Mobile advertising

Not to be confused with Mobile billboard.

Mobile advertising is a form of advertising via mobile (wireless) phones or other mobile devices. It is a subset of mobile marketing.

It is estimated that mobile app install ads accounted for 30% of all mobile advertising revenue in 2014, and will top $4.6bn in 2015, and over $6.8bn by the end of 2019. Other ways mobile advertising can be purchased include working with a Mobile Demand Side Platform, in which ad impressions are bought in real-time on an Ad exchange.

Overview

Some see mobile advertising as closely related to online or internet advertising, though its reach is far greater — currently, most mobile advertising is targeted at mobile phones, that came at an estimated global total of $4.6bn as of 2009. Notably computers, including desktops and laptops, are currently estimated at 1.1 billion globally. Moreover, mobile advertising includes SMS and MMS advertising units in addition to the advertisement types served and processed via online channels.

It is probable that advertisers and media industry will increasingly take account of a bigger and fast-growing mobile market, though it remains at around 1% of global advertising spend. Mobile media is evolving rapidly and while mobile phones will continue to be the mainstay, it is not clear whether mobile phones based on cellular backhaul or smartphones based on WiFi hot spot or WiMAX hot zone will also strengthen. However, such is the emergence of this form of advertising, that there is now a dedicated global awards ceremony organised every year by Visiongain.

As mobile phones outnumber TV sets by over 3 to 1, and PC based internet users by over 4 to 1, and the total laptop and desktop PC population by nearly 5 to 1, advertisers in many markets have recently rushed to this media. In Spain 75% of mobile phone owners receive ads, in France 62% and in Japan 54%. More remarkably as mobile advertising matures, like in the most advanced markets, the user involvement also matures. In Japan today, already 44% of mobile phone owners click on ads they receive on their phones. Mobile advertising was worth 900 million dollars in Japan alone. According to the research firm Berg Insight the global mobile advertising market that was estimated to €1 billion in 2008. Furthermore, Berg Insight forecasts the global mobile advertising market to grow at a compound annual growth rate of 43 percent to €8.7 billion in 2014.

In 2013 "State of Mobile Advertising Report" by Opera Mediaworks, it is reported that mobile advertising is growing globally at a rapid rate. Rich media ads are now averaging a 1.53 percentage click rate among users. In-App large banner ads are still the most popular, but they are on the decline. In July 2014 Facebook reported advertising revenue for the June 2014 quarter of $2.68 billion, an increase of 67 per cent over the second quarter of 2013. Of that, mobile advertising revenue accounted for around 62 per cent, an increase of 41 per cent on the previous year.

Types of mobile ads

In some markets, this type of advertising is most commonly seen as a Mobile Web Banner (top of page) or Mobile Web Poster (bottom of page banner), while in others, it is dominated by SMS advertising (which has been estimated at over 90% of mobile marketing revenue worldwide). Other forms include MMS advertising, advertising within mobile games and mobile videos, during mobile TV receipt, full-screen interstitials, which appear while a requested item of mobile content or mobile web page is loading up, and audio advertisements that can take the form of a jingle before a voicemail recording, or an audio recording played while interacting with a telephone-based service such as movie ticketing or directory assistance.

The MMA (Mobile Marketing Association) and the IAB (Interactive Advertising Bureau) has published mobile advertising guidelines, but it is difficult to keep such guidelines current in such a fast-developing area. The fifth version of mobile advertising guidelines composed by the MMA includes the following types of mobile ad units:

• Mobile Web Advertising Units:
  • Mobile Web banner Ad;
  • Rich Media Mobile Ad (RMMA);
  • WAP 1.0 Banner Ad;
  • Text Tagline Ad.
• SMS Advertising Units:
  • Initial SMS Ad (Appended) – contains the primary, non-advertising portion of the message, and is typically 20-60 characters long;
  • Complete SMS Ad (Full Message) – has a length of up to 160 characters and is typically delivered as a reply to an Initial SMS Ad or “Text (keyword) to (short code)” call-to-action.
• MMS Advertising Units:
  • MMS Short Text Ad – is typically appended to the content (or body) portion and contains the primary, non-advertising content of the MMS slide;
  • MMS Long Text Ad – fills all of an MMS slide and can contain a clickable link;
  • MMS Banner Ad – a color graphics ad unit displayed at the top or bottom of an MMS;
  • MMS Rectangle Ad – a color graphics ad unit that fills all of an MMS slide;
  • MMS Audio Ad – an audio clip that is played while an MMS Rectangle Ad or an MMS Full Ad is displayed.
• Mobile Video and TV Advertising Units:
  • Billboard – an advertising image shown before the video;
  • Pre-Roll, Post-Roll and Mid-Roll Units – short promotional videos play before, after, or in the middle of the video content;
  • Bumper Ad – short promotional videos (typically a flash video file) that plays before or after other content associated with the player or video (which means it has greater playback priority than pre-rolls);
  • Book Ending Ad – typically a combination of a pre-roll ad and a bumper ad that appears after the video content;
  • Overlay Ad – still image or an animation with a semi-transparent background that is displayed over the video content;
  • Companion Ad – still image or an animation that is displayed alongside the video content.
• Mobile Application Advertising Units:
  • In-App Display Advertising Units:
    • Mobile Application Banner Ad;
    • Mobile Application Interstitial Ad;
    • Rich Media Mobile Ad (RMMA);
  • Integrated Ad (also referred to as Native Ad) – an ad unit designed to resemble the elements of the app in terms of visual appearance and usage context;
  • Branded Mobile Application – an application specifically developed by an advertiser and uploaded to an app store;
  • Sponsored Mobile Application – a publisher’s downloadable application which features a sponsoring arrangement at various places across the application.

