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Decoding the Mobile Ad Space

Posted by TeamITI on April 12, 2010

There’s a fierce debate going on in the digital media world. One side claims mobile ads are effective and the other that they just don’t work. Steve Jobs has said that “mobile ads suck,” despite acquiring Quattro Wireless, a mobile ads company, three months ago. However, in my experience, mobile ads work, and there’s empirical proof.

To be sure, mobile phones are not PCs. They have smaller screens, different operating systems, richer location information and different use cases. Similarly, advertising on mobile phones has advantages and disadvantages when compared to their desktop cousin. This means, for example, building campaigns to reach audiences across a sea of devices including iPhones, Blackberrys and Android devices. The platforms offer varying degrees of richness and interactivity, but strong marketing results are being achieved across them all.

Mobile is new, different and requires a built-for-mobile strategy. That does not mean that it sucks.

While mobile was considered experimental just five years ago, there are now thousands of marketers who have run successful mobile campaigns and have subsequently built mobile into their ongoing plans.

These marketers track and measure conversion rates and impact on brand metrics. Most importantly, marketers track the cost to drive a purchase, opt-in, subscription, registration or phone calls so they can quantify their cost per acquisition. If their ads don’t deliver on these metrics, advertisers stop spending.

It has been exciting to watch the light go on for marketers as they see how effective mobile is right now. Last year, in its first mobile effort, Armani Exchange drove strong interest in its new line, and thousands of people used store locator functionality to identify places where they could buy Armani Exchange clothes. Armani Exchange has grown its investment based on the strong results it achieved on its mobile buy.

Some advertisers are focused on driving adoption, subscription or purchase in large numbers. These marketers are extremely analytical. They focus on their return on investment and utilize targeting and tracking tools to minimize the cost per action desired. PayPal, which is building its mobile payments network, knows what it is willing to pay to acquire an active mobile customer.

Enhanced features
PayPal’s marketers use mobile to drive penetration of the PayPal iPhone and Android app and recently released a new version of the iPhone app that allows customers to send money by bumping iPhones together. By leveraging new ad formats on the iPhone, PayPal is educating mobile users about its app’s enhanced features and has created a seamless user experience from ad to click to download to interaction. This laser focus on conversion and ROI applies similarly to e-commerce, dating and many other categories.

Mobile ads also work for branding. As platforms mature, ad capabilities advance and new ad formats emerge. We’ve seen big steps forward in memorable rich ad formats.

Recently, Ignited and Universal Pictures ran an engaging campaign for The Wolfman feature film. This is a great example of the type of exciting creative that brand advertisers can utilize.
The campaign drove off-the-charts brand impact relative to the control group (31 percent increase in intent to see the film, 69 percent increase in mobile ad awareness and 31 percent increase in release date association). The learning here is that mobile devices are effective at driving awareness, interest and brand favorability.

In fact, mobile ads outperform online ads as a branding medium.

Insight Express runs hundreds of brand studies both in mobile and online, and it’s found that mobile lifts brand metrics significantly more than online.

Per Insight Express’ aggregate brand study data, users exposed to online ad campaigns show a 2 percent increase in purchase intent while users who have been exposed to mobile ad campaigns show a 12 percent increase. Similarly, mobile ad campaigns deliver significantly better on every brand metric, including message association (3 percent increase online vs. 14 percent on mobile) and brand favorability (2 percent increase online vs. 10 percent on mobile).

The data speaks for itself:  Mobile advertising drives better results for brand advertisers than online.

Ask eBay if it’s happy with the $500 million plus it booked via mobile devices in ’09.  Ask MediaEdgeCIA, Land Rover’s agency, whether mobile is effective at driving dealer lookups and test drives. Despite the recent high-profile criticism that “mobile ads suck,” the data proves just the opposite—mobile advertising is an extremely effective medium for reaching the right consumers with the right campaign at the right time.

Mobile ads don’t suck. Mobile ads work. They work today, and they represent enormous and unbounded opportunity tomorrow. The numbers don’t lie.

This article is published by Mediaweek, read the original article here.


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