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Isn’t it funny how we’ve been hearing that ‘This Is The Year For Mobile’ every year since, oh, about 1863?

This seems to have been driven by hugely bullish forecasts from various analysts over the past decade, and the desire among investors to get this message out to market in order to Make Things Happen. Yet mobile marketing has never been the big story, for any number of reasons.

While marketers like the theory of mobile, the practical opportunity to reach out to consumers via their mobile phones is fraught with complexity. And the fact remains that there doesn’t seem to be too much happening out there, despite the fact that many toes have been temporarily dipped in the water.

But it will happen! Sooner or later, mobile marketing will officially take off. After all, everybody’s got one, right? Right? I remain desperately unconvinced. Unless local search takes off on the mobile platform I think this could be a squib waiting to get wet.

Here are my ten reasons why I think mobile advertising is a non-starter:

1. User Experience Is Everything
Forget about advertiser demand (or the lack of it) for the moment and focus on how people actually use their mobile phones. It tends to be a task-driven affair (do something) or a time-filler (find something to do). People use their phones here and there, in bite-sized chunks. What better way of annoying these folk by filling up 30% of their screen with an ad, which might take 40 seconds to download? Directories, classifieds and paid search might ultimately be the saving grace for mobile advertisers, but only if these mobile services work well to begin with, and achieve high levels of usage.

2. But It Doesn’t Have To Be Intrusive!
Yeah right, like web ads don’t have to be interruptive. It’s just that they somehow still are, for various reasons (laziness and a lack of common sense among media buyers, lack of willingness to spend extra on targeting among advertisers, and lack of technology implementation among publishers). Are we to believe that mobile advertising will be less intrusive than web ads like interstitials and pop-ups? A banner on a mobile is going to take up more screen estate than its web cousin. Which is comparatively more intrusive...

3. Testing ! Testing! On 7.2m Tiny Screens
Now, let’s look at the obvious limitations of mobile devices. The handsets are small, the screens are small, and there are about 7.2m* different devices on the market at any given time (*unnecessary exaggeration). With internet ads you typically test them on various web browsers to make sure they work. In the future this may be viewed as a near-painless experience when compared with the testing efforts required to ensure compatibility across those 7.2m** mobile devices (7.2m = ‘several hundred’).

4. 24/7 Reach
As a platform, mobile seems perfect, since people carry them around everywhere. Advertisers can reach out to these unwitting consumers at any time of the day, in theory. Ah yes, but how many SMS marketing messages do you get these days? And since people aren’t always cruising WAP sites, there’s only a limited appeal there. So although the devices have spread like wildfire, what’s important here is adding some kind of value to the user, and avoiding interruptive marketing at all costs.

5. Laser Guided Targeting
Network operators know a little bit about mobile users, which would allow targeting based on location and demographics, and maybe even interests (depending on how well the networks observe and make sense of user behaviour). The future of advertising is all about targeting, but since the network operators own the data they’ll no doubt command a hefty premium for targeting (see the next point). How easily third parties will be able to operate mobile ad networks remains to be seen, but I suspect it will follow the usual pattern of pain for a chosen few.

6. Swinish Networks
The business models adopted by UK mobile phone networks are a result of their activities in the late 1990s, when they coughed up around £20bn for 3G licences. God knows what they’ve been spending since, on infrastructure and the wholesale luring of low-value consumers with handset subsidies and price wars, but will they ever get a return on that investment? Maybe they will. Maybe they’re looking to ‘do a Google’ and pin on some kind of ad model to hoover up some new revenues? Might work, I guess. The point is, networks are notoriously difficult to work with, and their love of the Walled Garden model is highly sucky, if understandable from a revenue - if not a usage / critical mass - perspective. Remember that you may need to pay fees to various parties involved in your campaign – mobile networks, technology providers, content providers and ad networks will all potentially fight for a share of your ad spend.

7. Measurability Sucks
One of the great marketing hypocrisies in recent times was the demand for measurability to the Nth degree for internet ads, despite the fact that it is far easier to track response via the web compared with the black boxes of TV, print and radio. How can you accurately determine where to spend your ad budget if you can’t see what works? Well, the bad news with mobile is that it isn’t as measurable as the web. For example, you can’t serve cookies via mobile. I’m sure this is an area that will improve in time, but right now it is difficult to accurate track mobile ad campaigns. You are too reliant on the respondent to hand over data, and that doesn’t always happen.

