Epic 2011 Trends Post, Part II: Mobile Advertising
Published: February 10, 2011
Author: David Rodnitzky
Mobile: Android, AdMob, and iPad, Oh My! I’ve been hearing about how important mobile is to businesses since 2000! Every year, some industry pundit predicts that “m-commerce” is going to explode. I think we’re finally at a point when the pundits might actually be correct. In my mind, there’s a convergence of three factors that will make mobile important in 2011.
First, there’s Android, Google’s operating system (OS) that is now a serious competitor to the iPhone. Google is allegedly shipping 300,000 Android phones a day, and folks not on AT&T (which still has exclusive rights to the iPhone) are eating up Androids quickly. The iPhone and Android are the first mobile devices that are really being used by consumers as mini-computers. This is due to the incredible diversity of useful applications (“apps”), the bigger screens, faster browsing, and touch-screen usability. The number of consumers that now have access to a decent and useful Web experience on their phones has virtually doubled overnight thanks to Android. For 2011, this means that e-tailers who have a mobile-friendly site should start to see a small but meaningful number of transactions coming through mobile. For non-e-tailers, it means that an app strategy or even a straight mobile advertising strategy might make sense.
Apple’s iPad launch, while not really a mobile device like a cell phone, is still relevant to this space because it is basically a big iPhone without the phone part. Consumer usage of the iPad, however, is much different than a cell phone or a laptop (or even a netbook). I see tablets as purely interactive devices. They are useful for digesting and exploring content quickly. For some reason, it’s fun to flip through a bunch of pages of merchandise (or articles) on the iPad in a way that would be boring on a laptop or too slow on a mobile device.
What I think this means is that we are basically moving from one dominant form of online engagement (the computer) to three: the computer, the mobile device, and the tablet. The tablet is still at least a year or two away from mass adoption, so I don’t think tablet development needs to be a priority for 2011, but the success of the iPad (and subsequent launch of many competitors) tells me that this is coming in the near future. And if you are inclined to spend some money now building a really cool iPad app, you do stand a decent chance of getting good adoption from existing iPad users – the number of iPad-specific apps out there is still pretty limited so the competition is sparse (that won’t last, trust me).
Finally, with the growth of mobile, it’s not surprising that Google made a move in 2010 to protect its online advertising dominance, acquiring AdMob for $750 million (congrats to my friend Saar for being an angel investor in AdMob; he’s buying the next 25 lunches we have together . . .). While I know of few advertisers that have had a lot of success through mobile advertising in 2010, I believe that in 2011 all advertisers should at least begin experimenting with a mobile advertising strategy, and some advertisers will actually find some nuggets of gold in mobile ads. The big challenges that I see for mobile advertising are 1) proper tracking (no cookies!); 2) proper attribution (is it the top of the funnel, the bottom of the funnel, or somewhere in between?); 3) resource allocation (how much time should I spend on this now if I hardly have enough time to work on my existing channels?).
The good news is that you can dip your feet in mobile and figure this stuff out at a fairly affordable cost at the moment. Just as PPC was a great “arbitrage” opportunity in the early 2000s, so too is mobile these days. Starting some testing in 2011 gives you the opportunity to figure out the right mix and measurement of mobile and be a few steps ahead of the competition as mobile’s marketshare heats up.
For a great summary of mobile developments, I recommend this report: http://metrics.admob.com/wp-content/uploads/2010/06/May-2010-AdMob-Mobile-Metrics-Highlights.pdf