Mobile Liftoff

What are the most important trends currently shaping this rapidly growing channel?

Few digital advertisers would contest the importance of mobile. Its usage continues to climb, and eMarketer predicts that U.S. adults will spend an average of three hours and eight minutes per day on mobile devices this year. Constant innovations to this channel also make for exciting opportunities to those running mobile advertising today. Though, understanding when and how to incorporate mobile into an overall multi-channel media strategy involves knowing both the benefits as well as some of the challenges that currently exist for advertisers.

Before tossing mobile into the media mix, it is important to take a step back and look at the big picture. On average, consumers spend more time on mobile than any other device, leading many advertisers to believe that a “mobile-first” media strategy is the key to hitting campaign objectives. The problem is that “mobile-first” overvalues a single channel, placing the focus on the device as opposed to the consumer. A better approach is to consider a “consumer-first” strategy, placing the consumer journey at the forefront. The good news here for mobile is that it fits well into the overall path because it can form an intimate connection with consumers, as well as provide an opportunity for personalized brand storytelling through the use of push messaging and cross-device targeting.

Still, that doesn’t mean this capability always comes easily, which makes it very important to identify exactly where mobile fits into the overall consumer path for a particular brand in order to direct strategy and tactical planning. This is where it can become confusing for some, since the space is rapidly changing and there are seemingly endless arrays of tactics for brands to choose from. Advancements in ad technology are driving much of that disarray, so let’s spend some time looking at the current state and capabilities of mobile.

Location targeting

Effective targeting on mobile begins with a good strategy, and for many digital advertisers, that increasingly means location targeting. According to BIA/Kelsey, location targeted ad revenues are set to grow from $4.3 billion to $18.2 billion in 2019. The basic concept behind location targeting is that users are more likely to engage with a specific message if they are in a location that is relevant to that ad; in other words, seeing the right ad at the right place at the right time. A recent poll by xAd, a mobile location-based intelligence platform found that eight in 10 advertisers use location targeting on mobile worldwide. Often this is done by taking the desired audience of a given campaign and layering on location targeting to reach an even more relevant user.

The technology varies slightly depending on the platform, but essentially this works by creating a radial fence around a specific business address. Users that have passed within a radius of that business address are considered to have visited that location. Advertisers can then target users that have been to that location or target them in real time when they are at the location currently. Messaging used when targeting users that have previously been in-store versus those who are currently at a location may differ. Often this is used to drive in-store traffic or encourage sales of a particular product, as was the case with an xAd campaign run with BMW UK to promote the BMW 7 Series. Proximity targeting was used to reach consumers at competitor dealerships of BMW, in order to increase awareness of the brand while users were in the “car-buying mindset.” This specific campaign was successful in lifting inquiries, foot traffic and sales by reaching an extremely qualified portion of the BMW target audience, as they were already in-store and likely considering purchasing a high-end luxury vehicle.

Cross-device tracking

Reaching users across all screens is great, but targeting a single user and following them across their multiple devices is even better. Mobile devices are important to users, but they don’t take the place of desktop and tablets. Cross-device targeting adds another layer of sophistication to multi-channel digital advertising efforts, leading to higher conversion rates and a more efficient use of ad dollars. Conversion rates are often higher because the user is seeing the message multiple times on various devices. Also, for more complex conversions such as the purchase of expensive items, the path to conversion for a typical user tends to have more touch points and cross-device targeting can provide valuable insight in order to educate future campaigns.

There are two tracking methods used to identify a unique user in order to cross-device target: deterministic and probabilistic. The former uses post log-in data from users to identify individuals across devices (i.e., the user logs into Facebook, Amazon, Google, or other sites on mobile and desktop) who can then be targeted on multiple screens. The latter uses a collection of data points including IP addresses, browsing patterns and device proximity to determine the probability that multiple devices belong to the same person. Companies that use probabilistic methodology include Drawbridge and TapAd (recently acquired by Telenor). In these instances, a core set of deterministic data is used along with the data points mentioned above to train their algorithms. As a result, cross-device tracking using probabilistic methodology tends to improve over time as the technology learns.

