Why Mobile Advertising May Prove to Be More Effective than Internet Advertising

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Why Mobile Advertising May Prove to Be More Effective than Internet AdvertisingExamining the Implications of Current Research

Mobile Ads Are 30 Times More Effective than Internet Ads

The headline was run by a wide range of industry publications: Mobile Ads Are 30 Times More Effective than Internet Ads. It refers to a study about advertising on mobile phones that was recently carried out in association with a leading operator in the Czech Republic.

The research, which included 22 top brand advertisers and more than 3000 users, showed that “the average successfulness of individual SMS/MMS campaigns was approximately 27 times higher than in the case of Internet banner campaigns. Even the results of the least successful campaign surpassed the response rate” for Czech Internet campaigns.1

Taking Digital Advertising to the Next Level

The Internet deserves a full measure of credit and admiration for developing new advertising concepts and business cases that made possible the spectrum of wonderful developments on the Web. It is with due respect and humility, rather than arrogance, that the mobile industry reacts to the likelihood that mobile advertising is more effective than Internet advertising.

Assuming the validity and the accuracy of the referenced research, the question to be addressed is: What makes mobile advertising more effective than Internet advertising? A comprehensive answer is comprised of many components.

Our attempt at defining those reasons is below:

The Top Ten Reasons Why Mobile Advertising Is More Effective than Internet Advertising

1) Where the Users Are: Advertisers can reach many more users via the mobile phone than via the PC. Globally, mobile ownership/ usage far outstrips Internet access. It is estimated

1 http://www.cellular-news.com/story/38178.php

that half of the world’s humans now carry a mobile phone (approaching the 4 billion mark), yet Gartner’s latest figures put the number of installed PCs worldwide at “only” 1 billion units — and not all of these have Internet access.2 The gap between mobile and PC ownership is even greater in developing markets.

2) Multiple Touchpoints Are Better Than One: Internet ads have one way to reach users: through the Internet. Mobile operators have a much richer menu of options to offer advertisers: voice (visual voicemail, ringback tones, missed call notifications, etc.), text (SMS), multimedia (MMS), mobile Internet, billing touchpoints, handset clients and more.

3) One-on-One: Due to the one-on-one personal nature of the mobile communication tool, its ads are more effective in terms of product awareness and sales. Because messages are intended just for the user, users generally pay more careful attention to mobile ads (e.g. text added after a notification) than they do to ads that come to a PC.

4) Bulls Eye — Right On Target: The unrivalled amount of relevant information about the subscriber makes the mobile the ultimate targeting tool. Unlike the PC, the mobile phone is usually used by a single individual (as opposed to a household on the PC) Advertisers can know exactly who the users are in order to target ads effectively:

Demographic Info: - From subscriber profile

Time and Context: - User, website, time, location, etc.

Ongoing Profile Builder: - Subscriber information is accumulated from a variety of sources to one unified subscriber profile

Predictive Behavior: - Based on user habits, preferences, history

Because targeted ads are inherently more relevant, they are more interesting; users pay more attention to them and advertisers get a higher response rate.

5) On Location: When a user is mobile, a phone in the hand is worth two PCs in a bush (to paraphrase the famous adage). Only via a mobile phone can knowledge of the user’s movement and changing location be utilized for timely offers, such as a discount at a store or at a cafe in the food court as a user enters a mall. Advertising for small

2 http://www.gizmag.com/global-pc-installed-base-passes-1-billion/9569/

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local businesses has a much stronger business case on the mobile than on PCs.

6) Trusted Billing Relationship: The confidence and high level of trust that the user has in the operator facilitates decisions to purchase. Whereas purchases from a PC generally require money transfer methods such as PayPal or credit cards – purchases form a mobile phone can be handled simply, quickly and automatically by means of familiar and trusted billing procedures. This makes users much more likely to act on their impulse to buy through their handset.

7) Direct User Response: The interactive nature the mobile phone removes barriers to responding and purchasing through direct user response capabilities: Click to call, click to SMS click to purchase...

8) Opt In: Unlike the PC experience, users opt in to participate in mobile advertising. Whereas ads on the PC are largely regarded as a form of span and ignored, mobile ads are delivered only to those who request them. The way they are regarded increases their effectiveness.

9) Triggers: Mobile ads triggered by real-time situations (such as billing, location triggers and more) can be highly effective in meeting immediate real-life needs and maximizing response rates.

10) Banner Blindness and Ad Blocking – On the Internet Only: Eye-tracking studies show that Internet users have developed “banner blindness” and in a large number of cases have stopped even noticing Internet banners – to say nothing of the large number of users who utilize ad-blockers to prevent even the appearance of ads. The nature of mobile advertising prevents both of these phenomena, giving mobile ads a chance to be more effective.3

3 Research: Internet Users Plagued by ‹Banner Blindness› http://www.clickz.com/3616001

Strong Results Are Attracting the Attention of Advertisers

The research in the Czech Republic seems to confirm that mobile advertising is much more effective than Internet advertising. The average mobile response rate was 2.72%. In the case of the most successful campaign, the response rate reached 11.78%. The least successful mobile campaign had a response rate of 0.29%, three times higher than the average Internet of about 0.1% for Czech Internet campaigns.4

The research is not conclusive and further studies are warranted. Further clear strong results for mobile advertising will continue to attract the attention – and dollars – of advertisers to this growing advertising domain.

4 http://www.cellular-news.com/story/38178.php and http://en.t-press.cz/tiskove_zpravy/2009/1000/