Thought Leadership: “Can mobile advertising look to the web for success?”

In the first of a new series of Media Playground Thought Leadership pieces, Alex Rahaman, director of mobile at Unanimis, says that what we learn from our experiences online can help maximise the potential of mobile.

Analysts and industry commentators have been hailing the brave new dawn of mobile advertising annually since 2006. They cite its market penetration, personalisation and importance to the owner. They see the web as an old format whose users will rapidly flee to the ‘fourth screen’ (after cinema, TV and web). However, the growth has been delayed and some observers wonder if mobile will ever become a successful media for advertising.

We see mobile as an integral part of the media mix, not an alternative. It is an important and highly accessed medium which demands a greater share of budget. But today there is a large difference between the size of the web and mobile advertising markets. In the UK, the mobile advertising market is roughly 1% or 2% of the size of online in the UK, even though it has nearly half the number of browsers.

Perhaps we should look to the web to see how mobile can become successful. I run mobile advertising for a digital network, but those nine years since launch have been dominated by web advertising, not video, not social networking and not mobile. But here we can see the parallels and opportunities for mobile advertising.

Mobile phones occupy a different place in the lives of their owners compared to PCs, but there are many parallels in how both are consumed. Mobile and PC owners do similar things, such as browsing the web, playing games, listening to music, watching video, sending emails and accessing social media.

It is also clear that large companies – Google and Apple – have bought into the opportunity mobile advertising represents, spending over $1 billion combined on the recent acquisitions of Admob and Quattro respectively. That investment is a very sizeable statement of their intentions in this space – nobody wants to lose that sort of loose change.

Indeed if you look at the sites that consumers browse on PC and mobile, it is clear there is a lot of crossover. For example, in the top 10 sites both mobile and PC have five similar media and search sites (Facebook, Google, MSN, BBC and Yahoo!) in their top 10. The remaining five in the mobile Top 10 are all mobile specific sites, three operator portals (O2, Orange and Vodafone) and two handset makers (Apple and Nokia).

Some might suggest that people snack on content on mobile and don’t really spend quality time accessing media there. However, our Exposure2 research showed that 87% of mobile media users consume mobile media at home, not just when out and about. Backing this up, 40% of iPhone users browse the web on their phone more than their PC.

So what lessons can be learnt from the success of web advertising? (Particularly in the UK, where the market grew from £150 million in 2001 to £3 billion in 2009, overtaking TV.)

The most important areas are in standardisation and ease of buying. Both of these were difficult for networks and buyers in the late 1990s but portals took the lead with strong sales forces, a professional approach and some attractive introductory packages. Today’s equivalent of portals in mobile advertising are the mobile operators, but these are very different businesses with billions of pounds in revenue coming from their telephony businesses.

In the late 1990s the portals worked together with the IAB to set standards, establish best practice and eliminate shady behaviour such as click fraud. Today the MMA leads those initiatives and operators are joining forces to establish common initiatives such as MMM, a ground breaking standard which clears away any misconceptions for buyers of the scale and make up of mobile browsing.

There are some further developments which will accelerate mobile advertising, and again we can look to the web for these:

• Third-party agency side serving of creatives to allow the agencies to take control and feel comfortable with the measurement of their campaigns

• Standardisation of adfunded messaging and application ad formats – something the MMA is working on currently.

• Building mobile as a brand medium rather than just a performance medium to sell mobile content. Integrated sponsorships of sites and applications could well be the start of this.

However, one thing we can’t change by ourselves is how brands are investing in mobile. We can make it as straightforward as possible for planners to buy and track the audiences, but brands need to have a worthwhile presence to generate a return of investment case. So, much like the growth of e-commerce around 2001-3, linked to faster internet speeds and education, we expect the key to growth in mobile will be the rise of m-commerce.

Commerce features unique to mobile such as coupons and location based offers could combine with already common wallet and credit card payments to significantly grow mobile commerce. So as an industry we do need to develop these innovative features that are unique to mobile, but within the planning and buying structures that are well worked and have become familiar for the online industry.

The web is still a young industry and is innovating and growing, as is TV and even outdoor. Mobile sits alongside all of them as the glue, the media that sits with someone all day, continually interacting and reinforcing other media and influencing behaviour.

In some respects mobile and web occupy different places in consumers’ lives. However, there are also many similarities, which offer us as an industry a fantastic opportunity to learn from our experiences online and really maximise on the potential of mobile.

Unanimis is exhibiting at Media Playground 2010, where advertisers, senior agency professionals and media owners will come together to debate advertising opportunities across key areas of digital media.