8. ‘A Key Part Of The Marketing Mix’
How often do you hear this phrase? It is in fact partly accurate – mobile should play a key part in your business, but should the medium be used for marketing? Maybe to existing customers, but I don’t see mobile as the best platform for customer acquisition. Mobiles work well as a response mechanism, which is why we see shortcodes on billboard and press ads. Maybe it is better to continue to use the mobile channel in this capacity, as a fast and easy – if limited - communication device? Or to focus on customer retention and driving repeat business? This, for me, is the real opportunity in mobile.

9. What Works Best Works Best
One of the unknown unknowns here is that while mobile banner ads may work, they may not work as well as online skyscrapers. Or newspaper classifieds. Or TV ads. Or paid search ads, for that matter. Since mobile is a new channel for advertisers it will need to fight for its slice of the ad budget, just like online has been doing over the past five years or so. Even now, internet ad spend is vastly underrepresented when compared with media usage, and – I bet – return on investment. The only reason it has grown significantly is that most online ad spend is pumped into the likes of Google Adwords, which works well, and which – unlike mobile - can be accurately measured. Without paid search, internet ad spend in 2007 could be a non-event. So how easy will it be for ‘mobile’ to successfully lure a chunk of the marketing budget?

10. There’s Something Much Better On The Horizon
There really is. It is an extension of a passive advertising medium that accounts for roughly half of all advertising spend. Yes, it is TV, but it is TV with a twist. Yup, you guessed: IPTV. This will allow highly targeted, highly measurable ads, of the sort that everybody is familiar with. It will surely be the saving grace of the ad industry when it hits the mass market, and specifically when people start hooking up their TV sets to the internet (rather than watching TV on their laptops, which isn’t really the idea…). We will see segmented ads that are better targeted to consumer groups. After all, why show Mr X a female-orientated ad if he lives in an all-male household? Critical mass is still a few years away, but I think IPTV - rather than mobile - is the Holy Grail for the likes of Google. And if that proves accurate, it will tell you all you need to know about the comparative merits of these two mediums.

So, is this harsh, fair, or valid? I think that depends on where you’re sitting. Do I think businesses should use mobile? Yes, but not if the focus is on customer acquisition…

Chris Lake

Published 15 March, 2007 by Chris Lake

Chris Lake is CEO at EmpiricalProof, and former Director of Content at Econsultancy. Follow him on Twitter, Google+ or connect via Linkedin.

582 more posts from this author

Comments (12)

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Bill

Much of what you have said is valid. All of these are great topics for further study, but as usual short treatment and sweeping statements can't tell the whole story. For instance, paid search should be very effective in reaching mobile users in the "finding things" mode. Similarly, while anyone is in the mode of shopping for a car, car shopping is a front of mind activity as well as an entertainment. Car ads on mobile are perfect for that audience while they are "finding something to do". Customer acquisition on mobile may not be appropriate for flooring floggers, but it is right on for pizza purveyors.
As with any channel, its power is not right for every situation, but used properly mobile has been very powerful, and its power as well as appropriate applications continue to expand.

over 9 years ago

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LiveAdvertiser.com

Your writing on this subject is absolutely intuitive and forward looking however is focussed on targeted advertising which leads to quality as apposed to quantity.

While you can retain a higher percentage via targeting or "quality" compared to the number of people being reached you will pay a much higher price. On the flip side you can attain, theoretically, a much higher TOTAL SALES when you play "the numbers game" by advertising to the masses as apposed to the targeted.

This is a difference between advertising and marketing.

When you have the ability to reach over 200 million mobile users in the United States alone... numbers always win... especially when the "technology" IS already here with such things as bulk email software coupled with a large database such as the one at www.HugeDatabase.com

I think we will soon be configuring filters for sms messages as we do with email.

Virtually,
David S.

over 9 years ago

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Jon Carney, Marvellous

You're barking up the wrong tree. Mobile marketing is a pull medium, not push. It's highly interactive, multi media, and is the hottest place for brand innovation (in the hands of the right creative agency).

The problem with mobile marketing currently is many of the people who work in it are techies or telco people with no creative or marketing skills.

