The omnipresent smartphone has created a state of flux for marketers as they attempt to take advantage of mobile consumption, writes John Reynolds.
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Marketers are in a state of flux about how to get the best out of the mobile consumption juggernaut. On the one hand, the smartphone is omnipresent and omniscient and is now widely regarded as the remote control to people’s lives, providing them with the news they consume, the friends they converse with, and the goods and services they buy. A recent Internet Advertising Bureau (IAB) survey found that UK users are using some form of connected devices 34 times a day. Or, as doctor Simon Hampton, psychology lecturer at the University of East Anglia, pithily puts it: “People’s inability to leave their phones is the newest addition to common ‘displacement’ behaviours such as smoking, doodling, fiddling with objects and picking at food. It’s also an extension of ‘nomophobia’– the fear of being without your mobile.”Yet the rapid-fire take up of smartphones presents challenges to marketers on a number of fronts. Firstly, marketing budgets are not increasing, so where does any increased mobile spend come from? Secondly, smartphone screens offer far fewer advertising opportunities compared to a desktop and consumers are intolerant of advertising intrusion on this most personal of devices.Throw into the mix concerns around privacy – which are so rife that society is now more questioning than ever on what mobile manufacturers, network providers and advertisers know about their personal details – then you have a marketer with a potential migraine.The privacy issue was writ large in recent research, which found only 42 per cent of consumers are willing to allow location tracking on smartphones with 58 per cent feeling this is too intrusive. Is privacy an issue?
While the technology giants such as Google and Facebook may be the whipping boys when it comes to questions around privacy, it is an issue for all brands which run campaigns on mobile devices, particularly as the device is seen as so personal. If consumer behaviour is being utilised to target advertising, then the simple rule of thumb to follow, according to experts, is that consumers must be told why this advertising is being shown to them and provided with the choice of opting out of being tracked. Yet while consumers are intolerant of being snooped upon, according to Britta Anderson, head of mobile at media agency UM London, there is a broader education which needs to come to the fore about the value of data and the public’s misunderstanding of it.“I think as long as a customer gets a service I do not see a big problem,” she says of the privacy issue.This is a view echoed by Richard Hocking, EMEA director of performance marketing and mobile development at media agency Starcom MediaVest Group, who says: “Marketers need to understand that consumers need to experience a value exchange for the use of their data. As a consumer I’m happy for Google to track my movements if it means that it can start to understand my behaviour and begin pre-empting me when it identifies there will be traffic jams on my favourite route. That to me feels like a fair exchange.”Where does mobile fit into the mix?
A further issue for marketers to contend with is where exactly mobile marketing spend fits into the overall makeup of marketing spend. For many big consumer-facing companies, such as Coca-Cola, TV is still the big awareness driver, though the mobile part of the pie is growing all the time. Added to this is that there still pervades an uncertainty over strategy: should mobile spending be used for brand awareness? Driving site traffic? To help with purchase?According to James Chandler, head of mobile at Mindshare UK, one crucial dictum for marketers to follow is simply remembering that the mobile is a different and much smaller device than a desktop.“Brands and advertisers should look to build ad formats that are inherent to mobile rather than simply borrow from desktop,” says Chandler. “Also there is an extra sensitivity around intrusion, given that we can’t close windows and ‘click away’ like we can on desktop.”The rise of location-based apps
One natural consequence of the omnipresence of smartphones is that they give out location and spatial information when they are being used, which means opportunities for brands. Better data equals more targeted campaigns and this can be used to encourage e-commerce in a particular store or to participation in a store loyalty scheme.Likewise, the success of location-based apps such as Foursquare has prompted marketers to see the value of the crucial personal data such apps can provide. There have been some eye-catching location-based advertising campaigns running across different sectors, with the best ones cited as being non-intrusive.Ford, for instance, utilised a live weather feed to power its ‘Winter Checks’ campaign on mobile. Based on the weather in the user’s location, either a snow, ice or rain creative was selected where the users could interact by wiping the screen to reveal the message.Such location-specific campaigns can be used to bring businesses closer together, such as the campaign run by sister businesses John Lewis and Waitrose, which the mobile advertising buying platform Adfonic worked on.The campaign, showcasing John Lewis’ Click&Collect service, enabled users to buy John Lewis products online then collect them at the nearest Waitrose store.As Jay Fowler, chief product officer at Adfonic, puts it: “Location in rich media is a powerful tool for brands to provide consumers with highly relevant information.”But a word of caution is sounded by Milton Elias, the UK’s head of mobile at media agency OMD, who says: “Ultimately, location data made available in an application provides an extra layer of context and relevance but one must take the need that said app is fulfilling for a user into consideration.”He adds: “This is imperative if a marketer wishes to diffuse the most adequate message and content. In-app advertising shouldn’t block or interrupt enjoyment, ideally it should add to it or at least be relevant for the end user.”As marketers search out the best channel to funnel their marketing budgets, one venture which appears to be gaining a foothold is Weve, the EE, O2 and Vodafone mobile payment wallet, which runs mobile campaigns across all three networks and stores loyalty cars on smartphones.To date, Weve has run in excess of 400 SMS and MMS campaigns for brands including Nike and Morrisons. Crucial to Weve is the fact that its 18 million customers who engage with its advertising are all opted in, so they know what they are getting served.According to Adfonic’s Fowler, Weve is going to be a “very significant player” which is likely to feature on targeting plans for big brands going forward. He says: “Mobile is intensely personal, so the mobile device has the potential to become a one-to-one communications channel for brands to engage directly with their consumers. “It’s the first time true audience buying for mobile display has been available as a currency for digital advertisers, and at significant scale.”Despite the bountiful opportunities on mobile, many brands are still playing catch-up and now realising the potential that mobile advertising offers.According to data from the IAB by accountancy firm PwC, marketers spent £526m on mobile advertisements in 2012, compared with £203m the previous year – with Google taking the largest chunk of the revenue. But there still remains a vast discrepancy between the amount of time consumers spend on their mobile devices and the amount of advertising money companies spend there. There is a chasm across sectors, with the consumer goods industry leading the market with a 27 per cent spend of the mobile market, trouncing the likes of retails and telecoms with a seven per cent share, according to IAB PwC advertising spend figures.According to Fowler, the reason for this is “most likely down to these verticals being mobile commerce sectors where the user experience in mobile is still perceived as challenging. There is a terrific opportunity for these brands to step forward and lead their sectors into the mobile age, reaping the rewards of a first-mover advantage in the process.”The issue for Chandler is that alarmingly, there are still brands which are not optimised for mobile in 2013, despite the shift away from desktop to mobile.Meanwhile, OMD’s Elias says: “It’s somewhat shocking to see the relatively high number of paid search results that link through to content that renders poorly (or doesn’t render at all) on smartphone screens.”The rise of mobile consumption and ergo the rise in mobile marketing spend is expected to continue apace. But there are a multitude of issues for marketers to grapple with, not least of which is that mobile effectiveness is notoriously difficult to measure. Yet non-intrusive, location-specific advertising appears to meet consumer demand for targeted advertising, while Weve’s early success is likely to prompt a wave of me-too services. And as to the issue of privacy, it is all about a quid pro quo. Or as Starcom MediaVest Group’s Hocking says: “Consumers will not mind being delivered an ad that is bringing value to them – it just needs to be extremely relevant.”This feature was first published in The Drum's Mobile supplement on 8 November. Subscribers can download a copy of the supplement here.