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Should you care about the size of mobile marketing?

As a former analyst and researcher, I find myself somewhat ambivalent about research reports that deal with the size of the growth of a new market. At Ernst & Young’s Center for Business Knowledge I had access to all the research in the world, and I recall vividly creating PPT presentations and reports explaining how big e-commerce was going to be. I also recall the skepticism I encountered in the late 90’s  and I recall how all estimates turned out to be massively understated (although some sectors were overstated in the short term and understated in the long term).

Online marketing vs mobile marketing?

I have since developed a filter on any kind of number that is thrown out there to justify the existence of research organizations (where are the I-banks and Consulting firms these days? This stuff used to be free!).  The latest one comes from UTalkMarketing.com which claims that despite huge growth, mobile advertising is non-significant as an advertising channel.  There is a clear confusion about what mobile advertising is (For instance, what is advertising and what is marketing when it comes to mobile? If mobile is used as a response mechanism in a campaign, is it still advertising? Or just part of a marketing mix?).

Mobile guru Tomi Ahonen has picked up on this and points to a number of conflicting research “studies” (warning: Tomi’s posts tend to be lengthy. You may need to get a cup of coffee first. But definitely worth reading).   Tomi’s main point is to look at the relative growth of mobile, and also to the fact that it is growing when most other outlets (including online) has declined in this economy.

Where Tomi goes on though – and this is a frequent argument in the case for mobile advertising – is to point to the high response rates in mobile.  I feel that this argument – although certainly compelling – can be a dangerous one.  High response rates in a nascent market can simply be that there are not a whole lot of campaigns out there, and people click/respond simply because they have nothing better to do.  They have not been subjected to the display fatigue you see online.  I am worried that once response rates drop, it may give non-believers a reason to talk mobile down.  I myself have been among the ones thoroughly disappointed when a leading ad network in their standard sales pitch said their average CTR was 7-8% and our campaign ended up less than 2%. Later research confirmed that it was not due to our service, we were simply misled as the 7-8% rate was at least 1-2 years prior – when there were a lot less ads out there. Overselling helps nobody – and touting these wildly successful, almost unbelievably successful campaigns seems to be setting the wrong expectations.

Instead, the focus needs to be on the advantages of mobile as a response channel, as an interactive device, that is with you 24/7.  The power comes when mobile is a natural part of the overall marketing mix, and when the inherent uniqueness of mobile is fully exploited. That has to do with clever creative rather than force feeding high expectations based on past achievements.  I am convinced that mobile marketing will be much larger than what has been envisioned, just as e-commerce turned out much bigger than people expected back in the 90s, but given mobile’s complexity, it is bound to take longer than it did online.

What keeps the momentum rolling is the passion of the people involved in the industry. And as you can see from this presentation from Razorfish, the big guys are starting to catch on (incidentally, this presentation was hotly debated in terms of its value, but there is no denying it provoked thoughts).

Posted in Mobile Marketing.

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5 Responses

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  1. Michael Stone says

    Hi JT,

    Great article and we also feel that a focus on CTR, especially historic rather than realistic rates, is not particularly healthy and reflects an overall immaturity in the mobile advertising space.

    We believe that the engagement potential of mobile is also worth measuring and reporting, and our latest Mobile Internet Insights report seeks to do that. Entitled ‘After the Click Through’, it analyses around 100 mobile marketing campaign sites to look at what happens when subscribers land at the site having clicked the banner ad.

    You can request a copy from our website by clicking http://tr.im/qpz7.

    Cheers,

    Michael Stone
    Amethon Solutions

  2. Rico says

    Hi JT

    Agree with you. Interesting article! Keep up the writing. Just subscribed to your feed.

    I think there is a huge potential in mobile advertising. From a business point of view, still 30% of all Swiss hardly are online. Bringing a company’s message to their mobile phones will open up a tremendous variety of new possibilities in advertising (as the computer did and still does).

    Cheers

    Rico

Continuing the Discussion

  1. tomiahonen (tomiahonen) says

    JT Klepp blogs about mobile advertising stats and warns of over-estimating based on early data. Good article http://tinyurl.com/kjooal

  2. tomiahonen (tomiahonen) says

    JT Klepp blogs about mobile advertising stats and warns of over-estimating based on early data. Good article http://tinyurl.com/kjooal

  3. Has the mobile gold rush started? linked to this post on November 10, 2009

    […] have argued before that the value of mobile may be much more so in mobile as a response channel rather than a display channel (which for instance can be seen by the rather low revenues generated […]



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