We have made mobile a channel that our clients include in their plans going forward, through brand innovation and business roi.

over 9 years ago

Wyndham Lewis

Wyndham Lewis, Head of Business Development at Harvest Digital

The piece establishes that you don't think that mobile marketing is viable and then you say that companies should use mobile for everything but customer acquisition. So what is it, mobile is or isn't a viable channel for marketing purposes?

The term mobile marketing needs better definition. You are right that the medium will not work if companies just send text and mms messages to opted in databases. As the previous respondent said if you can engage people into interacting with you via their mobile i.e. pull then the medium is incredibly valuable. Just look at what Orange have acheived with Orange Wednesday's a great proposition, very simply executed. This overcomes so many of your reasons for why mobile marketing won't work e.g:
- User experience, ok its not flashy but it is simple and easy
- Technological limitations - it just uses SMS
- Not intrusive because its a pull medium and you engage when you want to
Go to a cinema on a wednesday night and talk to people and you will find so many people who switched to Orange just so they could use the service.

Mobile is going to definitely be part of the mix. It is just up to people to think through how it will benefit customers and support companies marketing and business objectives rather than replicating the way things are done within other marketing mediums.

over 9 years ago

Chris Lake

Chris Lake, CEO at Empirical Proof

Thanks for your comments. Part of the reason for writing this was to see if I'm wrong in my view, which is pretty much limited to mobile 'advertising'...

Bill - You're right: short treatment and sweeping statements can't tell the whole story, guilty as charged! Agree with your points - horses for courses.

Giovanni - I agree that mobile works best as a pull medium - that's not contested. But Nokia has just launched a mobile ad network, so how is that going to work from a push/pull perspective? Presumably we'll see a lot of push activity in the mobile *advertising* space, since that tends to be how advertising works, right? I fear I have used the term 'mobile marketing' in my opening paragraphs when really I should have stuck with 'mobile advertising'.

Wyndham - The focus here is about advertising to cold prospects via the mobile channel, rather than marketing via mobiles to existing customers (see point 8). I hear your point about Orange Wednesdays, which worked really well, but as a non-Orange mobile user they had to advertise this to me in the cinema, on the TV and via print. Again, in point 8 I say that mobiles are great for capturing response.

over 9 years ago

Nick Wiggin

Nick Wiggin, Head of Advertising Strategy & Partnerships at Ericsson

The title to your piece irritated me so much I felt compelled to wade through the waffle of your ten points. I agree with Bill that sweeping statements are dangerous and I fear that the credibility of your piece is lost by doing ss. Nevertheless the title irked me so much I had to read, consequently I'll throw a few responses your way with regards your bullet points to back up my observation.

1. User Experience is Everything
Mobile Advertising is not just about mobile internet banners. The point here is that successful mobile advertising will be opted-in and actively requested, thus providing the consumer with a valuable experience.
2. But it doesn't have to be intrusive
Mobile advertising has the power to be more targeted and thus deliver relevant content thus not intrusive. Blue chip brands will only allow brand messages to be delievered to consumers who feel that they enhance their brand experience by engaging with this content. The rest is SPAM and not mobile advertising. It will have a limited impact as push marketing via the mobile incurs a cost to provider
3. Testing! Testing! On 7.2m Tiny Screens
Just talk to film producers from the Sundance Film festival, or Warner, or EMI.
4. 24/7 Reach
Your point here is valid, though I would argue that it is a point in favour of mobile advertising. The point is about providing value and that is the challenge to the creative ad industry. It's well noted that the penetration of smart phones is low, but it's growing.
5. Laser Guided Targeting
Another reason why mobile advertising will be attractive to advertisers. Operators are incentivised to make this happen, watch this space, it will be painful for pioneers but it will happen
(two points in a row that conflict with your ten reason 'non-starter' rationale)
6. Swinish Networks
Times are changing, read the newspaper
7. Measurability sucks
Rubbish! mobile is the most measurable channel, it's more measurable than the internet because it has a location based element
8. A Key Part of the Marketing Mix
Traditional Media impacts are in decline, media buyers need to be innovative. Mobile acts as a link, a 'media glue' .. look at my website...
9. What works best works best
This is a well made point, I agree that mobile is potentially eroding internet spend in some agencies rather than growing in its own right, this is typical of an emerging media channel. Not a reason why mobile is a non-starter
10.There's something better on the horizon
I don't agree with the theory that IPTV is the next big thing, people don't have as much time to sit watching TV as they used to. TV Ad impacts are in decline. more targetted solutions my slow decline but in the future advertisers will need to think more cleverly around social networking and personalisation of content than just IPTV.

