StateofMobileMarketing_17Sept09

8/7/2019 StateofMobileMarketing_17Sept09

1/16

Kathryn Koegel 2009

1

By Kathryn Koegel

Prepared for Digi:Day Mobile

September 17, 2009

With data collaboration from:

comScoreDynamic LogicInsightExpressThe Nielsen CompanyQuattro Wireless

Overview

Consumer adoption rates surpass Internet: Mobile devices haveachieved greater consumer adoption even than Internet access which makes them an extraordinary potential marketing medium.

Smartphones and faster connection speeds are the game changerfor marketers: With the iPhone leading the charge along with 3Gaccess and unlimited data plans weve reached a turning point formobile marketing and a wake-up call to marketers who have not yetbegun to test the medium.

Advertiser mix has become more like that of any other media: Advertising on mobile phones is being embraced by traditionalbrand marketers not just marketers of cell phone applications likeringtones and games.

Mobile is being used for both awareness and direct response: Advertisers are using the medium not only for direct response, butespecially in the case of entertainment, personal care products,technology-related products and automotive, as an awarenessdriver and a way to appeal to highly-desirable audiences tough toreach through other media.

Mobile has high performance rates relative to other interactivemedia: At this stage in the evolution of mobile marketing, itsrelative lack of clutter and low cost makes it greatly appealing formarketers lost within the pods of television, the jumble of searchand web pages and impacted by the declining audiences of printand radio.

Mobility offers greatest marketing potential: Mobile, the onlymedium where the advertising travels and typically stays with theconsumer, offers unique opportunities for geo-targeted and point-of-sale promotions and marketing.


2/16

Kathryn Koegel 2009

2

Introduction and Premise:One of the ongoing and most clichd jokes of theinteractive marketing space has been that each yearpresents one killer app that will revolutionize all of marketing. In the Internet, marketers went through theyear of widgets and applets, the year of search, the yearof ad networks, the year of social networking. Aparticular type of company is hot with venture capitalistsand when the hype dies down, the interest either goesaway or the type of marketing just becomes another partof the mix.

It has been proclaimed the year of mobile in the US just about every year since 2000, as venture capitalists

and start-up companies look at adoption rates and usagetrends in other countries. The aim of this paper is not todeclare that mobile has arrived as a marketing vehicle,but to separate the hype from the reality in terms of consumer usage, marketer spend and advertisingdevelopments. There is no company or tradeorganization backing its publication. Instead, researchcompanies that have been tracking the space since theearly 2000s, both in the US and abroad, have contributeddata to it. Their insights are complemented withcampaign-based data from a leading mobile ad network,Quattro Wireless, which serves over four billion ads permonth. The data has been analyzed by an independentmedia researcher and consultant who has heldprominent marketing positions in the three leadingmedia (print, TV and online).

This paper will put in perspective and in standardmedia terminology an emerging marketing form thatholds dramatic promise for connecting with consumers,but at the same time continues to present impedimentsto effective and efficient usage.

So Whats the Big Deal? In an era of tumbleweeds blowing through suburbanmalls, record rates of loan default and unemploymentnot seen since the 1930s, cell phones are a shiny, happy,anomalous product: the one thing consumers had tohave at any price. When there was not much to partyabout economically, cheerful hoards of Apple-devotes

waited overnight for the ultimate envy item. How manyproducts have there been where consumers emergedpost-purchase to be high-fived by the crowd?

I got mine. Photo courtesy of CNET

Even if you were a consumer turned off by the iPhonehype, it was hard to miss all the publicity around theworld's leading celebrity and his particular devotion tothe smartphone. Obama told the press that the hardestthing about becoming president was giving up hisBlackBerry. The company, which realized it has one of the biggest unpaid product placement in history, workedwith an unnamed government agency to develop special

encryption so he could keep the phone.

With thumbs flying First Presidentialsmartphone. Photo courtesy of AP

Mobiles USPsWhile consumer exuberance about cellphones has beenhard to miss, the USPs for marketers have been a little


3/16

Kathryn Koegel 2009

3

more opaque. Given current market trends and availabledata, marketers should pay attention to mobile because:

There is near universal POSSIBLE mediausageWe are now at 85% consumer penetration of phones[see Figure 1], a number that surpasses Internet use andapproaches the reach of television, so its no surprisemarketers need to crack the code of how to get throughto those nearly ubiquitous devices.

Figure 1

The challenge is that they are not used as a full-timemedia device and as comScore data shows, only aboutone-third of mobile users are regularly using them as amedia device at all [see Figure 2].

