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How Mobile Growth will Fuel Advertising for Years

The Business Insider put together a great presentation about where we were in terms of mobile growth world wide and smart phone penetration globally.

It had some amazing insights which are summarized here, but I also wanted to provide a perspective on how this may affect online advertising.

  • Currently 835 million smartphone users vs 5.6 billion feature phone users. (Keep in mind the number of phones is almost the same as the number of people in the world!)
  • Smartphone sales exceeded PC sales.
  • About 46% of US mobile users have a smart phone now.  So we are only half way through the transition to everyone having a smart phone.
  • SmartPhone Penetration is highest amongst the 18-34 group with income above 75k.  Soon the trend will be everyone.
  • Android and iOS are dominant. But developers prefer iOS due to Androids handset fragmentation
  • Mobile ad revenue is estimated at $800 million currently. Google is dominant taking 64% of the market share.
  • Only 1% of ad spending goes to mobile currently, however the consumer spends 23% of their available time on a mobile device.
  • Apps can generate a ton of revenue on mobile platforms and spread very quickly. However, overall share of mind is limited. Each new app may take user time away from another app.

What does all of this mean for the future of online advertising?

There are a few things not mentioned in the presentation which may help us understand how this will affect online advertising.
When people are online at their computers, or watching TV, they always have their mobile device with them.
Most advertisers already realize this and have started to launch integrated ad campaigns which ask you to complete an action on your mobile phone while watching a show. Twitter and TV integration is quite widespread now, you will notice most shows now have hashtags on the screen during the show.
The possibilities of how these two industries will be integrated is quite limitless. For general marketing purposes I think you will start to see overall ad budgets increase overall. The whole advertising ecosystem must be looked at in a holistic manner.  Often times TV ads actually boost the performance of online ads since they ad validity to the company advertising. EG – If they can afford to buy a TV ad they must be a real company and somewhat trustworthy.
On slide 27 of the Future of Mobile deck, you can see that TV still gets the lion share of ad dollars. I don’t see this changing in the near future. Especially as TVs become more connected. Once Apple or Android release a TV/Computer hybrid you will see a massive change in your TV experience. Imagine having a prime time show up and a browser window up on the same screen, and a mobile device on hand.  Also, it is highly likely that your phone becomes your remote. Not only is it in the room, it will actually be integral to your viewing experience.
Consumers will have incredibly short attention spans since they are trying to pay attention to multiple devices at the same time.
What we have established here is that the new electronic mediums play nice with technologies like TV and Radio.

Does Print Media have a future?

In my opinion, no. Print and digital devices are redundant. Even as much as I like holding a physical book or newspaper, the ability to deliver content faster and cheaper online will win.
Print excluding things like billboards (there is no replacement for those yet) takes a huge amount of ad spend but yields low results. The postal system is a key indicator of this industry collapsing. People are able to get their NY Times on the iPad now. Why kill a tree for something you are going to read for 5 mins?

Will the desktop still matter?

In the short term (2-5 years) people will still use desktops since they are important in work environments and portable devices are simply not big enough or strong enough for an 8 hour day.
Web based ads served to desktops and laptops will be important but the level of targeting will be antiquated compared to things we will be doing in mobile. For decades people have been able to pick demographics to target, but micro-targeting based on demographic, time, location, who you are with, personal influence, etc… will increase click through rates and overall engagement.
Ad networks will take that and charge premium rates due to the high level of engagement. Expect mobile ad rates to go up but not skyrocket. There is a ton of inventory out there. If supply was limited it would make the rates skyrocket, but inventory is outpacing advertiser interest at the moment.

As a media planner where should I start buying?

If you are an online media planner, it is important to learn how to buy on TV. I can’t stress this enough. The online world and TV will merge. Not knowing how to buy on both platforms will hurt your career and your clients.

Secondly, start setting up test buys on mobile. Inventory is cheap now, you can afford to make mistakes. Focus on what happens from an operations perspective to make sure the customer’s experience is a high quality, and quick experience with your company. Focusing on your short term eCPM or eCPA will not give you the learnings you should be focusing on.

The key to a long term strategy is really designing a pleasurable customer experience on a small screen or via voice.  That is what makes people buy, come back, and tell their friends.  Creating an experience that mimics your web checkout or form flow will kill your campaign. No one wants to fill out 15-20 fields of info on a tiny screen. Time is crucial. Most people will have various push notifications, text messages, new emails and other distractions coming through during your checkout process. Making sure your flow is quick is not just important it is the cornerstone of your mobile strategy.

Sometimes as a media planner, it is important to know where not to buy. It is time to move away from print. Go up to any hipster and ask them the last time they bought a magazine or a newspaper. Most likely they will spend their $3 on a fair trade cup of coffee instead of a magazine they can get online for free.   Print media has no reliable metrics. With so many tools available these days, why invest in something that can’t tell you if it was the right choice or not?

Mobile is just getting started. Start now, learn while it is cheap. It is our inevitable future.

SXSW Thoughts 2012

SXSW is still going on in Austin at the moment but the EDU and Interactive conferences are officially done.