Yeah harsh.
Nick

over 9 years ago

Chris Lake

Chris Lake, CEO at Empirical Proof

Hello Nick,

Thrilled to have irritated you : )

The 'sweeping statement' was the deliberately / ridiculously provocative headline, not sure where else I have used them?

Here's some more waffle in response to a few of your points...

1 - "Opted-in, actively requested advertising"? Are you kidding? I don't opt into any other form of advertising, so why would I via mobile? This is ridiculous. If I've opted in then we have a relationship of sorts, and that moves the goalposts.

2 - 'Has the power'. So does the internet, yet we still see big brands using all sorts of rubbish formats to demand attention.

4 + 5 - You've found me out! Dang.

6 - What newspaper? You want me to pat 3 on the back for finally breaking down the walls of its garden?

7 - Cookies. Am I right or wrong? Location is great, no question, but is it the most important element of 'measurability'? So you're saying it is easy to track mobile ad campaigns?

10 - We disagree on this. I think IPTV could be the single biggest development in the media industry since the launch of the commercial internet. Just look at the size of TV ad budgets compared with other channels... and it will be about social networking and about personalisation (or at least segmentation).

over 9 years ago

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Kenton Ward (The Online Department)

Hi Chris

Like the article, I suspect there is an element of 'devils advocate' in here!

You assume that advertising can only be shown to a user who has consciously gone 'online' to use their handsets browser - the holy grail for mobile marketing will be user 'push' based location triggered advertising or search results. Google have already started to supply mobile maps, phones have an intrinsic positioning system already and increasingly have GPS.

It is not going to be long before a phone screensaver configured to give local information and services provides a useful tool for consumers and a stunningly relevant advertising platform.

As for IPTV: of course it will be massive and probably available on a phone near you even now!

almost 9 years ago

Chris Lake

Chris Lake, CEO at Empirical Proof

Hi Kenton,

Yes, you got it - capital D and A : )

I approached this from the perspective of 'advertising', rather than 'marketing', and on a backdrop of stories about networks rolling out display ads.

We've been hearing about the joys of location based services / advertising for years, but the technology needs to improve as I understand it. But there are myriad opportunities in this area - slightly surprised that we're not seeing more use of it, in 2007.

The screensaver idea is an interesting observation - reminds me a little of the work being done by Skinkers for brands wanting to experiment in Desktop Marketing.

The real opportunity for mobile, I think, is how brands can create mobile widgets to help customers to service accounts / reorder etc to minimise churn rates and grow lifetime revenues.

Mobile seems far less geared up to acquisition, by my reckoning. Mobiles are no good for filling in forms, and I suspect people trust them less than the web when it comes to handing over their credit card details.

We continue to watch with interest, as do many client teams.

c.

almost 9 years ago

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Ryan

"10.There's something better on the horizon
I don't agree with the theory that IPTV is the next big thing, people don't have as much time to sit watching TV as they used to. TV Ad impacts are in decline. more targetted solutions my slow decline but in the future advertisers will need to think more cleverly around social networking and personalisation of content than just IPTV. "

That is ridiculous. People don't have as much time to watch TV, but instead after I get home from work I will sit around responding to silly ads and surveys on my phone? I watch more TV now that I am working full time than I ever did in college when I was busy studying. I very much agree with the first point, my cell phone is a tool, I use it to make calls or send a text message and if I am bored, I play a game while waiting in a lobby.

I would be very annoyed to receive any sort of ad on my cell phone, even more so than a spam e-mail or a telemarketer on a landline. I would never sign up for a service, and I certainly wouldn't respond to one. I am 23 and so I am in the "young" demographic, that doesn't mean I want ads on my cell phone. I think it is a horribly overhyped medium, and I really enjoyed this article.

almost 9 years ago

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mobile marketing

Android comes to give us annoying ads to our pocket but even if android is for free people prefer standard mobile phone.