Instead, usage currently can be divided into people who just see these things as phones, texters and WAPconsumers. Even then, WAP consumers can be brokendown into those with marginal connections (anythingless than 3G) and fanatics who proudly show off thelatest models. It's important to realize that there may

not be a steady progression of phone-only consumers toWAP. Think of how penetration of home broadbandstalled out at 59% of households (Nielsen, 12/08) andDVRs at 33% (Nielsen 09/09). There will remain a groupof consumers who through income, geography or basiclack of desire, will always be holdouts.

There are, however, distinct consumer targets thatmobile excels at reaching:

Figure 2

Urban/Ethnic MarketsMobile bridges the ethnic digital dividebetween white and non-white usage. Wirelessdevices are heavily used by two of the mostsignificant broadband holdouts: AfricanAmericans and Hispanics [see Figure 3]. Andsince these groups tend to be eager consumersof apparel, food and beverages andentertainment, wireless devices become thatmuch more appealing for marketers.

Figure 3

Teens/Gen YUntil the iPhone came along and made a chunkof GenXers total gadget heads, there was oneobvious audience for cell phone marketing: the12 24 set [see Figure 4, next page]. For thisgroup, devices are an expression of theirpersonal style and a rite of passage device.

Phones take on the PCAmong various demos, mobile phone penetration is equal to

or greater than Internet penetration

These numbers have not dramatically changed since July 2007

InsightExpress6-09 *Pew 6/07 has not changed

Mobile Phonepenetration

Internetpenetration*

Gen Y (18-24) 85% 87%

Gen X (25-44) 84% 83%

Younger Boomers (45-54) 84% 65%

Older Boomers (55-64) 79% 65%

But not all mobile consumers useMobile Media

MobileMedia,35.6%

SMS (andnot mobile

media),29.5%

Just Voice,35.0%

Market Segments

18.6% YOY growth in mobile media usage just voice usersdeclines 18%

comScoreMobiLens, USThree month average ending June 09

Mobile is more likely to be the Internet accesspoint for Black and Hispanic audiences

Pew Internet & American Life July 2009


4/16

Kathryn Koegel 2009

4

Figure 4

The CW created an entire dramedy driven bytext messaging and alerts. Primo gossip girlsSerena van der Woodsen and Blair Waldorf usetheir Verizon LG phones (note productplacement) as weapons in the war for controlover Upper East Side prep-dom. In the 18 th century, epistolary novels were big. Now wehave textolary TV.

OMG R U SREUS????!!! Serena and Blair Photocourtesy of The CW.

Teens spend so much time away from othermedia at school that mobile has appeal beyondthat of TV and Internet for marketers. They arenot likely to be on smartphonres and the bulk of their usage is texting, so SMS is crucial for reachof this group. Parents have stepped up to payfor limited talk/unlimited text plans, which fuelthis behavior.

MomsMarketers are starting to grasp the power of blogger moms and they should also pay

attention to mobile moms. A June 09 studyfrom the website BabyCenter showed that 91%of moms never leave home without their mobiledevice. There is a lot of Facebooking andphotosharing from smartphones going on in aplayground near you.

Reach of Affluent AudiencesIn these austere times, bling is bad, but thesmartphone is standard operating equipmentfor both business executives and affluentconsumers. BlackBerries and the financial sitesaccessed through them are a very precise way

to target the $100K plus audience [see Figure 5].

Figure 5

It's become such a challenge to reach thesetime-crunched consumers, that one early-adopter set of mobile advertising is luxury goodsmarketers. comScore and Nielsen are bothseeing luxury auto, watches and jewelry registerin their ad capture data.

Data Rich Environment Kinda, Sorta,Maybe Just as with search and online display, mobile marketinghas great appeal in terms of the amount of instantaneous data available. Run an SMS or bannercampaign and you know how many ads were clicked on.Create a mobile app and determine how many have beendownloaded. Marketers who pixel-tag their sitesappropriately can do conversion tracking based onbanner ad clicks. With the rich media ads for somesmartphones you can capture depth of engagement (in

Generation Text

3%

4%

1%

4%

33%

8%

5%

1%

12%

52%

21%

14%

10%

23%

65%

20%

14%

7%

19%

83%

0% 25% 50% 75% 100%

Games

Applications

Video

Internet

Texting

Weekly Usage of Mobile FeaturesJune 2009

18-24 yrs25-44 yrs45-54 yrs55-64 yrs

InsightExpress Digital Consumer P ortrait, June 09

Theyre not reading magazines?! Affluentconsumers read on BlackBerries

58.0%51.4%

40.5% 37.3%32.0%

0%

10%

20%

30%

40%

50%

60%

70%

BlackBerryFinancial News

Browsers

BlackBerry TechNews

BlackBerryOwners

Financial news Tech news

% Income $100,000+

comScoreMobiLens, USThree month average ending March 09


5/16

Kathryn Koegel 2009

5

terms of number of pageviews post interaction) and timespent. Mobile has not, however, reached the point of being able to fully account for the concept of uniques,

