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Mobile device adoption is ushering in a new era of digital marketing, creating a powerful channel for companies to communicate with customers at critical points of the purchase decision cycle. Enterprises and agencies recognize the importance of mobile in raising brand awareness and engaging customers. In Yankee Group’s surveys, nearly 90 percent of all companies place a high priority on mobile channels for customer outreach. As Exhibit 1 shows, large players—which include the world’s biggest advertisers—are most strongly motivated to turn mobile to their advantage. But although mobile is top of mind for marketers, fragmented channels, confusion over targeting and measurement approaches and deficits in customer data have presented unique challenges to creating effective mobile campaigns. This paper presents Yankee Group’s latest research to illustrate how mobile advertising is under-performing mobile’s position as the linchpin channel for personalized marketing. Recycled ad formats and strategies from legacy channels are poorly suited to the way consumers use mobile devices. Although enterprises recognize the importance of mobile, the difficulties of demonstrating a return on investment (ROI) using these legacy approaches has led to hesitation in reallocating marketing budget to mobile advertising.
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A Whitepaper
September 2013
Mobile Advertising: Measurability Unlocks Big Advertiser Spending
Inside you’ll discover:
• Why mobile is an untapped advertising vehicle
• The digital imbalance that exists today
• The most effective targeting approaches to reach consumers
• How Big Data is intersecting with mobile advertising
• Where mobile fits along the consumer path to purchase
• What measurements should marketers focus on to drive campaign success
September 2013
Mobile Advertising: Measurability Unlocks Big Advertiser Spending
This custom publication has been sponsored by 4INFO.
TABLE OF CONTENTS
Marketers Prioritize Mobile for Customer Outreach 1
The Digital Advertising Imbalance 2
Mobile Advertising’s Data Deficit 3
Measurement Tips the Balance 3
Case Study: 4INFO Tackles Mobile Advertising’s Data Challenge 4
Conclusions and Recommendations 5
Marketers Prioritize Mobile for Customer Outreach
Mobile device adoption is ushering in a new era of digital marketing, creating a powerful channel for companies to communicate with customers at critical points of the purchase decision cycle. Enterprises and agencies recognize the importance of mobile in raising brand awareness and engaging customers. In Yankee Group’s surveys, nearly 90 percent of all companies place a high priority on mobile channels for customer outreach. As Exhibit 1 shows, large players—which include the world’s biggest advertisers—are most strongly motivated to turn mobile to their advantage. But although mobile is top of mind for marketers, fragmented channels, confusion over targeting and measurement approaches and deficits in customer data have presented unique challenges to creating effective mobile campaigns.
This paper presents Yankee Group’s latest research to illustrate how mobile advertising is under-performing mobile’s position as the linchpin channel for personalized marketing. Recycled ad formats and strategies from legacy channels are poorly suited to the way consumers use mobile devices. Although enterprises recognize the importance of mobile, the difficulties of demonstrating a return on investment (ROI) using these legacy approaches has led to hesitation in reallocating marketing budget to mobile advertising.
Exhibit 1: Mobile Outreach Is Top of Mind for Major PlayersSource: Yankee Group’s 2012 US Enterprise Mobility: IT Decision-Maker Survey, December
High Priority of Mobile Web and Apps100%
80%
60%
40%
20%
0%
% H
igh
Prio
rity
95% 91% 84%
Large(2,500+)
Medium(100-2,499)
Small(under 100)
Mobile Advertising: Measurability Unlocks Big Advertiser Spending September 2013
Page 2© Copyright 1997-2013, Yankee 451 Group, LLC. All rights reserved.
The Digital Advertising Imbalance
Mobile is reshaping lifestyles. Handset owners spend nearly 40 minutes a day using mobile data (see Exhibit 2). Time spent using apps and Web jumped by nearly 50 percent in 2012 and is equivalent to 22 percent of the daily time dedicated to using the Web on PCs.
Exhibit 2: Mobile Web and Applications Win Consumer AttentionSource: Yankee Group’s 2012 US Consumer Survey, December and 2011 US Consumer Survey, December
Despite mobile’s central role in daily activities, a cross-platform comparison of ad spend reveals a substantial imbalance in digital marketing investment by brands. As Exhibit 4 indicates, mobile advertising spend only amounts to $8 per handset annually, compared to $221 per connected PC. Deficits in customer data and the inability to quantify mobile advertising ROI are causing marketers to view mobile campaigns as less effective or experimental. The result is an imbalance between PCs and handsets in time spent and ad spending. Although minutes allocated to handsets are equivalent to a third of those on PCs, ad spending per device is more than 27 times lower.