----
Javtech
http://www.javatech.eu/mobile-software.html

over 8 years ago

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Andrew Grill

In a longer post at http://blog.andrewgrill.com/blog/_archives/2008/1/27/3489539.html

I looked at 4 things that need to be fixed to make mobile advertising work...and I offer them below

If we look at the lessons from the "traditional internet", and apply these to the mobile internet AND inject the issues specific to mobile in the mix.

The tipping point will be reached, in my view when 4 key issues around mobile are solved:

1. Flat rate data plans for all - prevent bill shock for users who have downloaded some great ad but been charged for the pleasure. Flat rate data will also allow users to start using the mobile internet on a daily basis - making it an extension of their desktop experience. Compare this with flat-rate broadband plans - who still wonders if they will go over their monthly allowance while watching YouTube videos? If we expect mobile internet adoption, we need to price the data plans so that they are generous and within reach of the average subscriber. Only then will adoption increase exponentially. Remember SMS? Why did it take off in GSM countries like Europe, and Asia? Because it was easy, it came pre-loaded and it just works. UK operators have started offering flat rate plans - see Will the 3G mobile broadband “dongle” kill the WiFi hotspot market?

2. Common framework for mobile page rendering and addressing - get this right and non-tech users won't have to even think about which web address they put in to their phone (see my post m.dot or dot.mobi - which mobile website naming convention will prevail?) Having one web address for the "mobile" site like m.twitter.com or m.live.com etc means the consumer has to think before they type. Make it easy (see my SMS example above) and the average non-tech user will adopt it. If they adopt the mobile internet, then the path is clear for mobile advertising to take off.

3. Mobile location without GPS, and zone detection - big call here and there are a number of players including Google working hard on this. There is also a role for the mobile operators to play in this space as they own, and update the actual cell-ID information that others need to use to make sense of handset location. Location has typically been very hard to get right, with issues around accuracy, and the cost of the location. For network based location, each location "ping" consumes the same resources as an SMS - and it must be charged by the operator as there is an opportunity cost (ie if I located someone, I could have used the same resources to send an SMS so I need to charge like an SMS - which is a few pence/cents wholesale rate). This means that mass market "polling" of a subscriber's location will never make financial sense. Google have managed to work around this by having the handset perform part of the location decision, but this still requires a massive database to be updated. It also assumes the user has the Google Mobile Maps application on all the time and configured for this to work. There is a huge opportunity here to make the process seamless and work cross-carrier. Watch this space - this is the key to location and hence mobile advertising as Eric Schmidt rightly points out.

4. Customer profiling - working out how mobile operators sensitively profile users and serve up ads that are entirely relevant. This is a big one. I am a Vodafone UK contract customer. Only Vodafone UK know I am a 39 year old Male - and my home address. They know how often I call, and who I call, who calls me, and where I call from. They even have a better idea than my wife of the destinations I roam to. This information is gold dust to an advertiser (if I allow it to be provided). The portals won't ever have this relationship as I don't pay Google a cent so they do not have a commercial relationship with me. MVNO Blyk has started in this area and initial results are promising with their unique approach to profiling and targeting.

The issue here though is that even if I was entirely happy for Vodafone to use my profile to more effectively target ads to me (and provide me a benefit in return - I will leave this subject for a follow up post), the data protection (privacy) laws in the UK and probably many other countries prohibit Vodafone from sharing this information with a 3rd party - it is private and should stay within their network. Here lies the problem. If mobile advertising is to be successful, then demographic profiling information (including past and present location) must reside on the carrier side - which means that they must also (and are best placed to) provide the search engine. Expect a showdown between some of the portals and the operators once the real revenue opportunity becomes evident for mobile advertising.

"It seems obvious that advertising, that works so well on the traditional Internet, should also work well on the mobile Internet," Schmidt said I have addressed the key learnings from the "traditional internet" above in the first part of my post - we've all been here before. Let's not make the same mistakes twice. But Schmidt said the estimates would be adjusted upward once the business reaches a "tipping point," which will be ushered in by new technologies. "We need to create that framework in which the really creative people can build (mobile) applications that none of us can even imagine. That is the recreation of the Internet, the recreation of the PC story and it's very exciting. It'll happen in the next year. It will be big." With these statements, I can only agree with Eric Schmidt.

over 8 years ago

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