which is the online proxy for persons (not all mobilebrowsers accept cookies which is how this data istypically derived). It also does not connect with the sortof reach and frequency data that is used for television indeed, most counts are really looking only at the subsetof consumers on smartphones or reached through textmessaging, which does not equate to the US population.The view though (an online measure that accounts forlatent impact of an online ad without a click) alsorequires cookies and is not yet developed for mobile. Fornow, marketers have the arsenal of click rates as a proxyfor effectiveness, post-exposure brand impact studieslike those provided by Dynamic Logic, InsightExpress andcomScore and sales/conversions/forms-filled-in throughthe device.

Attentive, Uncluttered Environment: TheShock of One Unit Per Page!Any marketer frustrated by the volume of random adsappearing on an average web page or their pod positionin the 10+ minutes of commercial time per half hour oncable nets will embrace the fact that rarely more thanone ad appears on a page of content. The kind of personal connection consumers feel with their phones and the fact that phones are a statement of style andchoice would seem to make mobile a boon tomarketers looking to surf on that cachet.

Handset targeting is a common practice for reachingdistinct audiences (Sidekicks are big with teen girls,BlackBerry Curve 8330s are the phone of women 35-44,the iPhone 3GS is the hot ticket to men 25-34 comScore OEM report 7/09). But this has also been an

impediment to advertising on the phones: acceptedwisdom from the era of SMS-only marketing was thatconsumers would find this sort of advertising toointrusive and privacy invasive in effect, mobile SPAM.With the growth of the mobile web and ad-sponsoredapps, this sensitivity has clearly changed. The mostpopular WAP sites (utilities like sports, news andweather) serve an ad every time a consumer checks the

site. The advertising-for-content value exchange isestablishing itself.

Geographic & Location-Based ImplicationsMobile phones are becoming portable media devices,which is probably their greatest appeal for marketers.AOL and Universal McCann released a study in July 2009that found that the smartphone gets through toconsumers in places some other media finds it tough toreach: 82% at work, 81% while shopping and 65% whilecommuting to their jobs (as reported in Adweek,7/08/09).

Ads on wireless devices can be effectively geo-targeted

by carrier and DMA. More interestingly, because GPS-enabled apps are so popular on smartphones, ads cantechnically be targeted to the exact location. From a dataperspective, there are permission issues and it is now tooexpensive and slow to create the Minority Reportscenario of the ad sending a specific message to you at aspecific retail location at a specific time but that is likelyto change.

The aHa! Moment: Speed and the

iPhenomenonThe latest and biggest selling point for smartphones hasbeen 3G access [see Figure 6].

Figure 6

This dramatically improved the user experience for WAPcontent and is akin to when broadband reached critical

The takeoff points? 3G, Unlimited Data,Smartphones

28.9%

37.3%

12.6%

17.5%

8.1%13.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

200806200807200808200809200810200811200812200901200902200903200904200905200906

% M a r

k e t

Growth of Market Enablers

3G Unlimited Data Plan SmartphonescomScoreMobiLens, USThree month average ending June 09


6/16

Kathryn Koegel 2009

6

mass in the US: if you make it faster, they will come, andthey will consume content.

InsightExpress attitudinal research shows that consumersare as happy with their smartphone web access as theyare with direct web connectivity. The newest AppleiPhone 3G S model is 54 percent faster than itspredecessor iPhone 3G that came out a year agoaccording to tests done by the tech site Anandtech.

This kind of fast access can change behavior even more

so than just having a smartphone. As a Forrester survey

of over 61,000 iPhone owners found (reported in

CNNMoney 6/12/09): 78% of working iPhone owners

access the wireless web from their phones (as compared

to that 28% of smartphone users). Eighty percent of

working iPhone owners text weekly in contrast with 60%

of working smartphone owners. And those people are

walking billboards for the device: more than a third of

working iPhone owners go online outside or in another

public place. This is twice as many as all working mobile

phone owners (17%) and nine percentage points higher

than all working smartphone owners (26%). iPhone

owners are the proud look at me kind of consumer s

that marketers dream of.

For marketers, its clear that devices i mpact media

consumption. You would assume that the bestselling

smartphones would be driving the majority of ad request

but it doesnt work that way, at least for now. While

the BlackBerry Curve 8330 is the top phone according to

comScore, Quattro Wirele ss Q2 data shows that it is only

the 5 th most common device by ad requests (which

equate to volume of media consumed). iPhones and

iTouches crush the Blackberry in request volume, due tothe volume of WAP and app usage on Apple devices [seeFigure 7].

