Digital Media Buzz > Mobile advertising: Personalizing content for a greater payoff

Mobile advertising: Personalizing content for a greater payoff

Next Page « 1 2 3 »

By Jon Donley

For many Americans, the first eye-catching exposure to the Apple iPhone was last year’s ubiquitous television ad showing how the add-on application Urbanspoon could help solve “the age-old dilemma: where to eat tonight.”

Dressed up as a slot machine — with rows for neighborhood, cuisine style and price range — the app targets your location, then with a shake of the device, spins out a suggestion for a restaurant. A click on the restaurant name takes you to details, powered by Urbanspoon’s web restaurant listing and user review site.

Such applications have caught the eye of Google, which has not only recently added behavioral targeting to its AdSense program, but is now in the second phase of a beta program allowing developers to build AdSense advertising spots directly into their mobile apps. Urbanspoon was one of a select test-pilot group that have finished the first phase, and developers are being invited to apply for the program for the wider beta. Advertisers are also being invited to apply for these choice locations.

Urbanspoon, one of iPhone’s Top 10 most popular downloads, could be a dream vehicle  for the right advertisers. And it will make money for both Google and the developers.

The promise of mobile: It’s personal
While behavioral marketing on mobile devices offers some of the same promises and challenges as targeted ads on traditional computers, the potential payoff for a mature model for mobile advertising is dramatically greater.

CITA, the Wireless Association, an international trade group, offered a snapshot of the growth of wireless service in the United States at the end of 2008:

• 86 million: # of subscribers to U.S. wireless providers in 1998
• 270 million: # of subscribers in 2008
• 2.2 trillion: # of wireless minutes in 2008
• 80%: Penetration of U.S. households in 2008
• 50-plus: Percentage of cell users texting regularly

In the near future, CITA predicts, more Americans will access the Internet through mobile devices than through PCs. We’re already attached to our cell phones, and as they take on more of the functionality of our regular computers, we’ll use them continuously.

In some countries, particularly in Asia, far more people use mobile devices to access the Internet, not only for web browsing but for paying bills and making everyday purchases  Worldwide, mobile phone users were estimated near 4 billion last year; four times the number of computer users.

Smart phones — those equipped with sophisticated, computer-like features, such as high-end Nokias, Blackberries, iPhones and the G1 Android — accounted for an estimated 13 percent of mobile sales in 2008, according to Juniper Research.

In his early 2009 report, “Next Generation Smartphones: Players, Opportunities & Forecasts 2008-2013,” Juniper senior analyst Andrew Kitson noted that the convergence of features of computers and smart phones are already paving the way for wider use. He’s predicting a 24-percent share of sales in five years.

Nokia doesn’t even call its top-line devices phones any more. They’re “mobile computers,” which among other things can enable wireless voice conversations.

But computers aren’t the only media converging in modern mobile devices. A fully enabled smart phone is a true multimedia platform, capable of browsing the web, performing searches, playing games, installing and operating applications, replacing MP3 players, shooting and watching videos and even mobile-enabled broadcast TV. Ubiquitous GPS chips can provide geographically customized service, as well as geo-targeted advertising.

Despite its infancy in universal standards and specialized content, mobile is the dream platform for advertisers and marketers. Much more than other forms of media, the mobile phone is intensely personal, and rarely missing from an owner’s side.

In its November 2007 white paper “Mobile Advertising in a .mobi World” the MAG Mobile Advertising Task Force states that mobile devices “offer the potential for both the greatest choice and greatest convenience in media consumption.”

More to the point, in an interview with Advertising Age, Google mobile product manager Sumit Agarwal described mobile devices as the perfect tool for delivering ads: “It goes beyond any traditional advertising and allows it to move from intrusive to a delightful, value-added experience.”

And shortly after Apple’s announcement of the iPhone, Google CEO, Eric Schmidt, said at the 2007 All Things Digital conference: “What’s interesting about the ads in the mobile phone is that they are twice as profitable or more than the non-mobile phone ads because they’re more personal.”

And Google is claiming its turf. The search and advertising giant launched its Android operating system with the launch of T-Mobile’s G1 smartphone (THC Dream) in October 2008, followed by swift moves into the mobile advertising arena — both in behavioral targeting and mobile apps. And despite the relatively short history of mobile advertising, marketers are taking note of higher responses than more traditional Internet ads. “Research has shown that 66 percent of consumers recall mobile marketing campaigns, and 36 percent are likely to buy product related to the campaign,” says Millennial Media, a mobile advertising network.

Click-through rates are also reported to be dramatically higher on mobile ads. Mobile analytics company Bango tells potential mobile advertisers they can expect click-through rates of 2-8 percent, while a more normal click-through rate for a banner ad might run from 0.5 percent to a very successful 2 percent.

The merging of the Google AdSense/AdWords program into targeted mobile ads mirrors what other big players are doing. Yahoo!, while falling behind in the online search world, has so far held its own on mobile devices, powering its own targeted products.

Another factor in the personalization of the mobile experience is economic. Much has been made of the attitude of Internet users – accurate or not — that having paid for their Internet connection, they deserve free content.

But mobile users have a much better argument. Much more than the web in general, users pay a premium price for their connectivity. Depending on plans, every text message may cost the consumer, and time and bandwidth may add up to extra bills. This is more like the old AOL experience, where connectivity was clocked and charged. Unlike the computer-connected Internet user, the mobile user may face direct pocketbook issues, rather than unlimited connectivity. An unlimited data account can easily cost double the price of an unlimited ultra high-speed home Internet account.

This puts more of a burden on advertisers to deliver value.

Next Page « 1 2 3 »