xAd: 2014 Mobile Advertising Predictions
xAd | 01/02/2014
When we think about predictions for 2014 in the mobile ad space, we’ll forego mention of ideas and forecasts such as, “greater consolidation,” “continued mobile adoption,” etc. – those are simply givens. As with any rapidly expanding industry, the mobile space will inevitably witness business shake ups, expansions and consolidations, as we did in 2013. Also this past year, we saw equal share of mobile and desktop media consumption by U.S. consumers for the first time in mobile’s existence (according to eMarketer). As this trend continues, we will welcome a particularly historic moment in mobile this year. 2014 will be the year when mobile officially overtakes online in U.S. consumer media consumption. That is not a prediction, but a fact.
With these facts in mind – and many more – we can confidently forecast continued expansion in mobile data, shifts in media spend, and greater focus on innovation and performance.
Data is an essential element of the consumer path to purchase. As brands mature in the space, they are moving beyond consumer engagement when they are in a defined “fence” near brick and mortar locations, but they are looking to begin that conversation where the consumer is before and after they come through their door. This is where mobile data precision will play a key role, allowing for the continued optimization of dynamic, relevant messaging, throughout the entire purchase journey. And as the ingestion of accurate mobile data becomes a competitive necessity in all aspects of mobile technology, first party data will take center stage as the be-all-end-all.
Measurement is another area that will benefit from additional focus on mobile data innovation and precision. As marketers start to better understand the unique value of mobile, Click Through Rates (the de facto measuring stick) will come up against increased scrutiny and devaluation. Why? Because mobile technology affords much deeper and more insightful methods of measuring consumer engagement – from secondary action rates, to more recent innovations such as in-store visitation lift – mobile measurement technologies will continue to evolve, focusing on the context of location and consumer behavior.
As location intelligence further unlocks the insights of mobile consumer behavior, advertiser focus will become even more granular, shifting to “last mile” integrations. That is, planning for tracking and driving the consumer journey all the way down to the store aisle. The goal of aisle-level targeting will be to enhance the in-store experience and close the consumer purchase loop. Of course, at this level of granularity, the question of scale will eventually crop up. But as location data accuracy increases, and new and more granular mobile data sources become abundant, opportunities for micro-fencing at scale can be realized.
Programmatic ad buying has been steadily adopted over the last few years, with desktop display starting to fully embrace real-time bidding and automated buying. Now it’s mobile’s turn. Programmatic’s biggest hurdle was consumer trust and acceptance, but now with more than 62% of the U.S. population (and growing) owning smartphones we can expect heavy mobile adoption in the coming year. Programmatic buying offers the scale that advertisers and agencies are looking for as the market continues to consolidate and the latest technologies are sought.
Less of a prediction and more of a point of intrigue. Will CPMs rise as technology continues to become more refined and proven? Or, decline as the competition heats up and marketers seek to achieve greater campaign ROI with payment models including Cost Per Call and Cost Per Navigation? As brands mature in the space and better understand their own unique and most valuable KPIs, a shift in payment models will surely come.
While many industry pundits are touting the year of wearable devices, it’s clear we are not there yet from an advertising stand-point. While it’s fun to get carried away with the speed of technology and “the next big thing”, let’s not forget the opportunities still untapped in mobile advertising. The iPhone is merely 6 years old, tablets a little over 3 years old, and the mobile media ecosystem is still in innovation and precision mode. The buzz is over. The audience is here. The dollars are here. 2014 is when we’ll start to see smarter applications of the technology – that’s when the real fun begins.