May 26, 2015
Retailers count on mobile ads
With consumers increasingly turning to multiple screens for research and buying while at home, in-store and on the go, retailers are doubling down on mobile advertising to reach them throughout the purchase process, according to reports.
EMarketer’s "Digital Ad Spending Benchmarks by Industry" report estimates $6.65 billion will be spent by retailer to reach consumers on mobile devices this year, representing 23.2 percent of the total $28.72 billion all industries are expected to spend.
The research firm stated that with a vast majority of retail sales still occurring in-store (7.2 percent of U.S. retail sales are expected to come via e-commerce in 2015), "omnichannel efforts are often bolstered by mobile ad spending directed at driving visits."
Emarketer has estimated that about three-quarters of all digital advertising will be mobile by 2019.
In a similar bullish report around smartphone’s reach, Juniper Research’s "Digital Advertising: Online, Mobile & Wearables 2015-2019" predicted annual global advertising spend on mobile devices will reach $105 billion by 2019, up from about $51 billion this year.
Source: www.emarketer.com
"The research suggests that this increase in advertising spend is in large part attributable to an attitude shift among brands and retailers who now use mobile as a core channel for consumer engagement," wrote Juniper in the report. "It argues that the ability of smartphones to deliver targeted, personalized and timely advertising — allied to the media-stacking trends amongst consumers — means that mobile advertising offers both high visibility and high response rates."
A Wall Street Journal article that came out last week noted that some advertisers are boosting their spending on mobile ads because Google, tapping store-perimeter geofences, is better linking store visits to clicks on mobile search ads.
The article noted that one-third of Target’s mobile search ads led to store visits during the 2014 holiday season. Kristi Argyilan, a Target senior vice president, told the Journal, "We know from Google’s store-measurement data that our mobile-search ads greatly influence in-store sales."
Facebook, the other dominant player in mobile ads, is also developing mobile/in-store metrics. Mobile search ads still cost half the price of desktop ads.
- US Digital Ad Spending Will Approach $60 Billion This Year, with Retailers Leading the Way – eMarketer
- Mobile Advertising Spend To Reach $105bn Globally By 2019, Accounting For 44% Of Total Digital Ad Spend – Juniper Research
- Google Says New Store Data Help Mobile Ads – The Wall Street Journal (sub. required)
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Recent Discussions
Discussion Questions
Do you see mobile advertising become the primary medium to reach omnichannel shoppers and drive in-store visits? What do you think of mobile advertising’s capacity to deliver “targeted, personalized and timely” ads?
Poll
There is little doubt that a generational shift from “old media” to “new media” is moving fast, such as Millennials’ abandonment of “dead tree” newspapers or the binge-watching of TV series. So it’s no wonder that mobile advertising is outpacing the growth of other methods, especially as consumers absorb more information on mobile devices and less on PCs.
But a true omnichannel strategy means that a retailer’s brick-and-mortar and online experiences are seamlessly blended in the customer’s eyes. So the use of mobile advertising must be part of an integrated approach, especially if the goal is to drive both brand equity and store traffic.
I gotta say, I’m skeptical of the depth of mobile advertising’s impact. It could very well be that I am not your “typical” user when it comes to mobile or mobile search, but the only ads I’ve ever really noticed on my phone have been the annoying ones that I x-out of within the free version of game apps. When I search for a retailer or a product on my mobile phone, it’s because I’m looking to confirm hours or location — the intent was in no way generated or even really aided by an ad. I worry that all this hype over mobile advertising doesn’t measure “influence” so much as capture a snapshot of an intent already in progress.
I’m not saying “don’t advertise,” but for Target to say that one-third of mobile search ads led to a store visit? I have to ask: Did they? Did they really? Or were shoppers already on the way there? Just make you sure you understand what you’re really measuring here.
Mobile is a powerful medium for reaching retail customers. I am not sure about it being a primary one. A customer still needs to be operating the mobile device for the advertising to reach them. Especially with women who have their mobile devices in their purses vs. guys in their pockets. On the other hand, digital signage will be a powerful medium for targeted content on location.
The trick would be for retailers to get people to use the mobile devices in their stores. This may be where digital signage fits in, to prompt the user to operate the device which allows the retailer to get really personal with the content.