Even Now I ts Not an All Apple World

Apple is so hot right now that wild numbers get thrownaround about the penetration of those iPhones. Its

Figure 7

It is important to keep in mind that not all mobileconsumers in the US are on smartphones and that theiPhone is not the bestselling phone in America. Some inthe US want not even want to use the phone as apersonal entertainment device. Or, heretical as this maybe to the mobile cognoscenti: shake their phone or makeit release gastric noises. July comScore numbers forsmartphones show just what a lead RIM and theBlackBerry still hold [see Figure 8 ].

Figure 8

Some consumers will want to think different than theiPhone. One great product deserves another and Palm,BlackBerry and Googles Android operating system havethe thankless task of catching up imitation will be thesincerest form of flattery and consumers will benefitfrom lower prices and increased functionality. There willbe 20 more Android-type phones in the market beforeyears end. Media is already the beneficiary of all that

Top devices by Sales vs. Ad requests:Devices impact content consumption

Top 10 Selling Handsets June 2009 Purchasing Rank

DeviceRIM BlackBerry Curve 8330Apple iPhone 3G 8GBSamsung Rant SPH-M540LG VX10000 VoyagerMotorola W175gMotorola i776Apple iPhone 3G S 16GBLG Dare VX9700RIM BlackBerry Storm 9530LG enV2 VX9100M:Metrics, Inc. 2009

Top Devices byAd Requests Q2 2009

DeviceApple iPhoneApple iTouchSamsung SCH-R450T-Mobile SidekickRIM BlackBerry Curve 8330Sony PlayStation PortableHTC G1 DreamSamsung SPH-M800 InstinctRIM BlackBerry 9530 StormRIM BlackBerry 8130 PearlQuattro Wireless Q2internal data

Smartphones: The 13% reality andApple does not yet own

But March to July 2009 Smartphones added 1.28% to theirshare of the total phone install base

Smartphone

13%Non-Smart87%

RIM41%

Microsoft21%

Apple21%

Palm8%

Symbian3%

Danger3%

Google3%

OS Share of Smart Phones

comScore M:Metrics, USThree month average ending July 09


7/16

Kathryn Koegel 2009

7

advertising. According to Nielsens report on first half 2009 overall ad spending, (a thoroughly dismal story at -15% overall) the one truly bright spot is multi-function

phone advertising, which was up 107% YOY.

Non-Phone Wi-Fi Enabled Devices:Gaming for a Connection?Some of those hot devices accessing the Internet are noteven phones. Apple made a brilliant move by introducingthe iTouch, a device connecting over wi-fi that ispurposely everything an iPhone is except the phone andthus doesnt require the two -year AT&T commitment.They were sold for $99 in Christmas 08 and havebasically become the portable media device du jour:apps, gaming, video watching.

The iTouch now takes on the formidable competitors of the Sony PSP and Nintendo DS whose latest versions allinclude wi-fi access, and consumers are now using themto access the Internet: Quattro Wireless Q2 data showsthat the same percent of ad requests come from gamingdevices (including the iTouch) as from iPhones. The 6 th most popular device by ad requests that shows up intheir system is the Sony PSP portable gaming devices.

Even the bookish Kindle is also a wi-fi enabled device:Quattro Wireless data shows that the people usingKindles are a highbrow bunch. They read publicationslike the New York Times, The Washington Post andHuffington Post with their devices and are much lesslikely to be playing casual games or social networking.With the rapid growth of netbooks (Apple is set torelease one) and the growth of wi-fi if Obama gets hiswish the US will be one massive hot spot we arelooking at an entire connected device revolution.

What Kind of Impressions Are WeTalking about? Ads in PerspectiveWhile mobile advertising might at first seem confusinggiven all the different cell phones (comScore reports1,031 Mobilens, May 09) and screen sizes, themarketing on them breaks down quite simply into textads delivered via SMS, WAP text links and banners (four

standard sizes, no Flash graphics) delivered via mobilebrowsers and applications, content integrations andsponsorships and the as-yet nascent field of rich media

and video. The Mobile Marketing Association made avery smart move and standardized sizes early so that themess of online banners and their literally thousands of dimensions, never occurred. Which to choose? Each hasbenefits and limitations:

SMS: The only way to reach the entire mobile market but you have to get them to opt in. SMS is the phoneequivalent of email marketing: as a permission-basedmedium, marketers need to pay attention to frequency,relevance, directness of the message. As text only,creative is obviously limited, but since consumers aresigning up to receive the messages, it has the benefit of an established marketer/consumer relationship.

