The mobile advertising market is still lacklustre, but there are a number of areas which could be explored to help drive this advertising segment towards faster growth.
With the recent explosion in smartphone sales – a third of the world’s population now owns one and uses it anywhere and everywhere – expectations for mobile advertising are correspondingly high and the sector seems bound to grow. However, there is still some way to go if all players concerned are to really capitalise on the huge potential of this market. Currently mobile accounts for 20 - 30% of the total audience for web advertising, reveals a report by US-based independent technology and market research specialist Forrester entitled ‘Mobile Advertising: It’s Time to Get Personal. This audience is forecast to increase dramatically in the next few years, actually overtaking the fixed terminal audience by 2020. "Over a 15 year period, we are set to see exceptional growth," underlines Renaud Ménérat, co-founder and Chairman of French mobile marketing consultancy userADgents. “In 2005, the mobile advertising market simply didn’t exist, but by 2020, it will have overtaken advertising on fixed Internet connections,” he predicts. Mobile advertising has only been around since 2007 and revenue is rising continuously (up 55% year-on-year) even though the advertising spend across all channels is actually declining.
Targeting advertising by "fingerprinting" users
While the mobile advertising spend remains low, mobile devices nevertheless enjoy a number of advantages for targeting ads. Some 58% of smartphone owners use them to access the Internet several times a day, which provides multiple opportunities to get them to view advertising. Moreover, a smartphone tends to be used by just one person, which means that professionals ought to be able to analyse the user’s focus of interest more closely, with a view to targeting advertising more accurately. The process of establishing the consumer’s individual profile – for example from data gathered when s/he downloads apps – is known as "fingerprinting". Mobile is in fact an excellent tool for gathering user data, and managing this data collection will be key to advertising growth going forward. For the moment, however, advertisers are not doing so well here, with 57% of Americans surveyed in 2013 stating that the content of the ads they encountered while browsing was "not relevant" to them, compared with only 20% who said the advertising was well targeted. Apple has blocked data sharing for a large part of the mobile applications market. However, with its mobile in-app advertising platform iAd, Apple is also a stakeholder in this business, taking a large percentage of in-app advertising revenue.
Taking into account mobile market specifics
In addition to being of obvious value to the user, mobile advertisers also need to come up with simple, fast content specifically designed for a small screen. If this sector is to succeed, it is therefore vital for advertisers to work together with the app publishers who will be putting out their ads, stress the Forrester experts. At the present time however, it seems that advertisers are not really taking into account the market specifics of mobile advertising. The report criticises the fact that “the majority of ads on mobile devices still look like mini versions of ads on fixed terminals.” In order to make some real progress here, advertising agencies ought to review their market strategies from time to time and seek to take advantage of data gathered by app publishers. This would give them an opportunity to improve their creativity in terms of both the form and content of the ads they offer, and would further encourage the ‘drive-to-store’ phenomenon which mobile advertising has helped to popularise. The fact is that while advertisements on fixed terminals motivate consumers to go on to websites, mobile advertising also entices people to go to bricks-and-mortar stores, which still account for 80% of all retail sales in the United States, points out Forrester.