Mobile is not a new channel for customer outreach, but it is raising new questions for the world’s largest advertisers. For more than a decade, marketers have invested in messaging as a way of reaching consumers on the go. Now, marketers must consider how to effectively integrate advertising into a typical consumer’s daily mobile activities, which are divided between Web, apps, messaging and voice—with a growing percentage spent on apps and Web.
Exhibit 4: Time Spent on Mobile Equivalent to Third of PCs, But Only Four Percent of SpendSource: Yankee Group’s Mobile Marketing and Commerce Forecast, June 2013
Average Time Spent(Minutes/Day)
2538
2011 2012Note: Survey data is time spent at work, school or home for all respondents owning devices
The increase in average time spent is paired with a jump in the penetration of mobile smart devices (see Exhibit 3). More than 58 percent of U.S. consumers report owning one or more smartphones; penetration is increasing at a rate of 10 percentage points annually. Tablet ownership more than doubled in 2012 to reach 29 percent of respondents. Device adoption has led to an explosion in mobile media and services. Our surveys clearly demonstrate that mobile is embedded into the media, working and shopping habits of most consumers, and Yankee Group expects consumer usage of mobile devices to continue increasing at rates surpassing other platforms.
Exhibit 3: Mobile Smart Device Penetration SoarsSource: Yankee Group’s 2012 US Consumer Survey, December and 2011 US Consumer Survey, December
Consumers Owning One or More Devices
58%
201229%
47%
201112%
Smartphones
Tablets
Annual Ad Revenue Per Connected Device
$221PCs
Handsets $8
Average Time Spent Online (Minutes/Day)
126
38
PCs
Handsets
Note: U.S. annual average spending per device. Average time spent in PCs (Web) and handsets (apps and mobile Web).
Mobile Advertising: Measurability Unlocks Big Advertiser Spending September 2013
Page 3© Copyright 1997-2013, Yankee 451 Group, LLC. All rights reserved.
Mobile Advertising’s Data Deficit
The ability to measure ROI has established digital marketing as a central component of brand outreach. Marketers expect digital channels to provide a connection between served ads and resulting actions. In the case of mobile, two deficits in customer data complicate the process of attributing actions to ads. First, tracking mobile usage is complicated by the low efficacy of HTTP cookies/clients, which are ineffective in apps and receive inconsistent support between mobile browsers. Second, user data gathered by mobile OS vendors, operators and publishers is fragmented between these competing players.
The results of these two shortfalls include: poor mobile audience segmentation, low targeting accuracy and oversampling, poor ad relevancy and reliance on an inadequate set of campaign metrics (e.g., click-through rates and ad impressions). Advertisers find that targeting and measurement methods adapted from the Web are not optimal in mobile and fail to measure the return on mobile ad investment at the point of sale.
Measurement Tips the Balance
Measuring Mobile Advertising ROI
Mobile’s future position as the linchpin channel for personalized marketing relies on combining data from multiple sources to target and measure advertising campaigns. Data-driven enterprises will opt for mobile campaigns that use data resources to serve targeted ads that provide a measurable ROI on advertising. Marketers should assess mobile marketing solutions based on their ability to:
• Engage users by serving ads based on advanced segmentation and individual preferences.
• Leverage big data solutions to accurately target segments and profile mobile audiences based on internal customer relationship management or third-party data sources.
• Measure the ROI for campaigns using solutions that close the loop between ads and resulting sales.
• Plan for growing consumer concerns over privacy by opting for solutions that protect personal information.
Mobile Marketing and the Customer
Mobile provides a unique channel for reaching customers at crucial points of the purchase decision cycle. Mobile phones are the ubiquitous digital device on the move. In addition to mobile media usage, Exhibit 5 on the next page shows that 40 percent of handset owners use their devices in store as part of the shopping process. Advertisers that understand how consumers are using devices throughout the path to purchase, whether in-store or in any other location, are moving to solutions that provide highly relevant reach to specific mobile users and effective measurement based on sales resulting from campaigns.
Mobile Advertising: Measurability Unlocks Big Advertiser Spending September 2013
Page 4© Copyright 1997-2013, Yankee 451 Group, LLC. All rights reserved.