WAP Text Links and Banners: These can easily synch upwith online campaigns. They are simple to create andtraffic through ad servers much like those used for onlinedisplay. Most ads are static GIFs, but multi-panel ads(roughly the equivalent of an animated GIF) areincreasing in the market. They were Q uattro Wirelessfastest growing ad format in Q2 but still accounted foronly 8% of their total impressions during that period.

Rich Media: The iPhone has engendered something of acreative renaissance in mobile advertising as expandableads, and Flash-like ads upon app download have begunto be developed: companies like Quattro Wireless,Greystripe, MediaLets and Admob are taking the lead.Platform A/Third Screen, Pointroll and Eyewonder havebeen able to convert ads from rich media online displayto mobile (less creative re-do costs).

Video: Mobile video is primed for takeoff with phoneslike the iPhone 3GS. Nielsens Q2 09 Three ScreenReport finds that consumers of mobile video spentslightly more time viewing on mobile than consumers of

online video did on the Internet (3 hours:15 vs. 3 hours:11). The number of mobile viewers in the U.S. hasleaped 70% YOY. Ads in video are pretty much pre-rollspicked up from online, which are typically repackagedfrom TV. The online medium is still debating the length of a video ad but it only makes sense that a :30 is probablynot suited to the shorter content currently favored bymost mobile video consumers.

Apps: Since the Apple app store launched in summer 08,over 1.8 billion apps have been downloaded and apps


8/16

Kathryn Koegel 2009

8

have achieved an almost unparalleled coolness factor.There is no question that doing something innovative inan app was a great way to get attention for marketers in

09. As yet, there is no consensus on whether it will be acost effective way to continue the conversation.Charmins Sit or Squat geo-finder app for publicbathrooms is likely better at generating PR than regularproduct usage. Apps pose some distinct challenges formarketers:

Separate Development Costs: Now thatmanufacturers aside from Apple are in thegame, branded apps now have to be developedto the separate coding requirements andapproval processes for Palm, BlackBerry andAndroid which is a costly and time-intensiveundertaking.

Market to Make the List: So many apps crowdthe Apple store, that marketers have to devotefunds aside from development costs to makesure that app sees the light of consumerphones: There is an entire industry (not unlikethe book marketing world pushing for the NewYork Times Bestseller list) growing up aroundgetting those apps to the top of the category-by-category top downloads lists. Most of the adnetworks also now specializes in marketing tomake the list through mobile bannercampaigns.

Persistence vs. Event Marketing: Apps canmake sense for both goods sold over time andmay also work for those with a distinct shelf life.There are some great examples of howpackaged goods companies have marriedcontent with product and the location-basedappeal of the phones to create apps that offer apersistent consumer connection: the Kraft iFoodAssistant app can make grocery lists, find storesand is used in-store where Kraft wants theproduct message to be.

For a fan-intensive movie like Quantum of Solace, branded apps probably helped buildword of mouth and interest for another Bond.

Theres no telling whether they generatedenough usage and excitement to impactopening weekend sales. Mini-trailers orbillboards be placed in audience-targetedmobile video content, or ads on young, male-skewing WAP sites is an easier to execute planthat may be more effective.

Appropriateness of the Content: For ads inapps, many of which are sold through mobile adnetworks, you have to carefully look at the issueof transparency. The ad-supported apps that

achieve highest reach may not be the bestreflection of the brand. Judd Apatow films maybe perfect in one of the most popular iPhonedownloads one that turns the phone into awhoopee cushion but that app is not foreveryone. For a list of places marketers reallydont want to be, check out The HuffingtonPosts 10 Most Inappropriate Apps list. Appsare just another form of media and the audienceand content of the app should be evaluated justas any site would.

Avoid Hype, Plan Strategically : Going witheither a branded app or ads in apps should be adecision made based on brand strategy: Beforedeveloping an app, marketers have to answerthe all important question would someoneaccess this enough to make it worthwhile forthe development and maintenance costs . Toooften apps are novel one-offs, and not a part of a sustained consumer conversation.

The biggest challenge to apps will be the mobile browserwar of the future. Remember the PC browser war thatMicrosoft even tually won? This time its big-bad Applevs. up-and-comer Google with their Android browser.RIM just purchased TorchMobile to improve what theymust admit is a marginal browsing experience theyhave the lead in handsets, if they can just fix thebrowser... If you believe that mobile phones are just

another way of accessing the web and shouldnt requireseparate apps for increased functionality, youre on theside of the Google camp. Androids latest versions arebuilt on HTML 5 which enables location informationthrough the browser. This will replicate all those coolgeo-enabled apps. Whether apps remain or browsers winout, consumers will be the victors as the browsingexperience will improve on all smartphones.