When comparing the two scenarios above, deterministic is clearly the more accurate of the two. However, this method is limited by scale. Increasingly, more companies are using a blend of the two. Oracle for instance has partnered with TapAd to help bridge the gap between online and offline advertising efforts. Cross-device tracking is undoubtedly flawed in some areas, but continuously smarter technology solutions are beginning to surface that are expected to increase scale and improve accuracy.

Mobile apps

Looking for a way to streamline life or simply pass the time? There’s probably an app for that. Brands know this and are eager, sometimes too eager, to promote using their own personal app. While apps are great for some brands, other times a mobile website makes more sense. Mobile apps can be great tools for engaging a mass audience in an immersive way, utilizing the inner functionality of the smartphone to encourage users to connect with a brand. Deciding whether a mobile app is a worthwhile investment depends on the brand itself, as well as marketing objectives. Branded apps can be extremely effective tools, but are also expensive and time-consuming to create and maintain. Brands should ask themselves a few questions. First, is this an app that users will want to download? Second, will enough downloads result to justify the cost of development and maintenance? And finally, is there enough value to retain users and keep them coming to the app again and again?

If the answer to any one of these questions is no, then a mobile website is probably a safer bet. While 90 percent of mobile time is spent within mobile apps, that time is concentrated in a select few, such as social and email. Research by Morgan Stanley indicates that while less time is spent in mobile web, traffic on this channel is significantly larger, with mobile browser audiences doubling mobile app audiences. For brands, the opportunity to steer users toward the mobile web begins with a well executed site. Mobile websites are not simply carbon copies of a desktop site. They are fit for the small screen and should be as streamlined and easy to navigate as possible. Some web developers are even designing for mobile first, then expanding to desktop and tablet site designs. Ultimately, brands must decide which content is most important to visitors and use that to guide their mobile site design.

But for those that choose to create a mobile app, new innovations are continuously being developed to boost performance. Apple’s new search ads within the App Store, currently in Beta, help promote apps when users are more likely to engage. Search ads within the app store are designed to help users discover the app of a particular brand and ideally install it. Since users are already within the app store, the path-to-conversion is shorter than a display ad on a mobile website. Users do not need to take the trip from a mobile website to the app environment, which could potentially prove beneficial for a brand’s overall downloads.

Mobile for retailers

For retailers in particular, the benefits of mobile advertising are plentiful. It allows brands to reach consumers through multiple channels, with the ability to promote coupon offers, utilize beacon technology and develop social interactions into conversions.

Mobile couponing is widely used and expected to continue growing exponentially. KSM’s 2015 Holiday Shopping Forecast found that a whopping 81 percent of in-store shoppers and 85 percent of online shoppers planned to use coupons last season. And a study by Juniper Research predicts the amount of mobile coupon users will grow to more than 1 billion by 2019. Retailers are using short message service (SMS), multi-media messaging service (MMS) and near-field communication (NFC) to engage with this large population, pushing out coupons to encourage sales and foot traffic into relevant locations. However, this method of marketing does not come without backlash, as concerns about privacy have been voiced. For this reason, many retailers are opting for partnering with and creating their own mobile apps through which coupon offers are seen as more trusted and likely to be utilized by consumers. Nevertheless, mobile couponing via SMS, MMS and NFC still proves to be a growing marketing tactic.

Beacon technology is another way retailers are taking advantage of mobile. This proximity-based system utilizes Bluetooth low energy technology to interact with consumers in a retail establishment through their smartphone. When a shopper enters the radius set out by the beacon, they are pushed information such as ads, promotions and coupons. Not only do beacons distribute information, but they also retrieve non-personally-identifiable data from the consumers’ phones. Retailers can take advantage of this data by using it to understand everything from shopping habits to how mobile promotions are factoring in to their in-store journey. Even dwell time in-store and time spent in a certain area of the store can be identified. Many recent studies are finding that coupons offered via beacon technology have had much higher redemption rates than coupons delivered via other methods. Because of this, it is easy to see why retailers have been adopting this technology at a rapid rate.

