First of Martin’s Inside track columns on mobile. Directly from leading online site mSearchgroove.

Local focused mobile advertising is shaping up to be more than a revenue opportunity. There is every indication that it will be one the few channels to buck the downward trend in advertising spend over the next few years. Where’s the money? Martin Wilson – MSG columnist and owner of Indigo 102, a strategic consultancy with a sharp focus on media and mobility – argues the winners will be the ones that keep it simple and make it valuable.

Mobile advertising continues to be a good news/bad news story. And your view seems to depend on the news you want to hear.

November was a stellar month for mobile advertising. Google paid an eye- watering $750 million to acquire 3-year old AdMob, a Silicon Valley-based leader in display and iPhone ad formats. Google is not one to waste money, so you can imagine what a huge opportunity mobile advertising really is (even if the rest of the industry is blinded to it) if a Web giant is willing to pay almost $1 billion for a company with mobile expertise. I wonder if we won’t look back in two years and say it was steal…

At the end spectrum, there are always industry pessimists who ask when mobile advertising will finally be big business. However, I must also note (with a grin) that many of these nay-sayers are large publishers (can’t name names) who are 1) amazed by the tremendous traffic to their mobile Web destinations and 2) clueless about how they might harness mobile advertising and monetise these eyeballs.

And let’s not forget the mood among traditional media players. Doom and gloom everywhere you look: newspapers, direct mail, TV, radio, yellow pages, outdoor, magazines and PC Internet.

In fact, the BIA Financial Network (BIA), parent of the Kelsey Group, forecast spend on these media to decline to $144.4 billion by 2013 from $155 billion last year.  But there are winners among the losers. With budgets under pressure and advertisers beginning to demand far more tangible results, traditional media – such as print – is likely to be hit far harder.

Marketers have long realised this trend and increasingly turn their attention to online and new media channels. Against this backdrop, online commands an ever-increasing share of spend. BIA has forecast the new media share globally to grow from around 9 percent today to over 22 percent by 2013. Moreover, a recent study from Pricewaterhouse Coopers (PwC) predicts by 2013 the new media share of advertising in the U.K. will be around 34 percent.

Clearly, the advertising market is going to shrink and see a substitution of spend. It’s a trend that squeezes traditional media and spells opportunity for companies that either play in new media or migrate value to their online assets. Thus, your chances of survival are a measure of your willingness to rethink your media business models and refocus your operating principles.

MOBILE MATTERS

The media futurist Jeffrey Cole points out that the biggest challenge companies face is their own reliance on traditional advertising models. “The problem [is] people often believe there is enough life left in the ‘old advertising model.’” While many companies are still waiting for traditional advertising techniques to deliver, Jeffrey is convinced that the “big breakthroughs will be digital advertising developed by those who grew up their entire life with digital media.”

If Jeffrey is correct, and I believe he is, then mobile – a personal medium digital natives regard as an extension of themselves – is where we will see the meaningful innovation and positive business results.

Indeed, mobile continues to be the bright spot in a raft of recent industry reports. Then market outlook is even more buoyant when it comes to advertising approaches that successfully combine location and promotion.

The Kelsey Group, a research firm specialised in location-based services, expects mobile local advertising revenue alone to reach more than $3.1 billion by 2013, up from just $160 million in 2008. Meanwhile, Gartner forecasts total spending on mobile advertising to grow to $7.5 billion in 2012, up from $530.2 million in 2008.

Connect the dots in these reports, and mobile advertising revenues could outstrip anything that has gone before, making mobile one of the fastest growing advertising channels of all time. A remarkable feat when you consider that the overall advertising industry (traditional and online) will continue its decline. No wonder Google was so keen to snap up AdMob and stake its turf.

WHY WILL MOBILE GROW

In a word, mobile is different. While other media may be limited to a time or context in our daily routines (print in the morning when we read the newspaper on the train and TV when we get home in the evening), mobile is a 24/7 channel directly to us.

Look at it this way and mobile ticks so many marketing boxes that you ignore it at your peril.

• Mobile is a life-line for the 18 to 30- year old demographic, a very attractive demographic to marketers and notoriously difficult to reach.
• Mobile is a personal device and rarely shared, making one-to-one marketing a real possibility.
• Mobile is present at the point of purchase, providing marketers a channel to influence people’s brand choice and encourage the all-important impulse buy.
• Mobile is measurable, allowing marketers insights into campaign performance and their ROI.

However, for most brands and media owners, mobile remains one of the great untapped channels.

WHO WILL “GET” IT?

