen environment in which people use a variety of devices in a variety of settings. Advertisers shouldn’t see this as a challenge: it’s actually a huge opportunity to be smarter, by creating campaigns that work across the marketing funnel as well as mobile channels. Mobile could help integrate campaigns, providing those ‘stepping stones’ between static screens that enable consumers to experience the same brand messaging no matter which channel, and moving them from awareness towards action.

Rich media will show the way forward with rich metrics

There is a Great Debate regarding mobile advertising metrics. Some claim that mobile offers poor clickthrough rates (CTRs), and that those clickthroughs don’t yield nearly the same value as online.

We should take 2013 as an opportunity to stop talking nonsense, and start thinking straight. As marketing professionals, would we ever treat TV campaigns in the same way online? Or radio executions like editorials? They are different channels requiring different strategies for execution, and metrics for success.

So it goes with mobile advertising. Static banner ads are the lowest common denominator in the mobile advertising market. Smartphones are capable of so much more than static banner ads, so it follows that mobile advertising now offers more too.

By more, we mean ads that can use the unique capabilities of mobile devices such as touch, pinch, swipe, shake and geolocation. The most effective ads use these features to incorporate elements that people can interact with, turning passive advertising into active engagement. They’re called rich media ads, and they are demonstrably effective, generating double the average clickthrough rates for advertisers, and up to ten times the average earnings for publishers.

But rich media points the way to a new way of measuring mobile. Going beyond CTRs, rich media can show the softer metrics such as brand awareness, brand engagement and purchase intent. So as well as encouraging brand engagement, rich media ads give mobile advertisers the means to measure this. From crude clickthroughs to rich measurement via rich media. That would be a great new year’s resolution for mobile advertising in 2013.

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