How mobile advertising has continuously reinvented itself
If there are two underlying features that have helped mobile immensely, it has to be the power of video and location
I can safely bet that at least 5 out of 10 readers are reading this article on a mobile device. Could you have imagined this five years ago, let alone 10? The pace at which users have adapted to the smartphone is unprecedented, overtaking the transition periods to other media like radio, newspapers and personal computing.
According to eMarketer, India is expected to have more than 810 million mobile phones by 2019, compared with 960 million TV viewers. The stark difference between the two is, one is an extremely personal device and the other is a household device shared by multiple people. This makes mobile a uniquely personal way to build connections with consumers. Advertisers who spend millions are obviously looking to reach every user, and mobile is shaping up to be the most effective channel for them to spend on.
Data supports this digital trend. From a meagre $20 billion of total media ad spending in 2013, mobile ad spend is expected to reach a whopping $195 billion by 2019, according to data from eMarketer. Obviously, the days of the old sticky banner are far behind us. Innovative ad formats across videos, carousels and native ads are evolving every day to make users forget that these advertisements used to appear on hoardings years ago.
Mobile’s growth has been phenomenal and advertising has evolved to satiate the increasing demands of users. Take banner ads, for example. When we began our journey in mobile, banner ads were the be-all and end-all of mobile advertising. It assured viewership (mostly because it was force-fitted) and the artwork, when good enough, guaranteed that users would view the ad, if not click on the banner. But banner ads were a fad. When the users began to realize that the ad took them away from the very reason they were on the app/browser, the efficacy of the ad began to drop.
If there are two underlying features that have helped mobile immensely, it has to be the power of video and location. Ad spends on mobile videos are going to double, if not triple. In a market where Internet penetration is less than 20% and data speeds are slow, these numbers are indicative of how video will shape up in the coming years. Video consumption on mobile is witnessing a massive spike, be it through video-only firms like YouTube and Vine, social networks like Facebook and Twitter or independent video platforms across Hotstar and ErosNow, to name a few. With many of them following a free-to-watch model, advertising is expected to grow as well. Popular social networks and ad networks have developed the capability to detect screen sizes and network quality, delivering videos that would work best to suit each user. Besides delivering six times the engagement as banners, video ads help advertisers acquire users with higher Lifetime Value, upwards of 1.5 times that of banner ads, as seen on the InMobi network.
As a device that is used on-the go, the power of location can be truly harnessed through mobile advertising. Customizing messages to users based on where they are—schools, malls, shops, or on the road—helps in increasing ad effectiveness. With an increase of hyperlocal apps and services, location has become an essential targeting option to ensure that stale ads aren’t showcased to users. More marketers are interested to know how deeply they can target users based on their location. If I can serve an ad for a coffee with a discount coupon when the user is about a kilometre away from a particular coffee outlet, the probability of converting the customer is much higher. We’re also constantly working on how to improve the experience and customize ads for users based on their location.
With the advent of programmatic, mobile advertising is going to get faster, better and, importantly, automated. Ad spends on programmatic are estimated to jump 10x to over $20 billion next year, according to data from eMarketer. Unsurprisingly, around 70% of this spend is going to be on mobile. The programmatic space is particularly interesting because it has plenty of room for innovation. Companies that can harness the power of data analytics will stand out from the rest.
Besides these noticeable changes, a lot of changes in the app world such as deep-linking, notification mechanisms or data inference techniques to crunch real-time data are changing the world of mobile advertising. Given the nature of the device and possible innovations, advertising on mobile is definitely poised to make some more interesting turns. As brands, developers and advertisers seek to communicate and engage with users on a personal level, mobile is set to make this quest for relevant and memorable advertising easier.
The author is co-founder and chief revenue officer at InMobi.