Not everyone is blind to the tremendous opportunities at the intersection of local information and advertising approaches. In fact, there is a staggering number of players across the ecosystem jockeying for a lead position. At one end of the spectrum you have the search engines and platforms: Taptu, MCN, Google, Yahoo, and Microsoft, just to name a few. At the other end, you have dozens of directory publishers (Yell, Pagine Gialle, Pages Jaunes, etc.). And let’s not forget the social networks, media owners, verticals, handset manufacturers and mobile operators all lining up for a slice of the action.

The market is crowded. But, if companies continue with their current approaches, then a shake-out is imminent.

To be clear, only a handful of mobile players have what it takes to be highly successful. The barriers to entry, the complexities of the mobile channel and challenges of distribution and discovery make this a game for deep-pocketed players. But other companies have an equal chance (even if they don’t have equal budgets) if they use mobile in a smart and meaningful way to deliver real value to the consumer.

WHAT WILL MAKE A WINNER?

The winners will be the companies that have much more than content (such as local listings, for example). It will be those players that have the capabilities mix to deliver mobile consumers a contextual, relevant and tailored offering. This presupposes the know-how to deliver to the device capabilities, provide consumers the features they expect, enhance location information, support social and viral distribution and add value through marketing and advertising.

It may sound simple, but why are so many companies still getting it wrong?

In my view, they lack focus and an understanding of the mobile channel.

In contrast, companies succeeding in mobile are those players that have recognised the gaps in their knowledge of new media and brought in professionals that do. (Even better if these professionals are themselves digital natives with an instinctive grasp of mobile and its impact on every aspect of our daily lives.)

Leading digital agencies such as AKQA and Ogilvy, and progressive media owners including the BBC and Sky have long had dedicated mobile teams in place. Now other companies are following their lead, dedicating more resources to mobile or buying in skills as they need them (either because they believe in the true potential of mobile or because they have been pushed into mobile by brands who understand how important it is to engage with consumers on their personal device).

If you doubt that mobile demands experts with a different skills set, then consider the real reason Google acquired AdMob: it’s easier (and cheaper) to buy skilled people than make the investments and risk missing the mobile advertising opportunity altogether.

While many agencies and media companies have a long way to go (and a lot to lose), it is encouraging to see so many brands moving full-steam into mobile and reaping real benefits. The list of successful campaigns is impressive: Guinness with its ‘Passport to greatness’ campaign, British Airways with its ‘Mobile check-in’, HSBC with its ‘Business banking’, Sky with its ‘Remote record’, the BBC with ‘BBC mobile’ and the New York Times with their NY Times iPhone app. It is interesting to note that all these companies have dedicated teams or experienced agencies that understand usability and what makes mobile different. Even if these brands appear to experiment or treat mobile as a separate business, they are serious about mobile’s position as part of the digital marketing mix.

WHERE ARE THE LOCAL CONTENT OWNERS?

Brands are leading (not all – but we have more solid case studies than last year), agencies are learning and everyone else is at least talking.

So, where are the director publishers? They are the only players with content and vast experience in traditional advertising who have yet to make the most out of their digital assets. They should have a natural edge over their competitors, but, as I pointed out in my last column for MSG, they are leaving money on the table.

Indeed, directory publishers are best placed to deliver compelling local mobile services and – importantly – commercialise them through advertising. After all, they have existing customers and a powerful sales force to sell advertising products.

It appears that directory publishers are so focused on the business challenge that they can’t see the opportunity mobile represents. This, unfortunately, leave the  door wide open to Google & Co, companies that “get” mobile and understand the value of listings.

WHAT DO THEY NEED?

To close this gap directory publishers must stop thinking of mobile as a technology and understand it is a utility. The mobile device has evolved into a multifunctional tool. It is our social organiser, our information resource, our boredom filler. Basically, it supports our lives. Directory publishers have content that is a perfect fit provided they also plug it into the equation to simply or enhance our daily routine.

Directory publishers must also acknowledge that mobile comes with a whole set of new rules. Granted, the industry has yet to figure out these rules, but borrowing ideas and approaches from traditional media will not work. A good starting point is to answer three core questions: how are you going to approach mobile?; why is your offer relevant?; and what do you expect a consumer to do?

My takeaway: As a marketing medium mobile is only set to grow in value. Providers that get the basics right and forge partnerships that allow them to unlock the potential of mobile, monetise their digital assets and deliver features that add value to our lives will be well-equipped to compete against rivals and win.

Editor’s note: Martin’s next column will focus on what companies (specifically, local media and directory publishers) should do to deliver contextually relevant mobile advertising based on location.

Martin Wilson has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including leading advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of six mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102).

According to statistics released by Bango, BlackBerry is now the third most popular mobile phone for browsing the web in the USA, accounting for 14% of all mobile traffic. BlackBerry is also placed fifth in the UK and worldwide, above all Apple iPhones, with Nokia remaining the overall global leader with over 36% of traffic seen.

