Digital Advertising

The Mobile Revolution…Make that “Evolution”

Photobucket's David Toner While, as we’ve heard before, consumers increasingly live their digital lives on mobile devices, so marketers must also re-think, re-define or even dismiss tried-and-true strategies to meet consumers where they are and when they’re ready to hear from them.

The writing has been on the wall for a while. It comes as no surprise that consumer habits are moving from the desktop to mobile devices. But what does this mean for the digital ad business in general? We must reinvent how we approach consumers.   The good news is, we have new tools at our disposal to do so too.

Video to the Rescue!

While Facebook initially was well positioned to serve targeted, relevant advertising to an engaged, Timeline-consuming audience, that is not enough anymore.  Showing regular, static ads to promote apps and games no longer cuts through the clutter and incites action. But with the recent announcement of  its video ad initiative (complete with broadcast rates!), it revealed that users will start seeing video ads on their desktop AND mobile devices. Why?  Well of course.. to increase the success rate for marketers. Videos, as we know, are more compelling than mere text or still pictures.  Sight, sound and motion drive engagement—and action.

“Potential customers will be able to click play to watch a video featuring your mobile app before installing the app,” Facebook’s Radu Margarint posted. “Video creative has proven to be an effective way to drive engagement in News Feed, and we look forward to helping developers use their video creative to find new app installs.”

The learning here is that video ads on the mobile screen can demand premium rates because they result in increased response.  And with that simple insight, Facebook is figuring out how to do mobile right.

Facebook and Mobile, Take Two

Facebook Mobile first emerged in 2006. But Facebook didn’t launch its first mobile ad product until the summer of 2012. Nonetheless, the social network has proven itself to be highly adept at doing mobile well.  And now, doing mobile monetization well.  The proof is in the pudding: Forty-one percent of Facebook’s $1.6 billion revenue in the most recent quarter came from mobile ads—which, incredibly, didn’t exist just a year ago. The company is now looking for other ways to make mobile ads actionable and turn them into purchase opportunities. For example, the company is set to offer free wi-fi for check-ins. As a result, brands and retailers will be able to make special offers to consumers literally where they are and in the moment of purchase.

And Now Google

The Google ad business, aka the money-printing arm of the search giant, has dominated the world of online ads for ten years. But as consumer habits move to mobile devices, Google knows it must stay current with user behaviors. Not even the monolith that Larry and Sergei built is immune from this cultural shift, and they admitted as much in their last earnings call. Google knows that it will have to serve more mobile ads with each coming quarter.  And that, as a result, it will make less money on average from each ad than it used to.  It knows that mobile ads are cheaper since they don’t have the same success metrics as regular online ads, which explains why its cost-per-click fell 8% from a year earlier.  And so, they are focused on figuring out how to evolve their ad offering to maximize return within this new reality.

Leading the Way in a Brave New World
In response to all of this consumer change, Google is adapting how it interacts with online ad buyers. In effect, buyers will be stripped of the ability to target ads at either desktop, tablet or smartphone users exclusively.  Now buyers will have to buy all three together.  Mobile is an integral part of the consumer experience and now it must be an integral part of the marketer experience too.

As the industry struggles to figure out ways to address quickly shifting behavior, Larry Page and his ad mavens are testing and trying to find solutions. And once they start to figure out mobile, there will inevitably be new screens and platforms to address next.  How will they take advantage of wearable technology?  How will marketers be able to play a role with Google Glass and other technology innovations that originate at their campus?  Well, that’s the next chapter.

Whither Everyone Else

While Facebook and Google are leveraging their huge mobile audiences and related insights, and innovating as they go, they are also leaving opportunities for insurgents to steal some ad dollars in this increasingly mobile-driven ecosystem.  And those that evolve fastest and most creatively will thrive. There are emerging mobile platforms today which enable advertisers to serve integrated rich media units combining photos, videos, text and even user contributions to drive deep engagement and contribution while consumers are on the go.

The idea of serving a Starbucks coupon as a consumer passes the next coffee shop has been hyped for a decade but has yet to come to pass. Now it seems it will be upon us sooner rather than later. Rather than applying direct marketing principles, mobile provides a new platform to engage, inspire and motivate consumers to build brand loyalty and drive response in the moment. By leveraging new ad units, addressable audiences, and engaging and interactive content, mobile provides a compelling, new platform for ad innovators and brands to collaborate and create.  So let’s get going.

David Toner is VP Marketing at Photobucket, one of the world’s leading dedicated photo and video sharing services. Look for his column every fourth Tuesday on The Makegood.