I believe it will still be some time before mobile ads become the primary method to reach shoppers. There is no doubt that combined with digital media the impact is more powerful than flyers and newspaper ads. Having said that, I still get ads twice per week in the mail and with my paper (yes I still read a local paper). Until mobile and digital prove more efficient and effective retailers will still use print media as their primary vehicle.
Mobile advertising has an increasingly useful place in targeting, personalized and timely ads for retailers, and the influence of mobile coupon ads continues to grow. The January, 2010 Prosper Media Behaviors & Influence (MBI) Study of 15,000-plus adults indicated that 73.6 percent of respondents said that mobile coupons provide NO influence, while 8.4 percent of respondents said mobile coupons influenced/greatly influenced them.
The January, 2015 survey showed those figures shifting, NO influence (39.3 percent) and influenced/greatly influenced (30.2 percent).
Different merchandising categories and specific audience segments have to be kept in mind, however, in establishing allocations for overall advertising spend. As of January, 2015, 15.1 percent of adults 18 and older seeking electronics indicate that mobile device advertising influences their purchase. That figure drops for other categories: Groceries (9.4 percent), apparel (9.3 percent), dining out (8.4 percent) and medicines (4.6 percent). If your target is Hispanic shoppers, in a couple of these categories, the figures double.
Know your store, tie in the category and know your audience. Several different media forms currently drive, and likely will continue to drive, higher levels than mobile devices. Mobile devices have a place in the budget — be ready to start experimenting.
The more I look, study and think about the future of marketing, I can see it more clearly headed toward becoming a revenue center. What that means is that marketing will no longer be marketing and advertising, it will be interaction that actually generates sales.
So, do I see mobile advertising becoming a primary medium? Nope! Millennials are not going to accept a bunch of unsolicited ads, etc., on their mobile devices. You can bet the bank on that!
What they will accept is interaction that validates their thoughts around the brand. Deal-making that closes the sale whether it’s monetary or not. Get it?
Marketers, or whatever we need to start calling you, put aside your old school thoughts and put on your Tom Terrific thinking caps!
If you want to be a winner … For my two cents.
I am always struck by how frequently a Google ad will come up when I put in something as specific and high ranking as “CVS Store Hours NYC.” The first legitimate result is always the same link that CVS (or whatever retailer) did not have to pay for at all. On my phone I will often click the ad, as it takes up the majority of my screen—but it’s not really an ad drawing me in.
So much of the mobile side of omnichannel is about reinforcing the brand and giving an extra bit of information to make the sale process a little more easily. I would advise retailers to focus on providing timely, relevant information and stay away from obvious ads if they are after long-term success.
What is it about mobile advertising that makes it so compelling for retailers? I’d venture that it has much to do with proximity and the chance to influence the purchase process in the final seconds.
I also think a clear understanding of these data requires something we don’t have available in this discussion—breakouts by product category and age cohorts.
I’m skeptical that mobile ads can be highly effective at driving visits. Wrong end of the funnel, IMO. Then again, I’m a mobile user, but not a mobile-first user, like many millennials seem to be.
Personalization near the point of decision is a promising opportunity (neck of the funnel) with a fairly clear ROI potential. I don’t think we should try to force-fit brand advertising into the promotional moment.
Omnichannel is a consumer subjective experience and will rely on the markets scrutiny, reporting and word of mouth to claim success and favor. Consumers are more aware of customer counts vs. a few disgruntled freeloaders in search of a free order. It is the system in place that will win or lose the continued support of the market segment in play, and for that reason a real omnichannel experience is more important than a commercial of any kind. What you do is much more important than what you say in any business effort.
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There is little doubt that a generational shift from “old media” to “new media” is moving fast, such as Millennials’ abandonment of “dead tree” newspapers or the binge-watching of TV series. So it’s no wonder that mobile advertising is outpacing the growth of other methods, especially as consumers absorb more information on mobile devices and less on PCs.
But a true omnichannel strategy means that a retailer’s brick-and-mortar and online experiences are seamlessly blended in the customer’s eyes. So the use of mobile advertising must be part of an integrated approach, especially if the goal is to drive both brand equity and store traffic.
I gotta say, I’m skeptical of the depth of mobile advertising’s impact. It could very well be that I am not your “typical” user when it comes to mobile or mobile search, but the only ads I’ve ever really noticed on my phone have been the annoying ones that I x-out of within the free version of game apps. When I search for a retailer or a product on my mobile phone, it’s because I’m looking to confirm hours or location — the intent was in no way generated or even really aided by an ad. I worry that all this hype over mobile advertising doesn’t measure “influence” so much as capture a snapshot of an intent already in progress.
