(Image from Flickr.)
Stan Adler takes a look back at the origins of mobile advertising. From Digiday:
Recently, I bought a collection of vintage matchbooks at an estate sale. After arranging a few on my desktop, I realized that a marketing tactic, every bit as ubiquitous as what we now call mobile ad tech, was commonplace in the first half of the last century: rich content — 70 to 80 words per book — complete with illustrations, coupons, and call-to-action copy that could convert.
It was easy to imagine how these incendiary little devices held the potential — with some fusty fingering — to ignite ideas, maintain marketing superiority and set commercial benchmarks with advertising that were universally affordable.
I’m sure those matchbook ads worked great. But I have no idea how people back then got by without WhatsApp.
The latest study from Millward Brown, AdReaction 2012, finds that only 9% of American smartphone users have a favorable or very favorable disposition toward mobile ads. (More at Mediapost.) That’s about how much they like emails that they didn’t opt to receive (ie, spam), and less than half as much as they like online display ads. It’s a sad state of affairs when you can win a popularity contest against banner ads, eh?
Meanwhile mobile ads are working exceptionally well.
Prior research by Dynamic Logic’s AdIndex brand metrics system has shown that mobile ads are approximately four times more effective than online ads at increasing brand awareness, message association and purchase intent.
At first blush it sounds like two points of data that contradict one another. But that’s not really the case. It’s evidence of two factors that have played out across the history of advertising. One, when people actually look at ads, they tend to work. Mobile ads are more invasive and harder to ignore than online banners — there’s no AdBlocker Plus or Tivo for smartphones yet, and the narrowness of mobile screens means ads aren’t placed in that easy-to-ignore right rail — so they work better. Two, when asked directly consumers will always tell you they hate ads. Almost two-thirds of us dislike or strongly dislike ads, and yet we continue to pay a premium price to buy the stuff we see advertised. In other words, if we fail to shield our eyes from an ad — like it or not — it’s going to make an impression.
Google has been inserting ads in iPhone maps for a few months. I spotted my first one yesterday.
I’m guessing I should blame ATT for the frozen incomplete map above (it never loaded more that this), but I was annoyed that delivering the ad got higher priority than delivering my map. And for that I blame Google and Apple. Perhaps the map failure had nothing to do with the extra load of serving ads — but until the mobile map feature is highly reliable in San Francisco, Google and Apple should sequence the serve calls so that the ads load only after the map loads.
On the relevance front, I’ll give Google a C+. True, I was driving a car across the SOMA district of San Francisco, where Firestone Complete Auto is located. But I gave Google a few hints that I wasn’t on the market for automotive service at the time, and it ignored them. First, I didn’t search for automotive service. Second, I did search for a driving directions for a business a few miles from my current location — which suggests my car was running fine at the time.
According to research conducted by Keynote, US mobile phone users prefer browsing their way to favorite websites rather than downloading an app version of the site that’s been optimized for the mobile-phone experience. The only categories where mobile users prefer apps over the standard browser experience are social media (namely Facebook and Twitter), games and music services.
The findings bring me back to 1999, when websites were obsessed with building-client app or browser-extension versions of themselves, only to realize that web users mostly opted to skip the download-and-install process in favor of browsing, bookmarking or searching for content by way of an upstart called Google. As eMarketer suggests, this data will disappoint sites that were hoping to use apps to snatch up permanent real-estate in a smartphone land grab:
“These preferences may surprise mobile experts who consider apps to offer the best content and shopping experiences. And marketers may be frustrated as well; getting an app on a user’s home screen is a constant reminder of the brand, but it doesn’t make sense to offer an app users don’t want.”
Interesting implications, too, for Apple’s iAds, the business unit dedicated to creating in-application advertising that, like the apps themselves, is designed exclusively for the smartphone experience. Maybe the naysayers are right.
One thing that’s made me a fan of Apple’s iAds approach is its focus on building a mobile advertising experience for brands wanting *create* demand in mobile environments, rather than a platform that allows retailers and direct-response marketers harvest demand that was created elsewhere (the Google approach). As mobile advertising matures, brand advertising and DR advertising will both be elements of the winning model. But in these early days, as the the big players — namely Apple and Google — are establishing their ad products and their reputations, I’m wondering if it’s a good move for Apple to open the floodgates to mobile banners from app developers pitching you on their $0.99 downloadable products. When advertisers optimize for click-through and conversion-to-immediate-sale, the banners tend to favor jarring colors and annoying tactics to fool us into clicking — not beautiful ads that enhance the experience, like Superbowl commercials that are more fun to watch than the game. According to the Business Insider,
“the new iAd for Developers program is Apple’s way of getting more (albeit cheaper) ads in its system to fill its inventory glut, while also moving more app downloads through its App Store, and helping the developers who run its ads in their apps make a little more money. A potential win-win-win, if it works out.”
Cheaper ads to fill an inventory glut? That doesn’t sound like the formula that’s made Apple successful elsewhere.
In the inaugural post at his eponymous blog, my colleague Bob Buch suggests Apple’s vertically-integrated approach to business and not-integrated-enough approach to mobile advertising may limit its initial success.
“After launching DiggAds, I’ve become convinced that the future of advertising will be to integrate ads into the user experience of the site. This doesn’t mean just sticking them in the middle of the page, it means including the functionality of the site within the ad itself — essentially, transforming ads into content. Examples of this include DiggAds, Facebook’s social ads, Twitter’s new Promoted Tweets product, and of course, Google AdWords. I was disappointed that Apple did not follow this model.”
More thoughts on the battle between Apple and Google for mobile ads.
Back in November, the NY Times reported that Apple filed a patent for un-skip-able ads for iPhones and iPods. Speculation at the time by ChasNote reader RolfSF:
“methinks this is geared more toward some of the ad-supported software models, perhaps giving some ‘free’ iphone apps a means to be free for a price.”
RolfSF was listening in on Apple’s earnings call earlier today and heard something that confirms his speculation: Peter Oppenheimer said the company had acquired Quattro to “offer developers a seamless way to make more money” in their apps, particularly free apps.
You have to wonder if Apple plans to staff an ad sales team.