Vikas Gulati | July 4, 2012
Experts have been calling out “Year of Mobile” every year for the last seven years. Obviously, mobile advertising hasn’t delivered eye-popping numbers, as it should have, making mobile the biggest untapped media opportunity of our times.
What’s so different about this year? And will be yet another piece on unending mobile statistics?
Just to state the facts upfront, the mobile advertising industry is pegged at US$ 5.78 billion* for 2012 with over 60 percent ad revenues coming from Asia. But, with the total online ad spending hovering around US$ 90 billion* for 2012, mobile still remains a very small part of total digital pie. (Sources: mobileSquared/Smaato)
I have been traveling extensively the last couple of months across Asia – China, India, Thailand, Indonesia, Malaysia, and closer back home in Singapore. Being a business head of mobile ad network, I spend considerable time talking to key stakeholders in the mobile ecosystem – from developers to publishers, from content providers to large brand advertisers. I have also been attending and speaking at some of the leading digital /mobile conferences in the region, networking with peers in mobile industry, and fortunate enough to hear the views of the industry thought leaders.
As I sat down to write this piece, rather than trying to focus on numbers (and there are tons of it on the web), I wanted to give you a pulse of what’s happening in the mobile advertising space on the ground and why I believe mobile is all set to make a huge impact on digital marketing spends in a short span of time.
Five Points Why Mobile Advertising Will Take Off in the Next 12 to 18 Months
1. The journey of mobile from “why” to “how”: We all know consumer adoption of mobile is soaring – both in terms of penetration and time spent. The interesting part, though, is that it has finally caught the imagination of the brand marketers. So the discussion framework with marketers has shifted from “why” mobile to “how” mobile. Marketers now expect effective mobile solutions that can help them solve their business/ marketing problems. Some of the world’s largest brand marketers are spending disproportionate time and resources to understand how mobile could be used effectively for building brands. The power of mobile as a medium is obvious and it’s the “how” piece that is being built up and given shape.
2. Monetization for mobile publishers: As the mobile web expands, publishers are also experiencing rising page views through mobile devices. In the past, most publishers were not concerned about the mobile user base with many publishers opting not to even have mobile friendly websites. Today, most publishers have mobile friendly sites and apps. Thus, publishers are now actively looking to monetize this user base – either via mobile networks or direct to clients for advertising, as the case may be. The important point is that the numbers are not that small anymore for publishers to ignore. This is certainly a huge positive as quality publishers and content is fundamental to growth of mobile advertising.
3. Mobile developers and rise of app ecosystem: Mobile developers are sought after talent. And venture/private capital is chasing the developer talent and start-ups. It’s not a surprise given that consumers’ digital interaction on mobile are shifting to apps in a big way. Not only Apple store or Android Play, alternate appstores like Getjar, Mobango, Appia, and the local operator stores are also flourishing in many markets. Just to give you a flavor of what I mean here – China mobile’s local appstores claims 1 million apps with 600 million downloads. Similarly, there are other local operator stores for Vodafone in India, Telkomsel in Indonesia, DTAC in Thailand, and many others.
The entire app ecosystem and mobile content consumption is spreading like wild fire and creating huge opportunities for brands and marketers to engage the consumers – something that marketers can’t afford to miss.
4. Mobile display formats and rich media executions: The fragmentation on mobile in terms of devices, operating systems, browsers, and platforms is mind boggling. Ad creative on mobile used to be a huge challenge operationally but things have changed. Thanks to a certain level of standardization of formats– courtesy of the Mobile Marketing Association, offers something that brands find easy to work with.
More importantly, formats on mobile are now much more brand advertising friendly, go beyond those tiny banners and text messages and deliver impact as interstitials or through full-screen advertising. Today, one can buy into full-screen inventory across smartphones or feature phones and deliver rich media formats such as videos and other executions. Imagine being able to plan a campaign with a similar set of creative across feature phones and smartphones across markets and platforms. This is paving the way for easy adoption of mobile among the brand marketers.
5. Mobile ad technology and evolving display ecosystem: The advertising ecosystem has evolved significantly and key ad networks are emerging as dominant players. Apart from Google’s Admob, Millennial Media and Apples iAds, there are independent networks like Jumptap and Inmobi . Beyond that, new ad networks are emerging with their pockets of strengths. The ad network I worked at has a focus on emerging markets; Airpush is purely on Android. These are interesting plays that add enormous amount of choice and depth to mobile marketing.
This is not all, mobile is also inching toward open real-time bidding (RTB). Mobile demand-side platforms (DSPs) such as Strike Ads, Fiksu, Turn, and X+1 are building platform capabilities on mobile and are also expanding. The way this is playing out is exactly in line with what happened on online web.
Clearly, mobile advertising is poised to take off in a big way. There have been talks on the explosion in mobile advertising for a number of years but the conditions for growth were not in place then as they are now. To be honest, I don’t know whether the real explosion in mobile ad spending will happen in 2013 or 2014, but the probability is it will be sooner than later.