Apart from pushing coupons and offers to encourage conversions, retailers are also able to use social media to drive purchases. As most social activity happens on mobile devices, it is becoming a huge player in the mobile marketing landscape. Traditionally, retailers used social as a means to engage with consumers and create awareness or brand favorability. While that is still the case, consumers can now make conversions directly from several social channels. For example, Instagram has a “Shop Now” feature that takes users to a landing page where they can purchase corresponding products. Similarly, Pinterest has “Buyable Pins” and Twitter has a “Buy” button, all of which allow for the same conversion. An increasing amount of brands are implementing this marketing tactic in order to offer yet another way to simplify and expedite the consumer’s journey to purchase.

Challenges to overcome

While the mobile space presents many opportunities, its state of rapid growth also means that unforeseen challenges are often presenting themselves. For one, not all brands and agencies understand how to properly design creative for the mobile experience. In the early stages, advertisers were able to adapt traditional desktop banners to fit mobile screens. While this was not ideal, the practice was widespread and thus, brands could rejoice in the fact that they were present in the mobile space. The problem with this mindset is that mobile devices differ greatly from desktop computers, and consumers don’t behave the same way when using the former. Some key best practices to getting the most out of mobile advertising include having a strong call-to-action (CTA), experimenting with the inner-functionality of smartphones and keeping mobile video and copy concise.

A CTA is important in order to catch the attention of users and encourage them to perform a desired action before they lose attention. Driving users to take action with a CTA such as “Buy Now,” “Learn More,” or “Go To Map” allows the advertiser to catch audiences’ attention instantaneously. Often, users are scrolling past or downloading lots of content on mobile, so messages must be clear, direct and useful if brands want to drive conversions. For example, an ad showing the nearest Starbucks with a button that leads to the phone’s map feature is a way to utilize GPS technology to help generate in-store traffic. Other mobile-specific creative opportunities include incorporating game-like experiences that encourage users to interact with an ad. The meal replacement shake SlimFast used a mobile unit which asked users to shake their device. In response, the ad then rotated through the different flavors the brand has to offer. By thinking outside of the box, they achieved not only an engagement rate that was twice the industry standard, but also gained valuable insight into which flavors their audience liked best.

Video creative on mobile can also be a powerful way to engage users, but as with copy, brief videos typically see the best results. A study conducted by Millward Brown and Tremor Video determined that millennials prefer shorter mobile videos, about 10 seconds in length, while older audiences gravitate more toward 30-second videos. The obvious lesson here is that depending on the audience, brands should experiment with ad length. Though this should be done within reason, ultimately setting 30 seconds as the maximum length of any mobile video. Video spots should also show the most relevant information within the first few seconds and include branding up front to ensure the audience can link the ad to the brand, even if they don’t complete the video.

While creative has a lot of moving parts to monitor, it means nothing if your ad isn’t seen by your key audiences. Cue viewability issues to the stage. This term refers to whether or not an ad is actually viewable to a given user. The Interactive Advertising Bureau, Mobile Marketing Association and the Media Rating Council have very recently produced guidelines in order to evaluate mobile web and mobile in-app viewability. However, these guidelines are in the interim and still leave some gray areas. Under current standards, mobile ads are said to be viewable if 50 percent of the ad is visible for at least two seconds, mimicking desktop viewability guidelines. Mobile video follows pretty much the same formula, though those two seconds must be continuous. Still, these standards don’t address differences in ad load times across mobile as well as how more advanced measurement tools might impact a device’s battery. In addition, technology used to measure viewability on desktop and mobile web cannot be used to measure in-app viewability. The latter is only able to be tracked if a software development kit is implemented. This poses a problem specifically for advertisers in the programmatic space, who may be running across hundreds of different apps. And with both positive user experience and ad viewability as top campaign objectives, it’s an obstacle that both advertisers and mobile ad networks alike are working feverishly to address.

