Graham Christie
Apr 3, 2014

Beyond the sponsored post

THE MOBILE HUB: Thoughts on consumer expectations and 'native' advertising in the mobile space.

Graham Christie
Graham Christie

In Mobile Hub I’m given to suggesting mobile decision-makers should try to block out the noise, slow down, and take a deep breath, such is the pace of the sector. We need to consume less of our own hype to see challenges more clearly.

As mobile matures, certain aspects of its lifecycle quite naturally play out. Right now, there are a few important transformations underway. There’s of course sustained rapid traffic volume increases right across the board. There’s sluggish adoption of content subscription models. We’ve all observed a reduction in typical click-through-rates (dreadful metric anyway). And we’re also seeing shifts in media trading automation.

So in summary, there’s burgeoning supply, but higher expectations of advertising revenues, the basic CTR metric is lower than a year ago, and less human intervention engaged in the process generally. Put those factors into a blender and it’s easy to see why the question, ‘Where’s sustainable big yield growth going to come from?’ being answered for many by the hope of ‘native ads’.

Many publishers look upon Facebook’s rapid mobile revenue growth with a mixture of shock and jealousy, and many advertisers seem to be liking the efficiency and effectiveness of this opportunity. Time will tell if users will.

Whether you’re a fan of the term ‘native’ or not, the social-media context for many is at the essence of the ‘native’ opportunity. Based on this social-only definition, according to BIA/Kelsey, native ads in the US will grow to $3.1 billion this year and reach $5.0 billion in 2017. (NB this is desktop and mobile—APAC and mobile figures seem difficult to find.)

But ‘native’ should enjoy a far wider definition than this, going beyond the news or feed integration example, instead looking at the ad portfolio more holistically encompassing for example branded content, high-impact custom ad display formats, unique placements, video, and data enriched propositions to the mix. They should all inhabit this ‘native’ space, and do so also co-existing with an optimum standard display and performance suites. For their part, eMarketer state that there was a 20 per cent increases in a more broadly defined ‘native’ ad space in the US in 2013, so there are US organisations investing in their future, however APAC publishers and other audience owners are lagging.

This portfolio approach, creating multiple tiers of both scarce and abundant ad product enabled through a single adtech platform holds the key, but it is without doubt harder to plan and execute. However make no mistake, this is the most important challenge to overcome today. Publishers need to be less focused on sell-through rates, and advertisers less focused on buying at price, with everyone instead making real effort to develop and innovate.

At last week’s annual World Federation of Advertisers summit, Sir John Hegarty asked all marketers to be vigilant to not allow process to overtake innovation, and to “turn intelligence into magic”. The message from Hegarty, one of the world’s finest and highest regarded communicators, is clear: Organising a marketing campaign really well is no guarantee that it will resonate or actually work. I believe the risks of getting this wrong in mobile are arguably higher, as people are less tolerant of lazy marketing.  So we need to balance the drive for efficient delivery and optimisation, with road-mapped new innovative ad models.

State of APAC mobile

The Mobile Marketing Association (MMA) and analysts Warc jointly conducted an APAC survey into attitudes towards mobile marketing published to coincide with FOMA, held in Singapore in March. The survey from over 300 respondents in 24 countries in the region surfaced key themes.

The biggest of them is reluctance to invest, with 78 per cent allocating 10 per cent or less to mobile budgets. All respondents expect however to see budget allocations growing (up 30 per cent by 2019).  The capability gap is most probably the chief inhibiter with 45 per cent of respondents saying skill shortages in emerging new technologies is their top concern.

Similarly to last month's Mobile Hub, there is a data point around the leading mobile markets in the region, (showing real consistency across studies), with most innovative markets being cited as China (43 per cent), Singapore (38 per cent), Japan (33 per cent) and Australia (31 per cent), according to this study. Lastly from an industry vertical point of view travel, transport and tourism were seen as the most innovative using mobile (34 per cent.) Other notables included leisure and entertainment (32 per cent), telecoms (29 per cent) and financial services (29 per cent). See www.mmaglobal.com/region/apac for detail of this report and a bounty of other insights and resources.

Graham Christie is partner, Big Mobile Group

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