Friday, November 16, 2012

The era of mobile, and why advertisers aren't buying

On November 7, I led three sessions at Ad:Tech NY on mobile. You can find two of three presentations I delivered on my Slideshare account here. Because I received so much feedback on these, I decided to share with you the “narrative” that goes with the first presentation. The slides are fine, but obviously miss the context of me talking to them.

Until last month I had the pleasure of being VP, Global Connections at Anheuser Busch InBev, the world’s largest beer brewer. I oversaw all consumer touch points, meaning media, digital, sports & entertainment marketing, CRM, licensed merchandise and the like. This meant that a day could involve negotiations with the world’s soccer governing body FIFA about our World Cup contract, discussions with measurement partners like Syncapse or Marketing Evolution, negotiations with ESPN or Facebook about our global presence, etc.

And yes, somewhere in there we also talked about mobile. With over 1 billion smart phones worldwide, and with countries like Brazil having more phones than people, we can truly say that the phone is now a personal mass medium.

(Photo courtesy of MorgueFile)

And this medium is beginning to represent a significant business, with IAB reporting an increase in mobile generated revenues of 95% to $1.2 billion dollars, and mobile shopping representing $ 580 million in sales value. So many are calling 2012 finally the year of mobile. Some even call it the DECADE of mobile, as consumer penetration has far outpaced Advertiser and Commerce value for a number of years.

Personally, I call this the ERA of mobile, because to me it is less about commercial value or the number of phones sold, or us being smart about how we use this fabulous new touch point as a medium to connect brands with consumers and consumers with brands. It is the ERA of mobile because as consumers we are unhinging ourselves from cables and desks at an unprecedented rate and carry more computing power in our pocket today then we had from our computers not so long ago.

Mobile also shows all sorts of promising qualities for targeting. Obviously certain content will drive certain audiences, but in principle, you can get to all of them through mobile platforms.

During the recent Hurricane Sandy disaster people were scouting their neighborhoods for electricity to charge their devices or to find a wifi or phone signal, indicating their dependence and attachment to mobile as something they can’t do without. Gyms were offering free access to their facilities with “power and shower” access for displaced citizens. So where the basic human necessity used to be shelter and food, today’s requirements are shelter, food and power/wifi.

And because of the rise of multi-tasking, mobile is turning people onto, or perhaps even back to old media like TV, where mobile becomes the new instant water cooler platform for sharing and venting. The same is true for print media, who are discovering new ways to bring quality journalism to audiences, with, apparently, as a positive side effect more engagement for the ads as well.

At the same time, not all is rosy in mobile land. The advertising industry, and especially the kind of advertisers I know best (Fast Moving Consumer Goods companies), who typically have very large budgets at their disposal, have yet to truly understand the mobile opportunity.

According to a study from the CMO council, 37% of advertisers are still evaluating if the medium offers anything of value to them as an advertising medium at all. And just 14% are actually happy with the results from their mobile marketing efforts. Does this mean that General Motors will soon denounce mobile as something that does not work, like they did with Facebook?

Colgate sheds some very honest light on the problem by declaring that it will take time before mobile will be woven into their marketing activities. The publishers are also very honest when they say they still have quite a bit of work to do to sort out their self proclaimed mess. So we are all still very much learning, or as the New York Times put it, re-learning advertising in the Mobile Era.

Today’s Mobile Ad Spend is at $ 2.6 BLN, growing double digit. 

But that is only about 2% of total ad spend. So there is a discrepancy between the mobile world according to consumers and the ad industry.

So here are two reasons why I believe FMCG advertisers are still struggling to understand the mobile marketing opportunity.

1. The industry is incredibly silo-ed

Any large advertiser will brief their campaign to a collection of different agencies: creative, media, digital, PR, perhaps specialist agencies in social, sports marketing, or even mobile. One can argue that advertisers are very much part of doing this to themselves. It means that as an advertiser, you need to direct that very large orchestra of players into playing one and the same tune.

At the same time, all these agencies are all individually peddling their strategies for connecting with consumers, as are mobile ad networks and large mobile players like Google, Facebook and Microsoft. And I haven’t even mentioned traditional media owners with a significant digital play like ESPN, the TV networks or even the NYT.

All of them have shown you slides that state “we are now living in the mobile decade”, that “the time to invest is now”, and “here is how we propose you, the advertiser, should do that”.

So – in your confusion – what do you as advertiser resort to? Numbers!

2. “Show me the data!”

This is perhaps the first and foremost reason: advertisers who ask, nay demand, to see the ROI of mobile to their business.

Never mind that we have lived through decades of TV advertising without the merest of ROI to brand results. That has changed somewhat since the early 2000’s especially thanks to large advertisers such as P&G and Coca-Cola, and smart companies like Marketing Evolution.

But I would like to quote my friend Joseph Jaffe, who when asked by a major advertiser to proof that his proposed digital strategy was going to work, answered by asking if the advertiser had any proof that his non-digital strategy was working. It remained eerily quiet in the room.

I am of course not saying that we don’t need proof. But I don’t think we can single out lack of proof as the main reason why, as Colgate put it, it is taking so long to weave mobile into the fabric of marketing. If mobile marketing represents only 2% of Advertising Budgets, than surely that is not a hugely risky investment. The 2% can be an experiment to learn. Let the 98% do the heavy hitting.

There is also a challenge around defining ROI, and that is whether or not we can agree on the right definition of ROI. And here, we have to accept that the answer is “It depends”… It depends on your category, your brand business objective, your position in the market, your target, etc. I showed this simple construct for ROI objectives in my presentation.

Sadly, it seems that either set of KPI’s are largely ignored in favor of eye ball counting. That to me sounds like the old days of reach and frequency on TV:

As said before, consumers know what they use their mobile device for. It is not a standalone platform, tool or activity. Many activities that start on mobile continue onto other devices, as is shown in this data point from Google’s Multi Screen World research. Equally, the Google study revealed that other journey’s start for instance on a PC and end on mobile. The challenge for advertisers is to offer seamless, easy access, everywhere, at anytime, on any one device. The added challenge is to ensure it is also engaging and offers a true two way opportunity to connect.

So what I would recommend to all people who are working in the mobile sphere is to STOP thinking about it as “mobile”.

I have a rule that any person coming in with a presentation that states something like “mobile”, “mobile strategy” or “mobile plan” has to leave the room. Immediately. Recommending a mobile strategy is about as dumb as saying you recommend having an internet strategy.

As an advertiser or brand, you need to ensure you offer the consumer full access to all of your digital activity through a mobile device. That means that if you plan a website activity, it needs to be fully mobile friendly. If search is part of the plan, it needs to work through any device, mobile included. If you are activating through social media, then functionality and ease of use should have the same low threshold whether it is accessed on a laptop, tablet or mobile phone device.

So that is, to me, the real challenge. Can we move beyond thinking of mobile as a stand-alone silo, and instead think about the desired consumer experience and outcome. The consumer as the starting point to develop Connection Strategies. Mobile included.

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