Once seen as only for business with their slick functionality and features, BlackBerry devices are increasingly becoming the preferred handset for consumers wanting to browse the internet from their phone. The BlackBerry 8330 Curve now accounts for over 28% of BlackBerrys browsing the web.

Bango data collected across many millions of users accessing the internet from mobile devices also revealed that the BlackBerry user base is much more likely to use Wi-Fi as a connection method where available.

“With all the buzz surrounding the Apple iPhone and the rush to capitalise on its success, many companies fail to realise that over three times more consumers browse the web from a BlackBerry,” said Ray Anderson, CEO of Bango. “The global smartphone race is well under way, but it is the BlackBerry that is the Usain Bolt out in front.”

Companies are being urged to seize the BlackBerry opportunity and start capitalising on its exponential growth, by ensuring their mobile sites and campaigns are optimised for these devices.

“We see over 30% of users with BlackBerry devices visiting our site each month” said Steve Crawford, Operations Director of GoSpoken.

In the past BlackBerry was primarily seen as an email device, with many of its users dismissing the idea of internet browsing as being something you did from a PC. However as more people choose to access the internet from smartphones – global smartphone sales grew by 27% year-on-year in Q2 (Gartner) and BlackBerry has evolved to provide great internet browsing functionality. It has now gained a reputation for ease of use and addictiveness among business users, with many of the world’s top companies choosing BlackBerry as the corporate phone of choice. With the Curve, BlackBerry has successfully made its popular functionality more accessible to non-business consumers.

I have just been sent over a list of the top 10 things you need to know about mobile applications, compiled by the IAB (Internet Advertising Bureau). I believe they are spot on and typically what I preach as such I felt the need to share:

1. Only do apps when you need more. Compared to browsing, mobile apps offer a richer level of user interaction allowing more complex graphics, media and information to be presented. They also provide a more robust and secure environment for user engagement. But, if you can deliver what you are trying to achieve through a browser you will be able to reach far more consumers. Jeremy Copp, CEO, Rapid Mobile Media Ltd

2. Tell people about your app. Don’t just rely on app stores, you can distribute apps via mobile sites, operators and through multiple ad placements and formats for maximum impact and reach. Theo Theodorou, EMEA Sales Manager, Mobile Advertising, Microsoft Advertising

3. Think further than the iPhone. The iPhone offers fantastic functionality for developers and users alike, and apps developed for the platform are eminently PR‐able, and are often shared virally. It has a fast growing user base, and reaches relatively wealthy 25‐44 year olds who actively use mobile media very well; but also developing a java version, optimised to work over a wide range of handsets including BlackBerry will give you a far greater potential reach. Mark Angell, Business Development Director, Marvellous

4. Getting the balance right. There are 2 fundamental balances to achieve. Firstly, business objectives vs user needs‐for the application to be effective the business needs must carefully consider the user as well as commercial objectives. Secondly, the three E’s (Engagement, Entertainment and Effectiveness) ‐functional apps often outlast the usage of entertainment based apps. Paul Taylor, Strategist & Planner, COI

5. The average app user. There are 8.7 million people who have used a downloaded app in the UK which is 18% of mobile users. 60% of these users are playing games that they have downloaded. The median age of an apps user is 32 years old and 43% are female. 36% of app users own smartphones compared to 15% of the total market. Alistair Hill, Analyst and Mobile Products, Europe, comScore

6. Brand‐building vs sales. Free applications get the most downloads, where as paid‐for applications generate revenue. Knowing whether you are branding or selling is a key point when launching your first application. Ross Butler, Creative, Parrott and Miller

7. Product longevity is essential. Every service needs a roadmap, no matter how basic. Customers will quickly get bored with a uni‐functional app which has no new features or capability added over time. By adding functionality as time goes on you can create brand advocacy. Christian Harris, CEO, Gorilla Box

8. Send them in the right direction. Ads in existing applications are a great place to advertise, but make sure that the destination site is optimised for mobile. If you don’t then you risk low conversion and a poor perception of your brand. Jonathan Abraham, Brand Sales Director, AdMob

9. Test, Test and Test again. If a customer can access it on their handset it needs to work. If it doesn’t it will do more damage than good to your brand. Invite feedback and always read customer reviews (don’t just ask friends to write them!) to ensure you’re meeting the needs of your consumer. Oliver Newton, Head of Emerging Platforms, i‐level

10. Be on brand. Just like with any form of communication ensure that your app is ‘on brand’. Tone of voice, brand values, message, production values and brand fit are essential in making a great brand app. Kieron Matthews, Marketing Director, IAB

Martin Wilson
Managing Director
Indigo 102