We’ve all heard for several years that the effectiveness of advertising — print, television, radio and even digital — is suffering from the law of diminishing returns. While there is some truth to that phenomenon, advertising in all forms is far from dead.
In fact, since 1926 (with the exception of a dip during World War II), ad spending has moved along at a regular clip, steadily accounting for a little over 1% of the U.S.’s (growing) GDP. What has changed is the mix of where advertising dollars are spent.
Why the history lesson? Sometimes the best way to predict the future is by looking at the past. In this case, there are a lot of conflicting opinions on mobile advertising, but it’s likely that mobile advertising, in some form, will account for a greater piece of the pie in the future. In this post, we will evaluate the different types of mobile advertising currently available and what the benefits of each are.
Mobile Web
Today, one of the most prevalent mobile ad formats is via the mobile web. These ads come in the form of take overs (ads that cover most of your screen until you click through or close the ad with the “x” in the corner), banners at the bottom or top of the screen or embedded in the content itself. These are obviously the easiest to serve up, but over time, likely to be the most ineffective.
Similar to banner/takeover ads on the digital web, these ads are disruptive and often not very targeted. Like the digital advertising we see on our desktops and laptops, these ads will deliver impressions and some level of click throughs based on sheer volume of traffic but like their counterparts, will be ignored or worse, loathed by a majority of users.
In-App
One of the advantages of in-app advertising is that advertisers have more control over where these ads show up in the experience and who the ads target. One of themes you’ll notice in this light analysis is that the more targeted and timely mobile ads can be, the more effective they are.
The key to making these ads successful is collecting enough information up front — either via social authentication using Facebook, Google or Twitter — or via a sign up form.
Obviously app makers must be careful because asking for too much information can create a barrier to entry but getting access to things like location (more on that later), age, sex, and ideally other interests can dramatically increase the uptake of these types of ads. Over time, these ads are likely to be one of the most successful.
Voice Over
If you use the non-premium version of apps like Pandora, Spotify or Rdio, you have probably heard a local ad similar to what you might hear while listening to the radio. These are ads that embed into the medium itself and are impossible to avoid. Similar ads appear via fitness apps like MapMyRun either at the beginning, end or after a certain milestone (one or two miles in).
Because many of these ads are targeted by location, they are more relevant than the run-of-the-mill mobile web app but likely less targeted than an in-app ad. While these ads can be viewed as intrusive, they will continue to be effective if for no other reason than the fact that they are not easily avoided.
Mobile Video
As I mentioned in my post back in June, mobile video is big and getting bigger. As a result, video advertising is also an effective vehicle. The advantage that video advertising has over other formats is that it is more engaging and better geared toward story telling.
The key, however, is brevity so advertisers that look to platforms like Vine (6.5 second limit) or Instagram (15 second limit) for inspiration will be assured of greater success than those that insist on more traditional 30 and 60 second spots.
Text/SMS
It’s ironic that five years ago while leading a panel on mobile/location-based marketing, I stated that even thinking about using good old fashioned text/SMS as a vehicle for marketing made me nauseous. But five years later and 20+ years into the technology’s life-cycle, this channel is still one of the most powerful when it comes to reaching customers.
The one major caveat here is that advertising to customers (or prospective customers) using this very personal channel is that with great power (or in this case, access) comes great responsibility. That means that while marketers have unfettered access to their audience, the expected value from the end user is several times higher than it would be in places like in-app or via the mobile web.
Often, the best value for this form of advertising is to drive engagement via other channels like mobile social, app or web. Worth noting is the fact that text/SMS is one of the few mobile advertising types that is available to all mobile phone users (feature and smart) versus most of the others listed here which are heavily skewed toward smart phones and/or tablets.
Social Networks
Similar to video, use of social networks via mobile devices has gone through the roof. As a result, there is a sheer volume play for any advertiser that wants to reach their targets via Facebook, Twitter, Instagram and Google+.
Similar to in-app advertising, leveraging paid social can also be more effective based on the amount of information available (interests, location, social graph, age, sex, etc.) It also allows for discrete targeting, especially on Facebook where marketers can literally reach audiences that are sliced and diced based on thousands of data points.
The double edged sword in advertising via social is that there is an even higher burden on the ad creative to be relevant (particularly on Twitter and Instagram) because if not, all of the other text/image updates will simply drown out the paid activity.
Location-based
Search engines like Google and Bing have been strong location-based advertising players for several years now but increasingly, discovery-based applications like foursquare and Yelp are making their own claims to this space. Understanding where people are down to a five-yard radius can be an incredibly powerful asset when helping to steer customers toward a particular venue or service.
Similar to text/SMS, however, marketers must be careful not to overstep boundaries given the sensitive data they now have access to. Realistically, location-based advertising will continue to be a part of all of the mobile advertising formats above but for now, it still provides unique advantages over some of these other formats.
Conclusion
Like other new channels before it (print, radio, television, digital), mobile is starting to see its day in the sun. As mobile devices and usage continue to proliferate, the mobile advertising space will follow suit.
While offering unique benefits like discrete targeting, an understanding of where and when someone is along with an ability for two way communication, marketers must be mindful that they are not only honoring customers privacy as well as delivering a better, more targeted experiences. This is particularly true with formats like SMS, social networks and location-based mobile advertising.
What marketers should be leery of is falling into the trap of treating mobile advertising like more traditional digital advertising. The fact that mobile devices are considered more personal with less real estate and battery life considerations raises the stakes for which disruptions they are willing to accept. But ultimately, mobile should give marketers opportunities to reach audiences in a meaningful way unlike ever before.
So looping back to the original question the title of this post asks — does mobile advertising work — the answer is it that depends. Done right, the answer should ultimately be a resounding yes. But then again, marketers aren’t always good at doing things right. The QR code being one of the greatest examples of this phenomena.
