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Prediction: mobile phones will be the center of ad campaigns in the future.

From the Flickr of Steve Rhodes

As you may have read, I’ve been thinking about targeting a fair amount lately. A comment by Helge in a recent post helped crystallize my thinking.

He says: “I went to a conference this April and three of the speakers (Research and Marketing firms) there were all commenting on this same thing (failure of traditional targeting models). What they where seeing from their research is that people are bound to ACTIVITIES, not demographically (or otherwise) defined target groups.”

Activity-based targeting is fantastic on the web where lots and lots of data exist about what an individual is doing at that particular moment, but it fails in the real world because there’s really no way of knowing what someone is doing at any given time – and if they’re sitting in front of the television, they’re probably doing about 16 things – not too helpful.

However, the spread of smartphones is set to change this. I wrote a while ago about how a phone like the iPhone is a human-to-digital interface. It can essentially be thought of as a tracking mechanism that translates all of your activities into a digital form, generating incredibly useful (and personal) data which can then be spliced together with other data streams and manipulated by other applications and services.

Instead of guessing that you might be in the market for a new television, your mobile phone could essentially broadcast that you have searched for a television several times in the past and are now in a Best Buy. Let’s say there were an entity who controlled the vast majority of mobile phone advertising inventory, it might actually be possible for an advertiser like Sony to buy all people who fit the above profile and deliver targeted advertising at the exact point where it is most useful and impactful.

To give you an idea of how game-changing this is, I worked on a performance car account at Fallon where we calculated that there were only 2000 potential customers, ready to purchase at any given point in time. These were the people who’d be most swayed by a price/lease offer, however we spent tens of millions on television advertising during a 4 week period in order to reach them. Essentially, we spent somewhere in the region of $10,000/customer. It’s easy to see how this could be reduced by 2 or 3 orders of magnitude AND deliver more accurate leads through targeting the right activities on mobile phones.

This is why I think it is inevitable that mobile phones are going to be the dominant platform for advertising. Any marketer who is concerned with what they’re getting for their money will start by creating the right mobile advertising program and think about other channels next. Hopefully this will start to drive the kind of innovation needed in mobile advertising to move the industry beyond the all too typical promotional SMS campaigns that dominate now.

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