Where Are Ads Making an Impression?:

The Dot-Mobs vs. The Fortune 500In the early days of mobile marketing, impressions wereheavily dominated by cell phone personalization:ringtones and various ways to customize the phone. Thiskind of endemic advertising should decrease shareover time just as dot-com advertising gradually declinedas a percent of total in the Internet display space. In2009, marketing on mobile started to look like marketingin any other medium and in some cases, categories


9/16

Kathryn Koegel 2009

9

hard hit by the recession still had the funds to devote tothis emerging platform. Aside from mobile-related ads,Broadcast & Cable, Auto, Communications Equip. and

Personal Products account for the greatest share of adinstances according to comScore in June [see Figure 9].

Figure 9

According to Nielsen, 28% of advertising on landingpages they measured was from Web Media, followed byEntertainment at 16%. Consumer Goods accounted for8%, while automotive was 3% [see Figure 10].

A Note on Ad Impression Capture Methodology:While the process of capturing ads that have run isnot perfect in any medium, it is especially challengingin mobile due to the number of platforms, browsersand carriers: proceed with caution with all availablenumbers; they are helpful for determining competitorusage and placement but in no way reflect thebreadth of the market. (See Appendix for moredetails.)

Figure 10

Some trends coming out of both sets of data:

Advertisers are looking beyond clicks: Early heavy usersof online display tended to be either dot-coms drivingtraffic or e-commerce. Current heavy users of mobile

such as Entertainment, Electronics and Software are notentirely focused on traffic driving. They have alreadymade the leap beyond click rates [see Figure 11]. This islikely due to the fact that you can isolate specific demoswith the phones (urban audiences, teens, affluentaudiences).

Figure 11

Advertisers choose sites for mass reach: In mobile,traffic is concentrated on certain categories of content:news, sports, utilities like weather, and entertainment.

According to The Nielsen Companys AdRelevance in June09, four of the top 10 advertisers on entertainment sitesare entertainment advertisers, while companies likeAT & T, Cover Girl, MasterCard and BlackBerry arelooking audience reach, not context.

Contextual relevance is very important in categories likepersonal finance and real estate: Mobile offers theperfect combination of appropriate demography, reachand context in this case. Consumers especially affluentones are using smartphones to access stockinformation and there are well-developed mobile realestate sites and apps that appeal to consumers lookingfor property and re-financing.

There are outlier spend categories like ConsumerGoods: While CPG to date has low involvement in online(lack of a connection to sales and reach and frequencymetrics have muddied the value proposition), notablebrands like Cover Girl (Proctor & Gamble), Sprite, Crestand Fanta are embracing mobile [see Figure 12, nextpage].

comScore: Non mobile categories rank

0.0% 5.0% 10.0% 15.0% 20.0%

Broadcasting & Cable TVMobile Publishing

Mobile Games and Applications

Mobile Social MediaAutomobile Manufacturers

Mobile PersonalizationMovies & Entertainment

Specialized Consumer ServicesWireless Telecommunication Services

Automotive RetailApplication Software

Mobile Music & VideoHotels, Resorts & Cruise LinesInternet Software & Services

Leisure FacilitiesFood Retail

% of products advertised

% of Mobile Banne r Advertisers by Industry Sector(teal = mobile sectors / orange bars = non-mobile sectors)

comScoreAdMetrixMobile, June 09

Ads on WAP landing pages: Web media,Entertainment, Telco & CPG lead

28%

16%

12%9%

8%

5%

5%4%

3%3%3%

2%2%

% Share 3rd Party Est Impressions by Ad Category

Web Media

Entertainment

Telecommunications

Consumer Goods

Retail Goods & Services

Financial Services

Software

Automotive

Travel

Health

Business to Business

Hardware & Electronics

Public ServicesThe Nielsen Company AdRelevance, June 09

Beyond the Click: Entertainment, Health,Tech use mobile for awareness

The Nielsen Company, AdRelevance, June 09

The Nielsen Company Ad Strategy by Category


10/16

Kathryn Koegel 2009

10

Figure 12

The upscale approach is clear in Auto: Jaguar, Lexus,Toyota Prius and Infiniti are on the top 10 autoimpressions list [see Figure 13].

Figure 13

Year-over-year changes attest to the dynamic nature of the medium: If you look at the leading advertisers froma year ago vs. today using comScore data, you can see just how dynamic the medium is: the top advertiser,Google, wasnt even on the list in 2008 [see Figure 14].

Some did cut back on what probably came out of discretionary budgets and some are on an upwardgrowth trend. But its clear that when a list hasadvertisers like Walt Disney, Cisco and Toyota in testingmode, they will use their learnings to increase spend inthe future. Nielsens list of top landing page advertisersalso has a decidedly Fortune 500 skew [see Figure 15].