Case Study: 4INFO Tackles Mobile Advertising’s Data Challenge
4INFO was founded in 2004 and started out by building a leading position in SMS advertising. The company invested in solutions aimed at mobile display and app advertising and introduced its AdHaven ad server platform in November 2010. The building of an entirely new technology platform designed to precisely target mobile advertising based on past purchase data and enable closed-loop measurement, along with a series of strategic partnerships with leading data specialists, led to the launch of AdHaven Bullseye in 2013.
AdHaven Bullseye
AdHaven Bullseye serves targeted mobile ad units through mobile Web and app. The components of the platform are an ad server, an ad management platform and analytics reporting for mobile campaigns. AdHaven Bullseye enables advertisers to measure the impact of mobile advertising using actual in-store purchasing data. By creating a closed loop between ads and sales, 4INFO and its partners are enabling clients to measure the ROI from campaigns by actual sales lift—an approach that has led to deployments with a variety of consumer brands in the U.S.
At the core of AdHaven Bullseye are data profiles linked to anonymous mobile devices. 4INFO has mapped more than 150 million consumers’ mobile devices to 101 million households in the U.S. and supplemented this with demographic and sales data from third parties. A direct association of the mobile device with a household address enables advertisers to measure the impact of cross-channel campaigns by tracking offline sales supplied by third-party partners or first-party CRM data. The app or mobile Web site sends a request and makes a direct match between the 4INFO device ID and a household. AdHaven pulls third-party data attached to the household and applies the advertiser’s audience requirement before the ad is served. 4INFO then combines the campaign and offline sales data from retailers to measure the impact of the ads at the point of sale.
Use Handsets to Access Product Information in Stores
45%
40%
Q2 2013
Q4 2012
Exhibit 5: Mobile’s Influence in the Purchase Decision Cycle IncreasesSource: Yankee Group’s 2012 US Consumer Survey, December and 2013 US Consumer Survey, June
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© Copyright 2013. Yankee 451 Group, LLC. Yankee Group published this content for the sole use of Yankee Group subscribers. It may not be duplicated, reproduced or retransmitted in whole or in part without the express permission of Yankee Group, One Liberty Square, 6th Floor, Boston, MA 02109. All rights reserved. All opinions and estimates herein constitute our judgment as of this date and are subject to change without notice.
Partnering for Data
Partnerships are a defining element of 4INFO’s approach to building the data resources provided to clients for ad targeting and measurement. AdHaven Bullseye combines 4INFO’s own mobile device ID data with customer data and data from Acxiom, Datalogix, Nielsen Catalina Solutions and Speedeon Data. AdHaven Bullseye provides solutions for marketers in consumer packaged goods, automotive, financial and retail. 4INFO plans to extend its partnership strategy with data providers to serve other verticals in mobile advertising.
Conclusions and Recommendations
Mobile is embedded into media, working and shopping habits. Major advertisers recognize mobile as a crucial platform for marketing, but concerns over the return on mobile ad spend have curtailed investment. The future of mobile marketing lies in personalized campaigns that demonstrate ROI through accurate measurement of ad performance. Yankee Group makes the following recommendations to advertisers and agencies:
• Incorporate metrics based on actual sales to measure the ROI produced by mobile campaigns. Marketers and agencies should look beyond click-through rates and ad impressions to solutions that measure the return on mobile ad spend by increases in online and in-store sales resulting from campaigns.
• Prioritize mobile as a critical channel for customer outreach. In the past year, time spent by consumers in mobile Web and apps has increased by 50 percent to 38 minutes a day. Invest in campaigns that reach your customers at critical points of the purchase decision cycle. Major brands and services have the most at stake in integrating mobile into marketing strategy.
• Personalize the mobile ad experience. Mobile screens are small and user sessions are short. Advertisers should improve the ROI on mobile marketing by serving ads only to relevant users and tailoring campaigns to their specific interests.
• Reach mobile users through multiple channels. Mobile media usage is divided between Web and apps. Marketers should choose solutions that can extend across mobile channels and provide consistent measurement across ad formats.
• Opt for ad solutions that incorporate multiple parameters to provide a complete picture of the customer. Campaigns based on single data parameters lack precision and lead to wasted ad dollars. Advertisers should seek out solutions that combine profile, behavioral, purchase and contextual data for a complete picture on the user.
