Mobile Advertising – Buy? Sell? Hold? What’s next for this Billion Dollar Business?

I chuckled when reading a recent article entitled “Why the Pipes are Broken in Mobile Advertising” from that venerable industry magazine, Advertising Age.  The article cited eMarketer’s estimate that mobile ad sales were close to $1 billion and went on to quote ad agency execs bemoaning the constrictions around mobile advertising. (Borrell Associates, on the other hand, is estimating that mobile ad spending close to 10x that – perhaps because we’re closer to the actual source, local – not national – advertising.)  The article went on to quote an executive from Ogilvy who indicated that, until mobile can be bundled into really big deals by the big agencies, it will be stuck at the margins of ad spending.

It’s an interesting theory, but it doesn’t hold water. In fact, it resembles one of the recurring nuances of disruptive innovation:  When faced with a disruptive innovation in their marketplace, the leaders of incumbent industries grossly underestimate the size of the disruption.  Call it denial.  Call it the Goliath Syndrome. It happened to the vacuum tube industry when disrupted by transistors in the 1960s.  It happened to IBM when mainframe computers were disrupted by minicomputers.  And it happened to Kodak when silver halide film was disrupted by digital photography.  (Oddly enough, it happened to a lot of ad agencies who denied the viability of the World Wide Web throughout much of the last decade, paving the way for digital-focused agencies like Tribal Fusion, Razorfish and Burst Media to steal clients.)

The Ad Age blog suggests that until the Madison Avenue agencies wrap their heads around mobile, nothing much will happen. The fact is, a great deal is happening right now, but the big agencies are not observant enough to catch or notice the trend. Smaller businesses – the fabled SMBs – are leading the charge to mobile because it can fill their stores and cafes. Bigger businesses, the ones smart enough to see what’s happening, are turning the reins for mobile campaigns over to their local branches and franchisees.  Bigger things happen at the local level.

The 20th century notion of big, one-size-fits-all marketing campaigns is wilting against a tailored, locally-centric approach.  Campaigns depend more on local opportunities than on global/national planning. Advertisers that are accustomed to making their marketing decisions in the board room will have to depend more on their local management.  Some takeaways from the new world of 21st century marketing:

  • The old notion of promotions vs. advertising is dying quickly. Smaller businesses don’t recognize those boundaries. To them, anything they spend money on to bring customers in is in the same bucket, and they want definite proof that it worked before they’ll try it again.
  • Customers are busier than ever. Their mobile phones have become vital communications and transactional lifelines. They don’t want to wait until a specific time to watch their favorite shows. They want to download them and watch them when it’s convenient. They don’t want to accept a retailer’s price; they want to use mobile devices in the store to compare prices at other retailers.  They simply don’t have time to drive around from store to store anymore.
  • Coupons and deals are the watchword, and they are moving online and to mobile. Even though coupon redemptions are hitting record rates, the number of printed coupon “drops” in a market continues to fall. Their digital replacements are easier to find, store, and use.
  • Deals and other payout-guaranteed promotions may be the long-term face of local marketing.  The idea of getting a check for your marketing efforts that grows as they become more successful is very compelling.

Of course, the buyers from big agencies (and their bosses, as well) will strongly dispute each of these points.  They will talk about strategic initiatives, share of voice, imprint accumulation, and all the other terms that have stood the test of time. It won’t matter. These terms are anchors to the past. They grew and flourished in a world where people had fewer choices and advertisers fewer options.

Today’s marketers need wings, not anchors. By the time the old guard acknowledges the scope and breadth of what’s happening every day in online marketing, no one will be listening.

Research Source:

Further Research

Mobile Commerce: Meeting the Demands of Tomorrow’s Consumers Today

Mobile Commerce Strategies



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  2. Mobile advertising is the next type of media that will see a huge influx of advertising dollars over the coming years. I believe that with every new kind of media, consumers need a gestation period before they begin to sense when they are being marketed to. This period of adaptation is the perfect time for advertisers to embrace the new medium with a savvy marketing campaign of their own. As a society, we have learned to block out ads when we know we see them. A new medium help to camouflage ads in the unknown.

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