Figure 14

Figure 15

The Inventory Glut: A Little LessGluttonous?With consumption rising, there's a lot of inventory to goaround in an emerging medium. comScore data showsstrong variance in percent of house vs. paid ads bycategory: Downloads, Real Estate and Services have thehighest percentages of paid inventory [see Figure 16,next page].

Relative Cost:As might be expected, ad categories that desire targetedaudiences or very specific context tend to be payinghighest CPMs. Quattros Q2 data shows that Finance,

Consumer Goods advertisers are 9% of alllanding page impressions

32%

21%

8%

5%

3%

3%

2%

2%

2%

1%

CoverGirl

Sprite

Crest

Fanta

Gillette

General Mills, Inc.

ConAgra Foods, Inc.

Degree

Suave

Post


June Ad Impressions % of Category

50% are personalcare products

33%

27%

10%

7%

7%

2%

2%

2%

2%

2%

Acura

Toyota

Lexus

Buick

Nissan

Jaguar

Hyundai Motor

Ford

Infiniti

Chevrolet

Landing page Auto impressions


June Ad Impressions % of Category

Many models areluxury

comScore shows dynamics of medium:30% did not advertise in 08

Rank Row Labels June 2009 June 2008 Pct Change YOY

1 Google 7035.48 Newin 20092 The Walt Disney 1300.62 946 .28 37%3 Microsoft 1182.02 1450.31 -18%4 News Corp. 1 011 .31 7 8.4 6 1189%5 Thumbplay, Inc. 826.84 1100.20 -25%6 Viacom 8 17 .1 6 4 64 .7 8 76%7 Quizheros 800.13 Newin 20098 ClubM8 767.04 24.73 3001%9 Tata Motors (Jaguar) 750.19 New in 2009

10 Time Warner 702.61 1582.60 -56%11 Cisco Systems 6 72 .8 8 1 88 .3 0 257%12 CBS 6 51 .5 7 1 30 .0 0 401%13 PredictoMobile, LLC 623.77 Newin 200914 Acotel 615.68 3 03.79 103%15 General Electric 575.74 17.6 3 3165%16 Research In Motion 564.44 Newin 200917 SAP AG 438.55 Newin 200918 CSW 438.10 69.06 534%19 Toyota 434.16 559.16 -22%20 eBay 392.15 22.2 7 1661%

G r e y=

F o r t u n e 5 0 0

comScoreAdMetrixMobile, June 09

Nielsens data on WAP landing pageadvertisers: Mostly Fortune 500

Top Homepage AdvertisersShare of Estimated

Impressions June 09Weather.com (NBCUNI) 15.4%Sprint Corporation 5.7%Psychic Center 4.0%Deutsche Telekom AG 3.8%Google, Inc. 3.6%Microsoft Corporation 3.5%Electronic Arts, Inc. 3.2%TNT (Time Warner) 3.1%CoverGirl (P&G) 2.8%Align Technology, Inc. 2.0%Sprite 1.8%PredictoMobile.com 1.8%DreamWorks SKG 1.7%Acura Automobiles 1.4%Viacom Inc 1.3%Apple Computer, Inc. 1.2%Toyota 1.1%

G r e y=

F o r t u n e 5 0 0

The Nielsen Company AdRelevance, June 09


11/16

Kathryn Koegel 2009

11

Figure 16

Automotive, Electronics ad costs are about eight times ormore that of the average CPM. The direct business -- allthose mobile-related, dating, education and gamingadvertisers tend to buy on a CPC basis and pay belowthe average [see Figure 17].

Figure 17

Response: The RealitiesThere are claims in the market of response rates more

than 200 times that of online display (20%)?! First off,lets establish that an overall click rate for an entiremedium is not a very helpful metric to a marketer. Itdoesnt take into account the quality and intent o f thecreative or the variable of placement.

There are also two likely factors coming into play:novelty, and the relative scarcity of mobile ads in themarket and on the page of content this last fact is a

lesson to be learned for online display advertising. But, if we are to take clicks as a proxy for ad effectiveness, itsmore useful to look at relative numbers by ad category;

after all, some categories are likely to be focusing onawareness more so than a direct response. So for the Q2Quattro Wireless data, if we take 100 as a baseline, therelative performance by category is shown in [Figure 18].

Figure 18

Consumer Goods (which in this case includes health andbeauty products) have highest relative direct responserates. If you look at some of the creative out there yousee that these companies are marketing to highly-

responsive young audiences through mobile. Some useclick-to-coupon offers or in the case of beauty products,click to purchase. Other high performing categories tendto (very subjectively of course) have some of the mostdazzling mobile creative: entertainment and automotive.

