Mobile advertising is evolving as an industry, but it is how well the platform integrates with other forms of advertising that will play a big part in how quickly its uptake will be. The introduction of standards to help make ad buying easier and consolidate a fragmented market will also aid adoption, one industry player notes.
According to Rohit Dadwal, Asia-Pacific managing director at Mobile Marketing Association (MMA), companies used to sign up for mobile-only advertising initiatives that had limited scope and impact if the campaign ran across several geographies and markets.
However, they are now moving away from such projects and looking at more integrated advertising strategies that bundle mobile ads with other platforms such as print, TV, and Internet, he said. The TV program American Idol, for example, makes use of mobile advertising to complement its existing TV ads by using SMS for "last mile communications" with viewers, he added.
Such multi-platform advertising strategies will help boost the mobile advertising industry forward as a result, Dadwal noted.
Another push factor that will propel the industry is having established common standards, which is why the MMA had introduced the Mobile Advertising Guidelines version 5.0 and Universal Mobile Ad Package (UMAP) version 1.0 documents in 2011, the executive noted.
With regard to UMAP, the association had in February updated its recommendations to include streamlining over 60 ad unit sizes to just six that represented the most frequent and consistent usage among companies. Having this will allow businesses to streamline their ad buying, which help for large-scale, global campaigns, as well as cut down on the many different formats and dimensions available in the market to the most common and effective ones. The association is hoping to establish these as industry best practices, to make it easier for companies to track their campaign results, he said.
Boosting market growth
These two developments will only boost the adoption of mobile advertising, Dadwal said, adding that the global industry will grow to US$15 billion in three to four years and with the Asia-Pacific region constituting US$7 billion to US$10 billion of the overall market.
Another market watcher, Aapo Markkanen, senior analyst of consumer mobility at ABI Research, had a slightly more optimistic outlook. He said worldwide mobile ad spend was at US$4.3 billion in 2011, and will reach US$24 billion by 2016. Asia-Pacific's mobile ad expenditure, in particular, amounted to US$1.5 billion last year, and will come up to some US$9 billion in 2016.
Zooming into the various advertising segments, he noted that search banner ads and display ads were the top two choices as both were broadly understood by advertisers and help achieve advertisers' goals in achieving direct response and branding.
Mobile video ads were also identified as the up-and-coming segment to watch out for by the analyst.
Markkanen said: "Video is a rich medium, but in the mobile space, it's still being held back by the low smartphone penetration rates, technical incompatibilities related to codecs and handset specifications, and mobile network constraints."
He did add that improving device capabilities and the migration to 4G networks globally will give mobile video advertising a boost.
Determine mobile ad goals to improve ROI tracking
In terms of determining returns on investment (ROI) for mobile advertising, Dadwal said there is "no comparison" between this form of advertising with traditional forms such as TV and print. There are different standards for all platforms, and they all serve varying purposes, he stated.
Phalgun Raju, general manager for Southeast Asia, Hong Kong, and Taiwan at InMobi, added that the mobile medium has an edge over rival platforms because "its immediate, targeted, and personalized reach is unparalleled".
She cited research from Insight Express which stated that mobile ads' influence on branding metrics was much higher than online ones, for instance. Aided awareness was three times higher on mobile, while message association and purchase intent were four and five times higher than online ads, respectively, she added.
"Consumers carry their mobile devices with them at all times, giving advertisers a way to reach them 24/7," Raju said. "The mobile medium not only complements other traditional and digital media channels, it also allows advertisers to reach out to consumers who only use mobile to access information."
However, the level of granularity for tracking the performance and effectiveness of mobile ads also poses a problem, Dadwal pointed out. This is because while the increased "trackability" increases ROI and user engagement, companies and advertisers might not know which measurement to follow that would best suit their needs, he explained.
In general, companies should be looking at the time spent by one consumer on the mobile ad, followed by his engagement with the ad, and the interaction and effectiveness of the ad in achieving its goals, the managing director said.
These are merely recommended templates, though, and businesses will need to determine whether their mobile ads are to be used for "acquisition, retention, or brand building". For instance, mobile ads through SMS or MMS elicit more immediate response and are useful for acquiring sales or new followers. Comparatively, banner ads on mobile Internet are better suited for brand building, he said.