How was SXSW? Massive. The conference literally is a city by itself. Multiple venues, 20-30 sessions per hour and thousands of parties. Over 250k people will come to Austin for SXSW this year. That is over 30% of the normal population of Austin.

I thought it might be good to summarize what SXSW Interactive really talked about.

Major outcomes/themes of SXSW 2012.

  • http://rehabinflorida.net/south-florida-rehabilitation-heals-heart/ Healthcare is the new social. The government is eager to clean the mess we call our healthcare system. The open health data initiative (http://www.data.gov/health) is key to this. Lots of money will flow to this tech sector since there are healthcare companies with deep pockets to buy it.  Simple projects like iTriage.com provide massive value to companies like Aetna.
  • source link Education needs reform. In the short term the attention will flow to social teaching platforms but there is little money to be made in this sector without the help of student loans. I suspect reform in this sector will be hampered by revenue model issues. The tech folks that focus on creating solutions for the K-12 public school sector will see the most traction in the near term.
  • http://mountainhighbeekeepers.org/dead-out/ Social is a bubble. Very few if any social apps or sites have any revenue. It is inevitable to have these sites collapse unless they embrace something like advertising. Most of the apps at the show were features of another site like Facebook. Few if any had original technology that didn’t depend on the Twitter API, Google Maps API or Facebook API.
  • The 2012 election will be decided on social. Focus on transparency, fact checking and online donations will drive the new candidate.
  • TV is not going anywhere.  Former Vice President Al Gore said no current technology rivals the richness of TV in terms of content. The goal is not to replace TV but converge with it. TV based social apps will drive much higher advertising rates in the near future.
  • Google may not be the winner in social but they still command a large amount of your daily internet time. Fragmentation between Google+ and Facebook is not helping the consumer.
  • Android still doesn’t get any love. Developers are still choosing to launch apps on iOS first. This was really shocking to see considering the Android phone penetration. Nokia and Blackberry have been thrown to the side of the road. They are no longer relevant.
  • Mobile Marketing is still in its infancy. Mobile ad formats are inadequate and there is a large lack of understanding of how mobile advertising currently works.
  • Near Field Payments or NFCwill become mainstream at the end of this year. Companies like ISIS and Google Wallet will lead the way. This will be a massive change to the US Economy over the next 18-24 months. If IPhone 5 has NFC in it, it will solidify the concept and push it mainstream. Almost all Android phones will have it by years end.
  • Privacy will be a renewed movement. People’s social profiles have gone out of control. Many people expressed concerns about not sharing pics of kids and family on Facebook anymore. Newer more secure platforms will start to gain traction. Try out burst.it for example. Apps like Highlight are overly socia in my opinion.
  • Portals are returning. Sites like Pinterest.com, Pixable.com etc are just a re-skinned form of Yahoo.com. Curation of the internet is necessary. None of these sites have any way of automatically filtering for you, they are all socially sourced. People are throwing tons of money at these ideas. Welcome to 1999 again.
  • US interactive business models don’t always translate to other economies. But the bigger ideas are easy to copy and implement locally. Think Ren Ren, Yandex, Baidu etc.
  • eBooks are coming of age. The iPad, Kindle and Nook are going to create a whole new type of book, newspaper and magazine experience that really shows what HTML 5 can do.
  • Event Planning apps were a big deal. Apps like Schemer and Glomper made some traction.
  • Apps became creepy. Apps like Ban.jo and Highlight know, display and share everything about you.

Overall, SXSW was a really enjoyable event. It is hard to digest but if you pick off the things that interest you the most, you can really get a lot out of it. The US economy is for a massive change this year.  Keys to having any of these predictions/statements come true will be dependent on the 2012 Presidential election.

 

Why Won’t TV Die?

A certain group of people have been making the move to cut off their cable TV subscriptions since they feel they can get all their relevant content online.

This may be true in some cases.

However, if you think of how the interent is structured and created, one very important thing has not really taken root yet.

Group Creativity.

We have social, we have communication up the wazoo but we don’t have a really good way of creating high quality entertainment together. TV which has been around for decades is the result of high quality programming which is put together but a professional team. It involves scores of people from writers, sound editors, camera crew, producers etc.

All of those resources are available online but being virtually connected has not really allowed us to work on a project with a unified vision together.

One of the reasons this hasn’t happened is because the internet doesn’t really have a hierarchy or titles. People are all the same and no one is able to take a lead and direct others. There is no producer nor director.

Something like #Occupy Wall Street will continue to be a nuisance untile a leader with a unified message appears. That will focus the attention, creativity and power of that group in one place. Call it laser theory. Once the energy is concentrated it can be used to impact others. Without the concentration the energy is still there but it has less of an impact and essentially goes wasted in the system.

I am looking forward to the day when an online platform helps establish a real team, with real deadlines, a singular mission, and a high quality end product. That is when we will see the internet kill of TV. Until then, I think TV is around for the long haul. The quality is just unsurpassed by anything else online at the moment.

Imagine if there was a Google of only original content? Soon hopefully.