Note: This article is based on an excerpt from "A Complete Guide to Mobile Marketing for 2014."
With over 75% growth in mobile advertising in 2013 (AdAge Mobile Fact Pack) mobile is no longer an emerging channel. Along with social media, it's become an essential part of every digital marketer's strategy: 2013 was, finally, the year of mobile.
The long predicted shift in the industry occurred as category leadership shifted from pure-play mobile companies to digital media leaders such as Facebook and Google. The launch and huge success of Facebook's mobile advertising, which scaled from zero to a multibillion-dollar run rate was unprecedented. It was clearly the single most important event in mobile advertising during 2013, and it reshaped the mobile ecosystem.
Envisioning the future of the ever-changing mobile marketing industry is certainly challenging. Nevertheless, to guide marketing executives through the 2014 mobile planning process, we at TapSense have outlined what we believe will be the important trends and innovations that marketers will face.
1. Mobile RTB will makes up 45% of all mobile ad buys
Mobile Real Time Bidding (RTB) went mainstream in 2013 with Twitter's acquisition of MoPub, an early leader in mobile RTB technology. In AdExchanger's third quarter 2013 mobile roundup, Mobile RTB was projected to hit 30% by the end of the year. We expect this trend to continue, with RTB comprising 45% of all mobile ad buys at year's end in 2014.
The RTB trend has been around for some time in desktop advertising and promised to deliver more transparency to buyers and better monetization (higher CPMs) for publishers than non-RTB buying. PC ad buyers, however, were slow to adopt RTB, and the results were mixed. In mobile, it's grown rapidly as buyers have embraced this model as the best way to get scale.
Now with desktops and laptop shipments decreasing 14% year over year from 2012, consumers are entering mobile faster than ever before, and it will be up to marketers to adapt their digital strategies accordingly. The primary challenge of this method of buying has been fragmentation, with too many exchanges representing too little inventory. The Twitter acquisition of MoPub, however, promises to bring significant scale to this buying process.
2. Consolidation will continue in the ad network space
The 2013 Millennial Media acquisition of Jumptap signaled a turning point for mobile ad networks. The explosion in mobile ad networks that followed Google's $750 million acquisition of Admob in 2009 has finally come to an end.
The widespread adoption of transparent buying methods like RTB and the growth of large mobile publishers' direct sales teams have greatly reduced the amount of inventory available to ad networks.
The proliferation of options now available to buyers means that more consolidation will happen. Small niche players, particularly in the gaming space, will continue to build their businesses independently. But buyers will quickly find the offerings of large and medium-sized mobile ad networks redundant against the combination of RTB platforms and direct ad sales by big publishers.
3. Email will become a mobile-first channel
Over half of all email is now opened on a mobile device. We expect email will flip from a desktop PC-focused channel to a mobile-first channel in 2014. The amount of email opened on mobile is projected to continue increasing, and the decline in PC sales should accelerate the trend (Gartner: Worldwide PC Shipments in the Third Quarter of 2013 Declined 8.6 Percent).
Some smart marketers are already experimenting with responsive designs for email marketing, optimizing design for the small screens of mobile devices. Expect a big shift in email marketing, where optimization for mobile phones will be prioritized. Driven by the success metrics of email opened on the phone, the PC experience will become a secondary consideration.
4. New mobile ad formats will emerge, including five-second mobile video spots
Facebook's in-stream ads format is just one example of the new types of mobile ad formats that have started to emerge as the industry evolves. Promoted Tweets from Twitter are another example. Expect Pinterest to roll out its own advertising format, which is sure to be readily embraced by marketers, particularly retailers that are already seeing huge success with Pinterest.
On the banner display side, we expect rich media growth to be small. Its implementation costs are high and its effectiveness is questionable. It's unlikely to appeal to marketers outside a small niche of dedicated brand advertisers.
Mobile video formats, however, are ripe for innovation. The days of simply repurposing a 30 second spot for mobile and the Web, just to increase reach, are over. We expect 5-second and 10-second mobile video spots to increase in popularity.
Production costs for video creation continue to fall as the technology evolves. High-quality video production tools now come pre-installed on every laptop, and most smartphones can capture HD video, turning even the smallest marketing department into a TV production studio. The widespread availability of Wi-Fi in most workplaces, cafes, and hotels means mobile ad inventory is regularly available to deliver video ads.
5. Twitter ads will expand to third-party Twitter clients
Nearly 90% of time spent on Twitter in August 2013 was on a mobile device, according to ABC business correspondent NewsDarren Rovell, citing comScore data. Currently, only a few select third-party Twitter clients support Twitter ad formats, including Promoted Accounts, Promoted Tweets, and Promoted Trends (hashtags).
Twitter client apps that have ads include Echofone, HootSuite, Twitterrific, Plume, and, of course, the official Twitter app. Some of those apps have a paid version that removes Twitter ads from the user experience. Twitter ads are not available at all, however, in the following Twitter clients: Twitterific desktop version, Hootie, Tweet Lines, Twidere, and the top-ranked client, Tweetbot.
After the SEC documents detailing Twitter's recent IPO proved the company has not been turning a profit, Twitter will be intently focused on increasing revenue. The immediate solution will be to expand its advertising platform. We have already seen Twitter acquire Tweet Deck, shut it down, and then move its users to the official Twitter app. Twitter will not get into an arms race by trying to acquire any client in its path. Rather, it will work closely with thpse clients and partners to increase the reach of its advertising platform.
Getting ads into Twitter clients will be crucial for Twitter's success. Historically, Twitter's approach to advertising has integrated ads naturally into its content, and that has been well received by users. That relatively positive user experience will serve Twitter well in building advertising partnerships with Twitter clients.
6. Facebook's FBX will go mobile, and it will dominate
On Facebook's last earnings call in July, Sheryl Sandberg, referring to Facebook Exchange (FBX), was quoted as saying, "FBX is actually a very small part of our business." However, that is about to change, and quickly. Analysts at J.P. Morgan have said they believe ad revenue will eventually make up 60% of Facebook's total revenue. For that to happen, Facebook must get FBX into mobile.
Facebook content on mobile devices and PCs display different ads. Distinguishing between the generic ads set up by Facebook Ads on mobile and the more highly targeted ads set up by FBX on the PC is relatively easy. Facebook Ads show ads based solely on friends' "Likes" and other targeting options; accordingly, desktop ads are much more relevant, including retargeting ads for companies with which the user has already interacted online. That's because of the advanced features available through FBX.
We know that users are more likely to engage with content that resonates with them, and given what we know about the increase of mobile app usages, engagement rates increasing, and mobile ad spend increasing, we predict that FBX will go mobile. As users continue to make mobile their device of choice, expect FBX revenues to increase exponentially.
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We expect all marketers in 2014 to significantly increase their investment in mobile, including groups that have not yet fully embraced mobile marketing, such as small businesses and B2B marketers.
The marketing technology has finally caught up with the popularity of mobile devices, and marketers will find significant ROI from mobile marketing in 2014.
Continue reading "Six Trends for 2014 in Mobile Marketing and Advertising" ... Read the full article
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