I’m not saying “don’t advertise,” but for Target to say that one-third of mobile search ads led to a store visit? I have to ask: Did they? Did they really? Or were shoppers already on the way there? Just make you sure you understand what you’re really measuring here.
Mobile is a powerful medium for reaching retail customers. I am not sure about it being a primary one. A customer still needs to be operating the mobile device for the advertising to reach them. Especially with women who have their mobile devices in their purses vs. guys in their pockets. On the other hand, digital signage will be a powerful medium for targeted content on location.
The trick would be for retailers to get people to use the mobile devices in their stores. This may be where digital signage fits in, to prompt the user to operate the device which allows the retailer to get really personal with the content.
I believe it will still be some time before mobile ads become the primary method to reach shoppers. There is no doubt that combined with digital media the impact is more powerful than flyers and newspaper ads. Having said that, I still get ads twice per week in the mail and with my paper (yes I still read a local paper). Until mobile and digital prove more efficient and effective retailers will still use print media as their primary vehicle.
Mobile advertising has an increasingly useful place in targeting, personalized and timely ads for retailers, and the influence of mobile coupon ads continues to grow. The January, 2010 Prosper Media Behaviors & Influence (MBI) Study of 15,000-plus adults indicated that 73.6 percent of respondents said that mobile coupons provide NO influence, while 8.4 percent of respondents said mobile coupons influenced/greatly influenced them.
The January, 2015 survey showed those figures shifting, NO influence (39.3 percent) and influenced/greatly influenced (30.2 percent).
Different merchandising categories and specific audience segments have to be kept in mind, however, in establishing allocations for overall advertising spend. As of January, 2015, 15.1 percent of adults 18 and older seeking electronics indicate that mobile device advertising influences their purchase. That figure drops for other categories: Groceries (9.4 percent), apparel (9.3 percent), dining out (8.4 percent) and medicines (4.6 percent). If your target is Hispanic shoppers, in a couple of these categories, the figures double.
Know your store, tie in the category and know your audience. Several different media forms currently drive, and likely will continue to drive, higher levels than mobile devices. Mobile devices have a place in the budget — be ready to start experimenting.
The more I look, study and think about the future of marketing, I can see it more clearly headed toward becoming a revenue center. What that means is that marketing will no longer be marketing and advertising, it will be interaction that actually generates sales.
So, do I see mobile advertising becoming a primary medium? Nope! Millennials are not going to accept a bunch of unsolicited ads, etc., on their mobile devices. You can bet the bank on that!
What they will accept is interaction that validates their thoughts around the brand. Deal-making that closes the sale whether it’s monetary or not. Get it?
Marketers, or whatever we need to start calling you, put aside your old school thoughts and put on your Tom Terrific thinking caps!
If you want to be a winner … For my two cents.
I am always struck by how frequently a Google ad will come up when I put in something as specific and high ranking as “CVS Store Hours NYC.” The first legitimate result is always the same link that CVS (or whatever retailer) did not have to pay for at all. On my phone I will often click the ad, as it takes up the majority of my screen—but it’s not really an ad drawing me in.
So much of the mobile side of omnichannel is about reinforcing the brand and giving an extra bit of information to make the sale process a little more easily. I would advise retailers to focus on providing timely, relevant information and stay away from obvious ads if they are after long-term success.
What is it about mobile advertising that makes it so compelling for retailers? I’d venture that it has much to do with proximity and the chance to influence the purchase process in the final seconds.
I also think a clear understanding of these data requires something we don’t have available in this discussion—breakouts by product category and age cohorts.
I’m skeptical that mobile ads can be highly effective at driving visits. Wrong end of the funnel, IMO. Then again, I’m a mobile user, but not a mobile-first user, like many millennials seem to be.
Personalization near the point of decision is a promising opportunity (neck of the funnel) with a fairly clear ROI potential. I don’t think we should try to force-fit brand advertising into the promotional moment.
Omnichannel is a consumer subjective experience and will rely on the markets scrutiny, reporting and word of mouth to claim success and favor. Consumers are more aware of customer counts vs. a few disgruntled freeloaders in search of a free order. It is the system in place that will win or lose the continued support of the market segment in play, and for that reason a real omnichannel experience is more important than a commercial of any kind. What you do is much more important than what you say in any business effort.