The effectiveness of a mobile media ad campaign can be measured in a variety of ways. The main measurements are impressions (views) and click-through rates. They are also sold to advertisers by views (Cost Per Impression) or by click-through (Cost Per Click). Additional measurements include conversion rates, such as click-to-call rates and other degrees of interactive measurement.

Mobile media can run on a mobile web page or within a mobile application, often referred to as in-App.

One of the popular models in mobile advertising is Cost Per Install (CPI) where there the pricing model is based on the user installing an App on their mobile phone. CPI Mobile Advertising Networks work either as incent or non-incent. In the incent model the user is given virtual points or rewards to install the game or App. The industry is slowly moving away from the CPI model and to a Cost Per Action (CPA) or Cost Per Event (CPE) model, demanding more from the ad network, boosting retention/engagement rates of apps. This inherently means that ad networks would only get paid if a user completes a specific event. To track this data most apps have some form of marketing SDK installed on their app. This not only tracks installs and user activity, but also attributes the data to a specific ad network.

Mobile Rich Media

In addition to standard mobile display banners, a growing trend is to include rich media execution within the banner ads. This includes banners that would expand to a larger size, offering advertisers a larger display to communicate their message. Games within the banner to make the experience more interactive or a video within the banner space.

There are limitations to rich media on mobile because all of the coding must be done in HTML5, since the iOS does not support flash.

Handsets display and corresponding ad images

There are hundreds of handsets in the market and they differ by screen size and supported technologies (e.g. MMS, WAP 2.0). For color images, formats such as PNG, JPEG, GIF and BMP are typically supported, along with the monochrome WBMP format. The following gives an overview of various handset screen sizes and a recommended image size for each type.

Handset	Approx Handset Screen Size (px W x H)	Example Handsets	Ad Unit	Ad Size (pixels)
X-Large	320 x 320	Palm Treo 700P, Nokia E70	X-Large	300 x 50
Large	240 x 320	Samsung MM-A900, LG VX-8500 Chocolate, Sony Ericsson W910i	Large	216 x 36
Medium	176 x 208	Motorola RAZR, LG VX-8000, Motorola ROKR E1	Medium	168 x 28
Small	128 x 160	Motorola V195	Small	120 x 20

Source: Mobile Marketing Association

History

Martin Cooper invented a portable handset in 1973, when he was a project manager at Motorola. It was almost three decades after the idea of cellular communications was introduced by Bell Laboratories. Two decades later, cellular phones made a commercial debut in the mass market in the early 1990s. In the early days of cellular handsets, phone functionality was limited to dialing, and voice input/output.

When the second generation of mobile telecoms (so-called 2G) was introduced in Finland by Radiolinja (now Elisa) on the GSM standard (now the world's most common mobile technology with over 2 billion users) in 1991, the digital technology introduced data services. SMS text messaging was the first such service. The first person-to-person SMS text message was sent in Finland in December 1994. SMS (Short Message Service) gradually began to grow, becoming the largest data service by number of users in the world, currently with 74% of all mobile subscribers or 2.4 billion people active users of SMS in 2007.

One advantage of SMS is that while even in conference, users are able to send and receive brief messages unobtrusively, while enjoying privacy. Even in such environments as in a restaurant, café, bank, travel agency office, and so on, the users can enjoy some privacy by sending/receiving brief text messages in an unobtrusive way.

It would take six years from the launch of SMS until the first case of advertising would appear on this new data media channel, when a Finnish news provider offered free news headlines via SMS, sponsored by advertising. This led to rapid experimentation in mobile advertising and mobile marketing, and the world's first conference to discuss mobile advertising was held in London in 2000, sponsored by the Wireless Marketing Association (which later merged into the Mobile Marketing Association). The first books to discuss mobile advertising were Ahonen's M-Profits and Haig's Mobile Marketing in 2002. Several major mobile operators around the world launched their own mobile advertising arms, like Aircross in South Korea, owned by the parents of SK Telecoms the biggest mobile operator, or like D2 Communications in Japan, the joint venture of Japan's largest mobile operator NTT DoCoMo and Dentsu, Japan's largest ad agency.

