A Hand-Held World: The Future of Mobile Advertising

Business.com / Marketing Solutions / Last Modified: February 22, 2017

The market for mobile advertising is evolving fast, and could soon present your largest opportunity. Here's how to make the most of it.

Advertising is a form of marketing communication that aims to promote and spread awareness about an entity that could be a product, service, or ideology, to name a few. As the name suggests, mobile advertising is carried out using mobile devices.

While some may regard mobile advertising as a close relative to online advertising, its reach and penetration is far greater. According to a report by Forrester Research, the world had over a billion active PCs by the end of 2008. This number is expected to rise to two billion in 2015 on the back of strong growth in the emerging markets.

On the other hand, the number of mobile phones is already expected to be near the human population. It is, thus, easily evident that mobile advertising offers greater gains and benefits compared to online advertising.

Related Article: Top 10 Advertising Blogs You Must Follow Now

Current Market for Mobile Advertising

You know there is no escape from ads and promotions when you are mobile. That is how ubiquitous mobile advertising has become. According to the Interactive Advertising Bureau, the mobile advertising industry experienced a worldwide growth of 65 percent in 2014. From $19.3 billion in 2013, the industry achieved a net worth of an eye-popping $31.9 billion in 2014. The best part is that the industry is nowhere near slowing down. This is remarkably astounding considering the fact that some folks had already prepared obituaries for mobile advertising not too long ago.

Mobile phones have undergone tremendous evolution since 1983. Today, it is a core component of the modern consumers’ life. However, it was not certain whether revenues would follow consumers to the mobile platform. Concerns were raised about the ability of organizations to monetize mobile devices successfully. It is now evident that those fears were unfounded. Organizations have successfully monetized mobile devices to generate tremendous profits.

Consider Twitter, for example. According to their earnings report for Q4 of 2014, the company generated sales of $432 million. Mobile ad revenues accounted for a stunning 88 percent of the total figure, which was an increase over the 85 percent reported for the third quarter. Facebook is not far behind. According to their Q2 report for 2015, 76 percent of the company’s ad revenue came from mobile alone.

Trends in Mobile Advertising

The market for mobile advertising is not merely growing; it is exploding. In fact, this medium is expected to outgrow all other digital ad platforms. Taking that into account, the future certainly promises to be bigger and better for the industry.

Marketers and advertisers realize that the future lies in mobile marketing and are taking big steps to incorporate the power of the platform in their strategies. However, the mobile advertising platform remains immensely underutilized due to a lack of knowledge in maximizing the space. Here are a few things marketers should keep an eye on.

Shift Towards the App Model

For mobile marketers and advertisers, the big swing is the shift towards apps. After all, mobile marketing is no longer about banner ads. From mid-2013 to mid-2014, AdBlock usage grew by as much as 70 percent. What is more illuminating is that 41 percent of young customers (18-29 years) use AdBlock technology. Customers now try to eliminate ads from the experience completely.

On the other hand, people are now spending more time than ever on mobile apps. Mobile app usage made up about 86 percent of the total time spent by users on mobile devices. While the mobile experience is still clunky due to the absence of a smooth transition from one app to another, the situation is rapidly changing thanks to the likes of URX, Quixey, and Deeplink.

Spending on Mobile Advertising to Exceed That of Desktop Advertising

As of 2015, marketers are spending a little over a billion dollars more on desktop advertising than on mobile advertising. Crossing this milestone would be more than mere symbolism – it would indicate that marketers are not only embracing the app model, but also finding tremendous success in reaching the consumers on the small screen. The sector is expected to get a huge push in 2016.

By 2017, spending on Mobile Advertising is expected to be double that of Desktop Advertising.

Location-based Advertising

Mobile location data can reveal tremendous behavioral insights about consumers and provide real-time and relevant proximity based information to mobile users by using historical and current data. For example, organizations can identify the shopping and eating habits of consumers through location-based mobile analytics and target those mobile users with the right promotional message when they are in the proximity of that store. Acquiring such information could open the door to a multitude of opportunities.

It is for this reason that leading brands have been quick to adopt location-based advertising. One such example is Quiznos that experienced a significant increase in mobile coupon redemptions following the execution of a marketing campaign.

The ability to acquire customers in real-time has led to an explosion in the popularity of this technique. The movement of brick-and-mortar brands towards the digital platform has also contributed significantly to the growth of location-based advertising. Some sources estimate location-based marketing to grow to $15.7 billion by 2018.

Related Article: Be Where the People Are: A Simple Guide to Mobile Advertising

Deep Links

To understand the concept and significance of deep linking, let us consider an example – how can people find your Facebook page? There are two ways through which this can be done:

  1. The interested party can use Facebook’s search filters to locate your profile
  2. You provide the URL of your profile to the interested party

The first method requires the interested party to perform a number of actions to get the relevant result. The second method, on the other hand, is simple and quick. Now, let’s change the role of the actors in this example. Let’s assume that you are the marketer and the interested party is the consumer. Wouldn’t you want to showcase your product to the consumers directly instead of making them jump through some hoops? Through deep links, you can get rid of all the unnecessary steps.

The web is what it is because of deep links – at least on desktops, that is. The story is completely different when we look at the mobile platform. Most mobile apps operate in isolated silos and do not grant direct access to resources. Consider a scenario where you want to access a particular page. Instead of directing you to the desired resource, mobile links tend to direct the user to the app’s home page. You then have to search for the resource. This increases not only the users’ efforts but also their frustration. Users want their app experience to be as seamless and convenient as their browser experience. That’s why mobile app developers have embraced deep links.

Mobile Video Advertising

While mobile video advertising has grown steadily over the years, it is now beginning to justify the hype it has generated in all this time. In the United States alone, spending on mobile video advertising doubled from $720 million in 2013 to $1.5 billion in 2014. It is expected to touch $6 billion in 2018. Several factors have contributed to the increase in video advertising spending such as the increase in number of mobile devices and improvement in broadband coverage.

2014 was a landmark year for the sector as more companies discovered that mobile video advertising was an effective technique to reach, engage and acquire a wider audience. For instance, the vast majority of apps are Freemium titles. This has made rewarded ads – ads that promote premium content or currency – remarkably popular as they nearly guarantee user engagement. However, rewarded videos remain more popular as they entertain and captivate the target audiences. This is a win-win situation for all parties – advertisers, consumers, and developers.

It could be argued that video is more user-friendly and impactful than all other types of advertising. It is probably why app developers are now integrating video ads into their apps to provide a context-relevant in-app experience.

Games Will Dominate Mobile Time

There are an imaginable number of things you could do through your mobile phone. The data reveals that mobiles users spend a sizeable amount of time in playing games. According to the stats from Flurry, users spend about 32 percent of their total mobile usage time on gaming.

The data is not surprising as games offer an immersive and unique experience unlike other mediums of entertainment and engagement. This is great news for marketers as they can generate massive amounts of user data.

Related Article: The SMB Guide to Mobile Marketing

To Conclude

As evident from all the reports, the future of mobile advertising is extremely bright with a promise of better customer engagement and return on investment. The users would want advertisers to reach them with ease and offer timely and relevant information, promotions, and discounts right on their mobile devices. Mobile advertising also enables a deeper level of personalization, and that is a win-win situation for both the marketers and the audience. Outsource2india has been providing various types of mobile advertising, in-app advertising, mobile app development, mobile site development, mobile game development services to companies across the globe, and we see a huge rise in the demand for these services.

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