Mobile’s growth versus ad dollars spent

Brands need to think beyond common mobile banners to differentiate their advertising and tailor their approach to market needs, according to digital agencies.

The opportunity is immense. At present, there are 301 million smartphones in the region and 79 million tablets. This number is likely to double as soon as 2017 with forecasts pointing to 606 million smartphones and 153 million tablets in the hands of people across Asia within the next three years.

Advertisers aren’t totally ignoring the growth but industry watchers argue that agencies and advertisers fall far short of the medium’s potential and often simply port desktop campaigns over to phones and tablets. Return on investment is another hotly debated topic in the space. It is difficult to do mobile and get immediate results. It is also generally easier to go with tried and tested marketing and communications than it is to do some experimenting and risk failure.  

“I don’t think it’s about no planning or even late planning but actually bad planning,” said Paul Gage, regional planning director, Iris Worldwide. “There are fewer people with proper experience in the discipline and the functionality of mobile and human behaviour changes all the time.”

According to Gage, too many agencies and marketing departments have been sucked into a “brand arrogance” of thinking people want a branded application, with no real value to the end consumer within the mobile context.

There is a significant gap between the percentages of time spent on mobile versus the amount of advertising dollars heaped on the medium. According to a joint Yahoo and Mindshare study, consumers spend more time on their smartphones today than ever before. Activities include communication, entertainment, information/reading, content downloading and shopping. Yet the study found mobile only accounts for 12 per cent ($1.75 billion) of digital ad spend.

In Hong Kong, 86 per cent of respondents owned a smartphone followed by China at 64 per cent. The dynamic is considerably different in India and Indonesia where just 15 per cent and 31 per cent of people own a smartphone. but 59 per cent of Indians and 40 per cent of Indonesians polled still use a feature phone.

In Hong Kong, 85 per cent of consumers did some pre-purchase research on their smart phone devices and 48 per cent used their phones for showrooming (visiting a store to check out a product) but ultimately traditional online outlets, accessed via a desktop, captured the purchases. The numbers bore out in China as well where 57 per cent of consumers indulged in pre-purchase research on their smart device and as much as 28 per cent used their phone for showrooming.

“Marketers need to pay attention to showrooming, mobile search and optimizing mobile websites,” said Deepika Nikhilender, leader, business planning, Mindshare APAC. This is where consumers make their decision. The sale may come though more traditional channels but shoppers make the choice of what or where to buy on the mobile device.

Even in nascent mobile markets consumers exhibit similar behaviour, researching on mobile phones before buying. In Indonesia 49 per cent of consumers conducted mobile research before purchasing and in India the measure was 30 per cent. So while the metrics may differ, the trends align. According to Mindshare's study with Yahoo, Data costs in each country dictate “on-the-go” usage (or usage that is not reliant on wifi). So while 83 per cent of users in Hong Kong, where large data plans have competitive pricing, use their smart phones outside their homes and offices, while in China this number is 55 per cent. Indonesia and India are still growing at 19 per cent and 16 per cent, respectively.

What’s clear is advertisers need to invest in channels where consumers spend the majority of their time. So as consumers’ mobile hours increase, advertisers should expand their mobile mindsets.

A handful of firms have started actively investing in the medium. Unilever for one has created applications, music/movie downloads and in-game purchases. “As our brands activate across these platforms an element of commerce is built in—although not directly a product purchase,” said Chiradeep Gupta, global innovation manager, Unilever.

The FMCG major tweaks its mobile strategy for each market. In places like China, where e-commerce is well established, the company wants to move more of that online momentum to mobile channels. In other markets where tablets and smartphones play a role along the path to buying (from driving awareness/discovery, to consideration and offers/promos), the brand intends to enable transactions on those devices in order to capture the sale at the point of decision and bypass the desktop route.

Facebook has been working closely with advertisers to run mobile campaigns and programmes to help drive awareness, consideration and purchase intent.

Kenneth Bishop, marketing director, Asia Pacific, said mobile is no longer an afterthought. “In the last year we’ve seen advertisers make a massive shift in how they spend on mobile.” 

According to Bishop, Facebook’s mobile solutions have contributed to greater adoption and usage of mobile applications, as well as e-commerce across retail, financial services and travel companies.

Facebook claims 874 million people use its mobile app on a daily basis. That number has been swelling 45 per cent year-on-year and today 49 per cent of the company’s advertising revenue comes from mobile. “This indicates the growing priority that advertisers are putting on mobile,” Bishop added.

There are many simpler, low cost mobile options such as mobile search, Google map ads, mobile ads and contextual placements that marketers can tap into. “There are some really innovative formats and platforms available with relatively low costs investment, where ROI can be demonstrated.” Gage agreed.