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

July 25th, 2008
By: admin

1151236941 e9730fdda5 b 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.

  • Helge Tennø

    Hi Adrian
    I am very happy to inspire you a bit back as well. :o)

    Here’s what I’m thinking. The future of mobile/handsets in marketing, two things:

    1. Pervasive communication
    (Defined by Nokia, http://www.experientia.com/blog/nokia-research-on-the-internet-of-things-officially-begins/)

    Mobile handsets will be the remote that will make the physical world as interactive as the digital world is today.
    http://www.lunchoverip.com/2007/12/a-designer-at-t.html

    This will happen through conscious (we actively use the handset to interact) and unconscious (the handset communicates with the environment automatically) interaction.

    Conscious interaction:
    http://www.vimeo.com/1308073

    And this is how I think “subconscious interaction” will happen:

    The handset will through accessing our profiles and histories on social networks (and other databases accessibly via the net) and recorded information from “real”-world activities (as you mention in the blog), gain an immense understanding about us and can use this when talking to the environment and adapting it to our preferences.

    This can be something useful as adjusting the light when entering a tunnel (because we know you are vision impaired). Altering the colors on signs (because we know you are colorblind) or adjusting the volume on the McDonalds Drive-through speakerphone (Because we know you are hard of hearing).

    But it can also be used extensively in marketing….

    The second thing..

    2. Services / Content Marketing
    It’s what we’ve all been discussing for the last 8 months or so. Creating added value for the brand through experience based content and services – a lot of these will be made accessible for the brand participant through the handset.

    Nike Plus (and MiCoach) has been used extensively as an example, but also stuff like CommSec’s trading platform for the iPhone or Carlings iPint.
    https://www.comsec.com.au/
    http://www.youtube.com/watch?v=A3MfQIswl3k

    The big thing is though, that we mustn’t think how to use the mobile to extend the arm of interruption based or “traditional” advertising, but think how we can use it in order to create additional value and meaning for the brand. This is the next generation of 1:1 marketing, but this time let’s stop thinking about subscription-based information and start thinking about services and value adding experiences.

    … and that is why Ethnography and Activity-Based-Targeting might/should definitely become increasingly more important and prominent in advertising and marketing.

    (sorry about the long comment, got very eager :o)

  • Adrian

    Absolutely agree Helge, and I love your examples. The phone ushers in the possibility of a new creative revolution in marketing. I can’t wait.

  • curiouslypersistent

    Great post – and on a similar them to Jan’s recent musings

    Advertising at the point of purchase will be limited to those that a) check their smart phones regularly or b) opt into alerts, but there are fantastic possibilities for after the event follow-ups.

    And, assuming people opt in, the combination of the geo-data of smart phones and online behavioural tracking (such as phorm) takes us closer to the holy grail :-)

    Simon

  • David Esrati

    Adrian-
    The ad server is already here- it’s Google. And- your profile is being established by the searches you do, and through gmail by the e-mails you send and receive, and google checkout in what you buy- and then to your smart phone on where you are.
    You will be constantly asked to make a conscious decision on how much information you are willing to trade for access to things you need.
    ie. I’m in the market for a car- I’ll look at your ad, if you’ll pay for my next 3 movies from unBox or NetFlix.
    Your phone will eventually be your digital passport to advertising.
    The NYT reader has a single ad at the bottom of the page- as it is now, it’s not geotargeted or ethnographically geared- but, soon- very soon- it will be.
    Because as you pointed out- spending $10,000 per customer to sell a $50,000 car just is plain NUTS.
    Where this becomes even more critical is for small local businesses who can’t afford or need “mass communications”- and have to rely on social networks and geo-aware devices to funnel the customers to them.
    Apps like Yelp, UrbanSpoon and Google Local will be their only hope.
    I’ve been planning an essay on much of the same- thanks for helping me solidify my thinking.

  • David Esrati

    I just realized I did this post after the iPhone announcement and before it shipped (version 1) that predicted much of this:
    http://www.thenextwave.biz/tnw/?p=274
    This was before the apps store- and before anyone had touched one.

  • http://finalburp.wordpress.com Stefano Augello

    David,

    I’m not sure this is really how it’ll work, because:

    1) Not everything goes through Google. Just to give an example, Google is biased against innovations: when they have a need, people don’t google the need, but rather the solution that they have in mind already, thus leaving little room for innovation. (ie. though consumers buy the whole, they still google “drill”)

    2) If you have to pay me (with a movie) for me to watch your ad, you can rest assured that I won’t pay much attention to it

    But I agree that mobile phones will increasingly change our lives.
    And, incidentally, the way we do business.