So how do we work to fix the viewability problem? One potential way is to streamline the number of viewability partners in the space. When everyone uses different providers, the resulting data can be drastically different. Brian Fitzgerald, CEO of Evolve Media expressed his thoughts on the matter by recently telling AdExchanger, “If there is one unified viewability vendor of record, like Nielsen for TV, then there is an even playing field and all players can understand the rules of the game; we are all judged equally.” Once that’s achieved, the second step would be to begin treating viewability as a currency, not just a “nice to have.” If advertisers stopped buying impressions and started buying viewable impressions, pressure on publishers to ensure the latter metric is achieved would increase. And while the responsibility should not fall solely on publishers, brands and advertisers should keep these elements in mind when negotiating contacts.

Another challenge comes when attempting to measure success. Proving a positive return-on-investment from mobile ads can be tricky due to the complex mobile landscape that often goes beyond the technical knowledge of digital advertisers. If mobile advertising involved only mobile web browsers, tracking would be fairly simple. However, users are spending an increasing amount of time in apps, posing a major issue due to the complete lack of cookie information in these environments.

Traditionally, a user visits a website on desktop or mobile web, is shown a banner ad and is “cookied.” This occurs whether or not the user clicks on the ad, and the cookie remains on their device for a specific amount of time depending on the ad server. If the user returns to the site a week later and performs the desired action (e.g., purchases a product), that sale is attributed to the media and ROI can be proven. But what if the user has previously been to your website on their desktop or mobile device, is cookied, and then goes in-app to take a desired action? Because cookies don’t exist within apps, it can mean a loss of valuable conversions that help advertisers prove ROI.

Ad blocking is the last major challenge, and one that invokes uneasiness in the minds of advertisers and publishers alike. An estimated 419 million people worldwide are blocking ads on smartphones. Fortunately, ad blocking is not nearly as prevalent in the U.S. yet. But that still doesn’t change the fact that Apple’s recent release of iOS 9, which supports mobile ad blockers, helped boost ad-blocking apps to the top downloaded list. That said, the app statistics continue to show more international action than domestic. And an ad blocking study in KSM’s summer 2015 State of Media also found that a majority of U.S. consumers who are concerned enough about online ads to download a blocker have already done so, meaning adoption rates aren’t likely to skyrocket in the coming years. Furthermore, Android has implemented ad blocking software in the past with no substantial impact, so it’s predicted that iOS 9 will play out similarly.

Keys to the future of mobile

With mobile rapidly taking over the digital landscape, these topics are at the forefront of advertisers’ minds. However, as this industry always keeps one eye looking ahead, the future of mobile is as hot of a topic as the current state of the channel. Keeping up with the rise in mobile usage requires not only an update to the guidelines used to evaluate mobile performance metrics, but also constant advancement of the ad technology used to track these metrics.

On the horizon are advancements in location-targeting data to allow marketers to more easily connect mobile ad dollars to in-store traffic and sales. Even better for advertisers, the rise of mobile payment through platforms such as Apple Pay and Android Pay allow for additional data that can more easily translate into ROI. Mobile is even expanding beyond just phones via smartwatches, cars and a multitude of other devices. And virtual reality technology is expected to open doors to new creative formats and increased user experiences. In short, advertisers, brands, creative agencies and technologists definitely have their work cut out for them.

But with all of the aforementioned challenges comes one common goal: providers, brands and agencies need to work together to provide a quality online experience for mobile users. Adapting marketing and high-value content to the mobile space is a crucial step in improving the channel overall and preventing on-the-go consumers from avoiding or blocking ads altogether. An ever-growing amount of savvy marketers are implementing compelling and creative content in order to do just that, and the future is definitely moving in the right direction.