Mobile as media

This unobtrusive two-way communications caught the attention of media industry and advertisers as well as cellphone makers and telecom operators. Eventually, SMS became a new media - called the “seventh mass media channel” by several media and mobile experts - and even more, it is a two-way mobile media, as opposed to one-way immobile media like radios, newspapers and TV. Besides, the immediacy of responsiveness in this two-way media is a new territory found for media industry and advertisers, who are eager to measure up market response immediately. Additionally, the possibility of fast delivery of the messages and the ubiquity of the technology (it does not require any additional functionality from the mobile phone, all devices available today are capable of receiving SMS), make it ideal for time- and location-sensitive advertising, such as customer loyalty offers (ex. shopping centres, large brand stores), SMS promotions of events, etc. To leverage this strength of SMS advertising, timely and reliable delivery of messages is paramount, which is guaranteed by some SMS gateway providers.

Mobile media has begun to draw more significant attention from media giants and advertising industry since the mid-2000s, based on a view that mobile media was to change the way advertisements were made, and that mobile devices can form a new media sector. Despite this, revenues are still a small fraction of the advertising industry as a whole but are most certainly on the rise. Informa reported that mobile advertising in 2007 was worth $2.2 billion. This is less than 0.5% of the approximately $450 billion global advertising industry.

Types of mobile advertising are expected to change rapidly. In other words, mobile technology will come up with a strong push for identifying newer and unheard-of mobile multimedia, with the result that subsequent media migration will greatly stimulate a consumer behavioral shift and establish a paradigm shift in mobile advertising. A major media migration is on, as desktop Internet evolves into mobile Internet. One typical case in point is Nielsen’s buyout of Telephia.

However it should be kept in mind that the rapid change in the technology used by mobile advertisers can also have adverse effect to the number of consumers being reached by the mobile advertisements, due to technical limitations of their mobile devices. Because of that, campaigns that aim to achieve wide response or are targeting lower income groups might be better off relying on older, more widespread mobile advertising technologies, such as SMS.

Viral marketing

As mobile is an interactive mass media similar to the internet, advertisers are eager to utilize and make use of viral marketing methods, by which one recipient of an advertisement on mobile, will forward that to a friend. This allows users to become part of the advertising experience. At the bare minimum mobile ads with viral abilities can become powerful interactive campaigns. At the extreme, they can become engagement marketing experiences. A key element of mobile marketing campaigns is the most influential member of any target audience or community, which is called the alpha user

Privacy concern

Advocates have raised the issue of privacy. Targeted mobile marketing requires customization of ad content to reach interested and relevant customers. To customize such behavioral personal data, user profiling, data mining and other behavior watch tools are employed, and privacy advocates warn that this may cause privacy infringement.

Some mobile carriers offer freebie or cheaper rate plans in exchange for SMS or other mobile ads. However, mobile TV and mobile search may override this privacy concern, as soon as they are implemented on a full-blown basis. In a naive way to override privacy concern, however, User’s prior consent needs to be obtained through membership to join or User account to set up. Both mobile TV and mobile search may supersede the way of getting Users’ prior consent through membership or User account because users are free to choose mobile TV channels or mobile search services on a voluntary basis.

Interactivity

Mobile devices aim to outgrow the domain of voice-intensive cellphones and to enter a new world of multimedia mobile devices, like laptops, PDA phones and smartphones. Unlike the conventional one-way media like TV, radio and newspaper, web media has enabled two-way traffic, thereby introducing a new phase of interactive advertising, regardless of whether static or mobile. This user-centric approach was noted at the 96th annual conference of Association of National Advertisers in 2006, which described ”a need to replace decades worth of top-down marketing tactics with bottom-up, grass-roots approaches”. Many use 2d bar codes to make offline print material more interactive with their mobile device. This has been proven to be successful in Japan, UK, Philippines and has been catching on in Northern America.

Mobile device issues

Coincidentally, however, mobile devices are encountering technological bottlenecks in terms of battery life, formats, and safety issues.

In a broad sense, mobile devices are categorically broken down into portable and stationary equipment. Technically, mobile devices are categorized as below:

• Handheld [portable]
• Laptop, including ultraportable [portable]
• Dashtop, including GPS navigation, satellite radio, and WiMAX-enabled dashtop mobile payment platforms[fixed on dashboards]

The battery life and safety issues will perhaps combine to eventually push mobile equipment’s inroads into vehicle dashtops. However, satellite-based GPS navigation and satellite radio may already hit a snag because of their part-time usage and technological hierarchy. Put differently, people want more functions than GPS navigation and satellite radios. The trend indicates an ongoing convergence into all-in-one dashtop mobile devices incorporating GPS navigators, satellite radios, MP3 players, mobile TV, mobile Internet, MVDER (vehicle black box), driving safety monitors, smartphones and even video games.

External links

• Association of National Advertisers
• “Letting Consumers Control Marketing: Priceless”