Are Consumers Ready for Mobile Advertising?
Consumer confidence is down, the economy is up and down and there are reports all over the Web anticipating a slow online buying season. But one industry is up - and shows no signs of slowing down. According to various estimates Apple's 3G iPhone has sold about 6 million units since its launch in July - becoming Apple's top earner. T-Mobile's Android-enabled G1 has sold between 500,000 and 1.5 million units thus far - the figures are highly debated, but impressive nonetheless. In short, these uber-advanced devices have the mobile market growing fast and transforming. So, does this mean that mobile advertising will soon live up to its hype?
AdMob, touted as the world's biggest mobile ad network just received a fresh $15.7 million in funding. According to their numbers, they have a network of more than 6,000 partners worldwide and served 4.5 billion ads in September 2008. Its reported that AdMob will use a portion of that funding to hire new staff in key local markets. When you consider the economic environment and that corporations are slashing jobs left and right, that's a bit of an eye-opener.
A September, 2008 whitepaper from Nielsen claims that 76.8 million wireless subscribers (this includes both data subscribers, calling plans and SMS) recall seeing some form of mobile advertising on their phones in Q2, 208 - up 81 percent year-over-year.
That same study found that 63 percent of those ad viewers saw mobile ads just once a month, or less. That begs the question - what's the hold up? Could it be that mobile advertisers are simply frightened to enter the market, worried they will alienate mobile users. I think as mobile Web surfing grows, so will acceptance of advertising - advertising they already see all over the Internet.
Response rates to mobile advertising appears to have reached a plateau. The Nielsen study found that in Q2 2008, 13 percent of mobile data consumers (45 percent of whom saw an ad) responded to a mobile advertisement in some way. That compares to 12 percent in Q2, 2007 - a meager increase.
GetJar, a mobile app distributor and developer community over 200,000 strong, conducted a poll recently showing that 78 percent of respondents from a worldwide audience are delaying plans to upgrade or buy a new mobile phone as a result of the current economic climate. The study also found that 76 percent of users are planning to reduce the amount they spend on phone usage.
Bill Scott, vice president of business development at GetJar said, "For mobile marketers, however, this presents some opportunities. Our findings show that 28 percent of people we have interviewed have switched from a paid premium service to a free mobile application to avoid carrier charges. This provides and interesting alternative for marketers, as they can advertise within these apps."
I think that's a very important point. These new devices have opened an entirely new market with apps - both for developers and advertisers. Mobile subscribers are consuming apps at an astounding rate. In four months, the iPhone App store has seen more than 200 million downloads. New Android apps are being added daily.
Finally, one of the biggest detractions of mobile advertising is also one of its biggest assets. The mobile device is very personal to most people. And while intrusion of that layer of privacy is a concern, it also means that advertisers have a very captive audience. For small and medium businesses that may not have the resources to develop an app* or engage in heavy mobile advertising with one of the large networks, it might be a good time to start some incentivised text-messaging advertising. Studies from Harris Interactive this May showed that among those surveyed, 56 percent of teens said they would be interested in viewing mobile ads with incentives - 37 percent of adults said the same.
And there's yet another way to tap into the captive mobile ad market for any size business. Email. Simple emails - stripped of images and long URLs - reach more mobile consumers than ever these days with the growing abundance of email-enabled phones.
*Don't miss Website Magazine's November issue, which includes "Avoid iPhone App Traps," detailing some common missteps when developing apps. Subscribe today!