As Nils Bohr famously said, “Prediction is very difficult, especially if it’s about the future.”
This couldn’t be truer than when you’re working in a white-hot industry, such as mobile advertising. There is so much going on with several potential tipping points in view, from adoption of formats, to developments in technology. However, there are some themes that we can safely say will be significant in 2015. There will be, quite simply, ‘more’ of everything; data, devices, players and potential. However, an increase in devices, data and players, naturally brings an increase in things like risk, fragmentation and confusion.
There’s a lot of talk of video booming in 2015. Facebook and Google’s YouTube have already proved this format to brands and, as Facebook is rolling out more video ads on the back of favourable advertiser response, this will be the major driver behind Facebook’s mobile advertising revenues in 2015, especially if you also consider Facebook’s acquisition of Instagram and the initial success it’s seen with sponsored posts, it’s only a matter of time before those utilise the video capability in Instagram. Larger and more engaging ad formats have always been the gateway to more spend on mobile advertising, and advertisers like video especially because they’ve spent the past 50 years building their brands through the rich storytelling that TV enables. Now, the larger screen sizes and HD quality, driven by the iPhone 6 and high-end Android devices, mean that the same stories can be told in the same way across mobile channels too. The tipping point for video will be massive scale: being able to deliver video to TV-sized audiences, as large publishers and ad exchanges adopt full-screen HTML5 video and the IAB’s Video Ad Serving Template (VAST) standard.
Next year, increased mobile usage - proportionally over other media - more audience data, improved measurement and maturing mobile DSPs will drive a boom in mobile programmatic spend. On the supply side, publishers will be attracted to programmatic by transparency, control via private exchanges and a more efficient programmatic direct model. These are just some of the reasons why all the predictions for programmatic are up: for example eMarketer estimates that US mobile programmatic spend will contribute 44% to the total US programmatic market in 2014, up from just over 30% last year, and predicts 2015’s figure to rise above 55%.
As with the hot dotcom properties in the late 90s and the social media ones in the early 2000s, mobile advertising is now experiencing huge volumes of mergers and acquisitions. With deals averaging one every two weeks, there were more M&As in the mobile advertising space in 2014 than any previous year. For 2015, this consolidation will continue as mobile devices establish themselves as the primary screen for consumers, and restructuring becomes a viable means of maximising this potential.
More big players
Google and Facebook both now account for approximately 70% combined global market share for digital advertising across the board. However Facebook has seriously challenged Google’s dominance, as the number one mobile advertising player in 2014, and this will continue next year. Other dominant players emerging in 2015 will be Millennial Media on the back of the Nexage acquisition to bolster its supply-side position and Twitter’s MoPub will continue to challenge Google’s DFP for publisher dominance. We can only expect more companies to challenge for the top spot in mobile advertising throughout 2015.
As mobile advertising expands, everyone is talking about data as the key to achieving scale of reach while maintaining quality of targeting. Demand, supply and pure-play data providers will continue to develop first-party mobile data capabilities or DMPs (Data Management Platforms) with the aim of shifting buying criteria away from targeting the devices and platforms we think audiences use. Companies are instead targeting audiences directly through rich data profiles. This will make mobile media buying smarter, more efficient and play into accelerating mobile programmatic. Moreover, it will enable traditional digital agencies to use one common currency for all digital buys.
Facebook and Google have cracked cross-device targeting with single sign-on. If you’re logged in, your searches and interactions on your smartphone in the morning, influence the ads you see on your desktop during the day, laptop on the commute home, and tablet (and soon your TV) during the evening. However, solutions that go above and beyond Facebook and Google, will become increasingly important in 2015 when it comes to cross-devices. Third-party players, like Adtruth, have attempted to create industry standards, and DSPs, SSPs, DMPs and other players are developing internal proprietary solutions. But as advertisers expand their media plans to include mobile, there will be a growing need for industry bodies, such as the IAB, to step up efforts around definition and measurement for cross-device marketing.
Native ad formats - that is, ads that are designed to fit into a publication’s look and feel - have taken off for direct publisher buys and many more large publishers are defining their native mobile advertising strategy. The most common native format we see today is Facebook’s in-line ads, which work well for scrollable mobile sites and apps. However next year’s challenge will be around adopting an approach that works for ad exchanges, and also for large-scale buys across thousands of apps and sites, especially gaming apps that make up the bulk of mobile advertising inventory. It’s a big challenge but also a big opportunity that could drive massive scale and re-use.
Two recent Apple product launches may be about to change mobile payments: Apple Pay and Touch ID. First, Apple’s entry into mobile payments with Apple Pay on the iPhone 6 and 6 Plus appears already to be driving retail adoption with retailers such as Wallgreens in the US saying it has doubled mobile wallet payments, as it complements Google’s Wallet on Android to give the market confidence in a more complete ecosystem. Secondly and potentially even more importantly is Apple’s Touch ID, which gives retail apps a one-click payment option. This could be one of the killer features of 2015 as it removes credit card entry for mobile retail purchases and, via its tracking and measurement capabilities, opens up mobile advertising to new retail marketing spend.
2015 is expected to be the year that mobile payments really make a big leap in the industry. Apple’s partnership with Visa Europe will see 1.5 million payment terminals open for business in 2015 and Apple’s progress with Apple Pay will only help to spur the industry on further. The fact that both Visa and Apple are trusted with consumers should make adoption less of a problem than we’ve seen with other mobile payment solutions.
Application Programming Interfaces (APIs) are popping up everywhere, as the Internet of Things gathers pace. From weather to traffic to public transport, there’s huge potential for advertising to become hyper-contextual, for example with location-aware promotions based on current weather conditions (“Feeling hot? Fancy an ice-cream? Feeling cold? How about some coffee?”) or developments on public transport (“If you’re stuck, call a cab”). Furthermore, combining the promotion with NFC payment incentives could trigger in-store retail mobile device payment adoption driving by hyper-content mobile advertising campaigns. We’re already accustomed to the saying “There’s an app for that”, but in 2015 it could be “There’s an API for that.”
By Stephen Upstone, CEO and Founder of LoopMe.
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