Mobile advertising continues to show strong growth, and, according to emarketer, it’s set to reach annual investment of $95bn by 2018. Despite this growth, when we compare consumer time spent on mobile verses mobile advertising investment share, there’s still a severe lag, suggesting there are key factors holding back spend in the area.

In an effort to understand the challenges still faced by the marketing industry, Affable Digital has carried out a survey of 120 senior media agency and brand marketers and decision makers, to track sentiment towards mobile advertising across 23 markets, including all the major media hubs.

Satisfaction and Challenges

Encouragingly, 59% of respondents expect to grow their mobile spend by over 25% in 2014 and 20% expect to double their investment. These numbers are in line with the widely documented rise in investment into the channel, but this only tells half the story. The survey found that 78% of respondents believe that the mobile industry is lacking in quality data to warrant investment, perhaps explaining why mobile still trails digital and other traditional media by a wide margin in the time spent verses investment stakes.

Despite the fact that expenditure is rising, 57% of respondents said that they were not satisfied with their mobile strategy. Common challenges that were identified include: lack of understanding of the mobile’s role in the marketing mix, client/agency education and quality of data. Notably, previous concerns about lack of creative canvas on mobile, have seemingly fallen by the wayside.

Clearly there is a job to be done so that marketers understand the full potential of mobile and how it can enhance other media in the marketing mix. Given the central role that mobile plays in consumers lives – it is the only screen they carry with them at all times – it should also be at the heart of the overall marketing and media strategy.

It is ironic that two of the key strengths of mobile advertising, also appear to be two of its biggest challenges. The flexibility of mobile to play numerous parts throughout the consumer journey appears to make it harder for marketers to understand it and to utilise it to its full potential. Additionally, the inherent personal nature of the mobile device should allow hyper targeting which should be extremely beneficial in advertising; however, the data to allow really effective targeting is not there yet.

It is here, the research showed, where the operators and other data holders can play a key role, to fill the cookie void that currently exists on mobile.

Targeting

As the buying and selling of media increasingly moves towards programmatic trading and a data driven marketplace, buyers who are able to identify users more precisely will be able to reach the right audience more effectively and efficiently. The vast majority of respondents (93%) said that precision targeting was important in media planning but only 1% described the current targeting options on mobile as ‘excellent’ and 87% described targeting on mobile as ‘average’ or worse.

The first type of audience targeting that is often referenced in regards to mobile, is location-based. While this is increasingly important for those brands that want to drive footfall in real-time, the most in-demand in the mobile advertising industry is actually demographic data. A consumer’s age and sex enables marketers to revert back to traditional buying methods, but with much greater accuracy.

92% of respondents believe that new data sources will be increasingly important for targeting and executing campaigns. There is a clear opportunity for those organisations with quality, first-party data to be able to build new revenue streams through advertising – in a secure and anonymised way.

Opportunities for Operators

The opportunities open to mobile operators in the mobile advertising eco-system are substantial. 73% of respondents believe that operators have a key role to play in the future of mobile advertising and 78% would be interested in working with them.

Enabling media planners to buy mobile media with accurate audience targeting may mean that they will once again feel comfortable buying a campaign on a premium CPM basis- rather than through CPA and CPC buys that have become commonplace. Over 89% of those surveyed said that they would be willing to pay a premium for better targeting if it meant less wastage when reaching their target audience. New sectors looking at investing in mobile, such as luxury, will drive higher CPMs only if the advertiser is satisfied that their ads are reaching the right audience.

The opportunity is global - 59% of respondents see a growing importance for emerging markets in their media planning this year. In many emerging markets the mobile phone is the leading form of mass media. Those operators who can build a workable solution securely using customer data to enable advertisers reach audiences at scale, will find a huge demand from global brands.

It’s now or never

While some operators have been recognised for their work in this space to date, there is still a long way to go. Beyond the offerings of Telefonica/O2, Orange, Telstra, most respondents could not name an operator engaged in the advertising space. But with sentiment towards mobile advertising at an all-time high, operators have more to lose by sitting on the sidelines and not getting their ad businesses in order.

 

By Ryan Afshar, Director of Affable Digital.

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