Is This Really The "Year of the Mobile"?
Consider this – across a global population of 7 billion, there are close to 5.5 billion mobile subscriptions worldwide! There are more mobile phones than television sets. There are more mobile phone subscribers than toothbrushes. I remember a Windows phone video commercial that took a fun dig at how the mobile phone has infiltrated our lives so deeply that we are busy interacting with it when we are peeing, walking down the matrimonial aisle, in the operating theatre, and even in the throes of sexual passion.
In Singapore, with a population of over 5.2 million, mobile phone penetration registers well over 150%. Of this, over 70% are smartphones, with both iPhone and Android devices dominating. In the context of advertising monetistion, many industry soothsayers have predicted that 2012 will be the “Year of the Mobile”.
Media publishers the world over have taken deliberate inroads into extending their content onto multiple devices – initially it was only the pc, now it has seamlessly gone across to the tablet and the smartphone. Many publishers have institutionalisd the counting of content subscriptions across both traditional and new media platforms. Ditto for readership. News from a branded “publication” of choice is not necessarily consumed off one source anymore. I, for one, start the day by reading the print edition of The Straits Times at home. What I cannot finish, I pick it up on the run with its breaking news on mobile. And when I get into the office, I take my iPad up to the cafeteria to continue where I left off.
Millions and millions of apps currently reside in congested mega repositories known as app stores – Apple calls it by this name, Google has its Android Market, and for Nokia, the Ovi store, etc. Herein lies an expanse of extended and enabled features for handset owners to have fun engaging, obtain value from, and enrich their lives with.
In light of this, the key question on the minds of media practitioners is “How can we best monetize across this platform”? Although the growth of mobile is exponential, the growth of mobile advertising revenues pale very much in comparison. A direct correlation between these two streams is nonexistent. Mobile monetisation is currently but a fraction of its projected potential.
Having said this, worldwide mobile advertising revenue of $3.5 billion last year is already more than 100% up from the year before. Gartner Inc has predicted that this will reach $20.6 billion by 2015, but qualified that not all types of advertising will generate the same opportunity. They envisage that search and maps will deliver the highest revenue, while video/audio ads will see the fastest growth. Stephanie Baghdassarian, research director at Gartner commented that “mobile advertising budgets are set to increase tremendously across the various categories and regions, growing from 0.5 percent of the total advertising budget in 2010 to over 4 percent in 2015.” Her opinion is that mobile search, which includes paid positioning on maps and various forms of augmented reality, all of which can be informed by location, will spearhead mobile ad spending. Targeted and contextual mobile applications have also been touted as intrinsic scenarios that will actively fuel the growth of mobile.
Ad networks from major players such as Google’s AdMob, Apple’s iAds and more are currently overwhelming advertisers. Industry experts are campaigning for a more consolidated environment so as to accord market clarity. It is envisaged that the giant players will eat up the smaller networks. Prolific mergers and acquisitions will likely be the order of the day! The way I envision how quickly things will unfold can be expressed in a statement which I use all too often – “Things are gonna happen and they’re gonna happen real fast!”
Selling ad space through competitive auction is a phenomenon that pundits are betting on to pick up steam. The mobile industry calls this RTB or real-time bidding. According to Jim Payne, CEO of MoPub, a mobile advertising platform, “Real-time bidding is a relatively new ad technology that gives advertisers more control and ability to target their audience.” He goes on to say that “over the past year, RTB has grown from zero to over half of the revenue flowing through Google’s Content Network. Why? Because advertisers prefer knowing what they are buying before they buy it, and they like to set their own price in a competitive auction, rather than buying through complicated offline forms. In mobile, RTB is just becoming possible.” It is also predicted that more and more publishers will establish in-house mobile ad operations. The Economist, for one, has already in place a full-fledged ad operations team focused just on mobile.
In the context of Singapore, 2012 will be the year that we bury the feature phone. This will come to pass as cheaper smartphones are introduced into the marketplace. This should shift the weightage of digital advertising expenditures across to mobile as more and more advertisers experiment with interactive mechanisms on-the-go. The mobile or what many call the “first screen” will play a highly significant role in enabling the user to experience various “layers” of interactive content centered on the topic in question. Rich media, which has been a luxury of sorts for the longest time, will start to become main-stream as it offers the consumer a more engaging encounter with brands and the products that are associated with them. It will no more be a niche offering but one which advertisers cannot afford to neglect or turn away from.
For those of you who are of the opinion that advertising on the web is synonymous with advertising on mobile, I hate to tell you this - you are absolutely wrong. People view ads on their laptops differently from how they view them on their smartphones. When you look at an ad on your desktop, you are likely to be in an office or home environment, and have the luxury of time to take it all in. As for mobile ads, they are mostly viewed on the fly! And not only this, the mobile user always wants to get to the content as quickly as possible - advertisements are more often viewed as unwanted distractions. Mobile ads need to work all that harder in order to be noticed.
Two other trends have been predicted to gain traction this year. The first of these is the increased use of geo-location services targeted at driving greater patronage to retail, F&B and linked outlets within the vicinity and scope of the smartphone user. With this, more and more consumers will become reliant on the offers available where they are located. This will in turn influence their choices and decisions. The second trend will be the increased use of mobile payments. The success of Google wallet, together with Near Field Communication capabilities included as default in new models of smartphones, will close the loop for M-commerce to take off in a significant way.
Industry experts are expecting Facebook to make a major move on mobile advertising this year. With such a large base of users, any bit of a ramp up across this business front will have a big impact on the digital industry as a whole. But the way I see it, instead of waiting for the giant to sneeze before contemplating how to follow suit, media owners and other players should be actively developing their own suite of compelling mobile apps and platforms to draw in the advertising dollar.
So as not always having to re-invent the wheel every time a new idea is being asked for, content owners should take a closer look at what mobile subscribers want in order to come up with the right products. Many a time, these so-called new products are created through the re-purposing of existing content. Many local and hyper-local players tend to spend too much time looking over their shoulders to see what the big brands like Google and Yahoo are doing. It is my belief that the mobile space is large enough for others to share in the pie.
The boom in both tablets and smartphones expected this year will change the way personal computing is done. Not that we are short of features in the gadgets we use these days, but there will yet again be more bells and whistles built into the new roll-outs. Coupling this with thousands of apps that are constantly being uploaded into the respective stores makes for an interesting scenario up ahead. So put on your seatbelts everyone, for 2012 is going to be one helluva’ ride!
by Geoff Tan
Geoff Tan is the Senior Vice President & Head, Strategic Marketing at the Singapore Press Holdings.
Contributed by Marketing Institute of Singapore