You want to know what’s hot in the world of online marketing today? I’ll tell you what’s hot – mobile marketing. How do I know? I read TechCrunch, whose writers are in a tizzy over Square and Google Wallet and the latest mobile game site. I listen to Google reps, who tell me that 17% of their page views in 2012 will be mobile and that 35% of Americans use their mobile device while in the bathroom. I go to conferences, where mobile sessions are packed to the gills and normal SEM sessions are relegated to a far corner near the janitor’s closet.
Indeed, the growth of mobile marketing spend is impressive. Just a few days ago, eMarketer released a study suggesting growth from a mere $1.2B this year to $4.4B by 2015:
But let’s step back for a minute and think about this. While it’s true that mobile is growing quickly, compared to SEM spend, mobile advertising is but a drop in the bucket. Indeed, Forrester projects SEM to weigh in at $30.4B of spend in 2015, compared to a projected $7B for mobile (clearly, no one can agree on how much mobile will actually be worth in 2015, given the 50% difference between Forrester and emarketer):
So despite the fact that SEM is currently around 15X bigger than mobile marketing and will still be at least 4X bigger by 2015, it appears that mobile marketing is hot and SEM is not. How can this be?
The Arc of Internet Marketing Channel Adoption
I’ve developed a theory for this seeming disconnect between buzz and actual spend: I call it the arc of Internet marketing channel adoption. The arc has three stages:
Stage 1: No one cares, no one spends any money
When a new marketing channel emerges, the media, marketers, and pundits don’t care at all about it. Think PPC back in 2001. Internet marketing sites like ClickZ or big conferences like Ad:Tech gave little to no coverage of PPC and instead focused on display, SEO, and sponsorship marketing.
Stage 2: Everyone cares, no one spends any money
This is the stage that mobile is in currently and that social media is slowly exiting. As shown by the Google Trends data, mobile is super-hot right now from a buzz perspective. Yet the spend is minimal compared to, well, virtually any digital marketing channel out there. PPC marketing entered stage 2 around 2004 (when Google went public) and exited around 2007, in my opinion.
Stage 3: No one cares, everyone spends money
This is the stage PPC is currently in. It’s no longer cool to talk about SEM at conferences, and yet everyone and their mother spends tons on AdWords. From an SEM practitioner’s perspective, this means that I’m no longer as cool as I used to be, but I make a lot more money!
What it Means
If you are an agency like PPC Associates, it means that now is the time to learn about mobile marketing, but not to expect your clients to knock down your door demanding huge investments in mobile for at least 12-18 months. While we certainly do test mobile with many clients (in particular, of course, our mobile app clients!), we generally focus most of our time on more mature markets, like SEM and display advertising.
If you are an in-house marketing pro, a great arbitrage opportunity currently exists in mobile marketing. You can buy clicks at significant discounts to value while your competitors sit on the sidelines.
I might add that social media advertising (Facebook, LinkedIn, and Twitter advertising products) are all toward the end of stage two and will soon exit to stage three. Video advertising is clearly in stage one (with the exception of brands who are already wasting billions on TV), and I believe display advertising is now in stage three.
– David Rodnitzky, CEO, PPC Associates
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