Mobile Fix: Mobile ad spend is up to £203m but online is well over £4bn…

Simon Andrews, founder of the full service mobile agency addictive!, says every agency and every client now includes digital in their thinking but the money hasn’t followed the audience, yet – though the mass market adoption of smartphones will accelerate the closing of this gap…

Last week we learnt that mobile ad spend in the UK is up by 157% to £203 million, which sounds like progress, until you remember that total ad spend is getting on for £12 billion and online is well over £4 billion. So we have a way to go yet.

We learnt from a new study from Boston Consulting Group that the internet economy in the UK is worth £121 billion – making the UK the best performer in the G20. This quote sums up the study;

It demonstrates that no-one – individual, business, or government – can afford to ignore the ability of the internet to deliver more value and wealth to more consumers and citizens more broadly than any economic development since the Industrial Revolution.

But you could argue that the effect on the marketing industry has been relatively muted. Of course every agency and every client now includes digital in their thinking but the money hasn’t followed the audience, yet. Morgan Stanley still talk of the $50 billion gap between how people spend their time and where advertising spend goes.

We’re convinced that the mass market adoption of smartphones will accelerate the closing of this gap, but we think every element of the marketing industry is going to need to change. Sounds far-fetched? Smart brands are already changing;

Nike: “Connecting used to be, ‘Here’s some product, and here’s some advertising. We hope you like it’… Connecting today is a dialogue.”

P&G: Mr Pritchard (P&G Global Brand Building Officer) pushed P&Gs recent digital-is-more-efficient strategy, saying digital and public relations give P&G the greatest return on investment and “go hand in hand”.

Coke: “All advertisers need a lot more content so that they can keep the engagement with consumers fresh and relevant, because of the 24/7 connectivity. If you’re going to be successful around the world, you have to have fat and fertile ideas at the core.”

General Mills: With digital our packaging is becoming a platform for us.

Unilever: “In a digital age, that means inviting and empowering people to own our brands – their brands – and shape them alongside us. Creating marketing that is social by design. Helping people tell their brand stories, not just hear ours.”

So these brands aren’t looking at business as normal. They are recognising that the new digital opportunities are driving a re-think of what marketing means.

As brands can observe their customers digital body language they can create a real dialogue. The huge amount of data has a fundamental effect on marketing – the story where US retailer Target knew a customer was pregnant before her family did is just the beginning. The Guardian has a good look at the sheer scale of data being produced, which is requiring new language; watch out for yottabytes, which would be written as 10 followed by 23 noughts.

So all those people who talk about Data being the new Oil are right. But a big problem is that few of the people who talk about Big Data actually have a clue what to do with it. We can expect a whole new class of technology firms focused on helping marketing make the most of this data.

As our friends at Google always say data beats opinion, so we’re moving to a fact based approach to marketing, that encourages experimentation. There is still room for creativity in this moneyball marketing world – but we’ll see people pretotyping* ideas inexpensively and only spending money on those that are shown to work. The smart people at Albion explain this brilliantly in their write up of their latest work for GiffGaff. Of course not every agency gets this new age as this US story shows.

*Pretotyping is a really big idea so well worth reading up on

GAFA

The Harvard Business Review has a good comparison of the business models of Apple and Amazon. Interestingly they see that Amazon should be a better partner for content players, because they make their money through software sales, whilst Apple make theirs from hardware.

Amazon’s incentives seem more aligned with those of its media partners (“we win together over time”) than Apple’s with its partners (“I win first; you later… maybe”).

Amazon continue to invest in the logistics of their business, buying a company that makes robot pickers for their warehouses.

Apple are pushing a new standard for nanosims, which are around a third of the size of the micro sim cards in the latest iPhones. Motorola (now owned by Google of course) Blackberry and Nokia prefer another solution, fearing that Apple could end up owning a potentially valuable patent.

And the desire to game the Apple app store, which is essentially broken, is leading to lots of dodgy practices.

Google are starting to monetise their dominant position in mapping, leading some people to look elsewhere. Obviously Bing will seek to take advantage but could this also be good news for NAVTEQ – bought by Nokia for $8 billion a few years back?

Facebook tells marketers; If you want bigger ads, you’re doing it wrong.

Games

Disney have developed their first mobile character. Swampy has been launched through a mobile game called Where’s my Water, which is at the forefront of Disney’s drive into China. The Disney mobile guy says that someone is going to build a game that will reach a billion people.

Could that someone be OMGPOP? Six weeks ago they launched a game called Draw Something. It has sold 35 million copies. And now they are being bought be game giants Zynga – for $200 million!

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