When consumers are heading to their local pharmacies, GlaxoSmithKline wants its new Tums Freshers to be on their radars--or, more precisely, their mobile devices. So the consumer health care products giant has launched a mobile ad for the antacid-with-breath freshener, complete with a coupon, for the iPad and iPhone.
“It was an opportunity to recognize how our consumers were using technology and help them understand our product offerings better. When they’re in the marketplace shopping, they’re leveraging these devices, so we are with them along the path to purchase,” explained Scott Grenz, media director for North America and Latin America at GSK, in an interview with CMO.com. “That’s how we think about the consumer journey, and mobile is one tool to help them along the way.”
With some 243 million Americans--or 77 percent of the U.S. population--expected to own mobile phones by year’s end, according to eMarketer, mobile advertising is the next logical place for companies to spend ad dollars. To be sure, they are taking note: eMarketer is projecting U.S. mobile display ad spending, which includes spending on banner and rich media ads, will grow 93.5 percent to $861.7 million in 2012, up from $445.4 million in 2011. Spending on mobile video advertising will grow an estimated 122 percent to $151.5 million this year, compared to $68.2 in 2011.
“No longer are consumers waiting until they are back at a home computer to make plans, buy products, and connect with friends--instead, consumers are reaching for their smartphones to take action right in the moment,” according to eMarketer’s July 2012 Mobile Roundup report. And a spring 2012 study by the Pew Research Center’s Internet and American Life Project found that smartphone and mobile device users are entering a new “culture of real-time information seekers and problem solvers.”
That’s what GSK is banking on. The company worked with multiscreen advertising technology provider YuMe, whose clients include Elizabeth Arden and American Greetings, and ad agency PHD to create a mobile “flip” ad that launched in July. The ad is “user-controlled,” enabling users to change what they’re seeing, said Kelley Train, group digital director of PHD, in an interview with CMO.com.
“That’s adding value and gets your attention, and having that ability within the video to swipe it and halt it is attractive because users are in control of the ad and are engaged with it how they want to be,” she explained. “They can find more information when they want to. When they’re in control, they’re even more engaged, and then they can go back to the ad.”
Added Grenz: “We’re giving them information within the ecosystem they’ve chosen. It’s interruptive, but on the user’s terms.”
Missing The Mobile Boat?
Given the explosion in growth in both phone and tablet usage, marketers who aren’t optimizing their ad budgets and spending on mobile, period, are missing the boat, according to Greg Stuart, president of the Mobile Marketing Association (MMA), a global trade group representing marketers, agencies, and media sellers.
“Anywhere consumers spend time …. that presents, obviously, a big opportunity for marketers,” he told CMO.com. “They’re missing a big opportunity because the analysis shows if marketers can allocate more dollars to mobile … their campaigns will produce better results, whether they be brand increases or sales results. There’s no question about that.”
Drilling down within mobile, digital ad spending on tablets was found to be particularly effective in the first and second quarters of 2012, generating higher conversion rates and ROI than spend on PCs and smartphones, according to Adobe Digital Index’s Q2 Global Digital Advertising Update. Across industries, overall tablet conversion rates were about 20 percent higher than those of PCs. And smartphone conversion rates were significantly lower across the board--about 42 percent lower than PC conversion rates, the Adobe update found.
Still, Dr. Sid Shah, director of business analytics for media and advertising solutions at Adobe Systems, anticipates greater smartphone adoption for e-commerce as well as tablets--and therefore ads--within three to five years. “In this multiclick, multidevice world, [advertisers] have to understand the implications,” Shah told CMO.com. “Smartphones have a role to play; they’re in a research and awareness phase, where desktops and tablets are more in a conversion phase with better form factors to finish the purchase.”
Similarly, MMA’s Stuart said mobile ads need to be created for both types of devices. Retail is one vertical industry that has already taken note and is an early adopter, according to the MMA, along with automotive and pockets of CPG companies.
Mobile pop-up ads are the only negative Stuart said he sees turning consumers off. “It behooves the industry to treat the consumer with respect. We should not do what happened in the Internet business, which were [the use of] pop-ups because those were clearly irritating,” he said.
Rebecca Lieb, an analyst covering digital advertising and media at The Altimeter Group, isn’t so sure the interruptive approach is the most effective way to reach consumers, either. Lieb thinks brands “are probably better off using earned media,” which is social media that ranges from comments and reviews about the brand on social platforms. She also believes users will be more receptive to owned media, which is an ad unit that isn’t as interruptive as advertising, because they have to be following the brand.
“I do think that the less interruptive, banner-type advertising is the way to go on mobile,” she said. “There is simply not a lot of room for ad units, and mobile is very lean forward, not lean back, like a computer can be,” with users tending to do more directional, focused tasks, such as checking the weather or a sports score on a mobile device. “You don’t want your battery to run out or go over your bandwidth allocation. There’s a higher potential consumer cost.”
The limited screen real estate on mobile devices also needs to be considered, particularly the vast differential between a tablet screen and a smartphone screen, she added. “So where you might have room for a banner on an iPad, you might not on a BlackBerry,” Lieb said.
But even among tablets, there are many considerations for advertisers, Lieb said. “There is a world of difference between an e-reader and an iPad, and even the old Kindle and new Kindle. So when you’re talking about ads on mobile devices, you’re talking about such a wide range of real estate, capabilities, and platforms that it almost boggles the mind,” she said. Just as there were format wars between VHS and beta, and eight-track and cassette, Lieb pointed out, mobile has the same challenge; with different mobile formats, including iOS, Symbian and Android, “it’s pretty complicated out there.”
Lieb predicted the immediate future for what she calls effective mobile advertising “is going to be a hybrid of paid and earned media. I think that just pure mobile advertising--‘buy this now’--is pretty ineffective for most mobile users in most situations.” While mobile shopping is increasing, tasks like buying a bathing suit is not something most people would think of doing on their smartphones unless the advertisers can get geo-specific enough to know a consumer is in a bathing suit store right then, she said.
Other forms of advertising on mobile devices, like couponing, Lieb said, can be very effective, as well as check-ins on sites such as Foursquare, which are more promotions-based. For example, Foursquare recently introduced proximity sponsorships, she noted, so that if a consumer is eating near a McDonald’s, he might receive a mobile coupon. “But if Foursquare knows I only check into macrobiotic restaurants and Whole Foods, that’s not going to be effective,” Lieb observed. “So proximity is a strong indicator of effectiveness, but it’s not the only one, and it can be misleading.”
For Stuart, getting bullish on mobile ads is pretty cut and dry. “Same budget, better results. It’s that simple. You are guaranteed better results by aligning the marketing mix to consumers changing media habits,” he said.
Even Lieb conceded: “There will always be advertising where there are eyeballs.”