Click rates also vary dramatically by device as QuattroWireless Q2 data shows: clearly, devices impact behavior[see Figure 19, next page].

Just as people on iPhones are more likely to consumemore content, at this stage of the game, they are alsomore likely to click. Their behavior is similar to that of consumers on non-phone gaming devices, whileconsumers with BlackBerries and other types of smartphones are more similar in likeliness to respond.

House Ads: Unsold inventory similar toearly days of web

Ad Monetization by Genre, April US

Paid Ads House Ads

comScoreAdMetrix Mobile, April 09

Highest CPMs paid by Finance, Autos andElectronics; Mobile advertisers buy on CPC

0

400

800

1200

1600

2000Index of eCPM and eCPC By Industry (US)

eCPMeCPC

Finance demandshighest levels of

audience and contenttargeting thus higher

CPMs

Quattro Wireless Q2 internal data, US

Consumer Goods generates highest responsefollowed by Autos, Finance & Entertainment

Quattro Wireless Q2 internal data, US

214189

170 164 157 155126 124 114 107 98 97

95 79 72 61 56 44

0

50

100

150

200

250

Index of CTR (US)

CPGs are often usingmobile for promos with

call to action


12/16

Kathryn Koegel 2009

12

Figure 19

The type of ads also has an impact. Animated adsoutperform static banners and text [see Figure 20].

Figure 20

Expandable ads which are just making the scene oniPhones and Android phones are more an engagementvehicle and should be measured on depth of pageviewsrather than clicks.

Branding in Small SpacesBecause mobile is such a personal medium and perhapsbecause the ad units are scarcer than in other media various brand metrics, such as ad awareness andmessage association are high compared to online.Interestingly, the rates are more similar to those of online video than they are of the early days of online ads.Both InsightExpress and Dynamic Logic, which havedeveloped control vs. exposed methodologies for servingsimple surveys to wireless users, are showing very

positive brand impact even if you factor out the noveltyof mobile advertising. [see Figures 21 and 22]

Figure 21

Dynamic Logics spidey graph also make s the point thatonline video and mobile show similar responsefootprints. Both companies do not yet have enough datato break out impact by smartphone type.

Figure 22

Where Does Mobile Fit in the MarketingMix?Just as with online, there is no simple answer as to whatmobile contributes to the media mix. It can achievereach, it can provide high audience comps, it does haveresponse mechanisms built in (and not just clicks, butvoice response capabilities) but like online, is saddledwith creative challenges and its location-based targetingis not fully developed. Mobile should not make the

iPhones generate highest response followed bygaming devices

Quattro Wireless Q2 internal data, Global

135

105

7966 62

-

20

40

60

80

100

120

140

160

iPhone Gaming Palm Android Blackberry

Index of CTR by Device

The Apple OSencourages consumer

interaction

Animated ads offer 63 point response liftover banners

Quattro Wireless Q2 internal data, Global

Expanding ads =engagement not clicks

171

10898

72

0

20

40

60

80

100

120

140

160

180

Animated Banner Expanding Text

Index of CTR

Mobile scores for branding metrics: Islack of clutter a benefit?

10.79.1

16.5

8.610.5

2.0 2.74.9

2.2 2.7

UnaidedAwareness

AidedAwareness

Ad Awareness BrandFavorability

Purchase Intent

Mobile Norms Online NormsDelta calculations based on overall exposed percentages (minus control)InsightExpress: InsightNorms

Respondents: Mobile N = 47,658 Online N = 513,973

0

5

10

15

20

25

Awareness

Ad Awareness

Message AssociationBrand Favorablity

Purchase Intent

Early Online Norms (2000-2002)

Early Video Norms (2002-2004)

Mobile

Mobile Ad Impact compared to earlyOnline Ad & Broadband Video norms

Percent of People Impacted

Dynamic Logics MarketNorms; Online (2000-2002). N=616campaigns; Online Video MarketNorms(2002-2004), N=34campaigns;AdIndexfor Mobile Norms through Q2/2009, N=48 campaigns, n=46,691respondentsDelta ( )=Exposed-Control


13/16

Kathryn Koegel 2009

13

mistake of attempting to be something it is not or spendtoo much time comparing itself to television in terms of reach or online in terms of interactivity and information

intensity. Mobile is just another way of accessinginteractive media but by its always-with-you nature, hasits own uniqueness. Mobile can:

Add efficient reach to an online display campaign

Become an activation medium for outdoor, print andtelevision campaigns

Replace/complement print and outdoor for reachingkey demos including urban and affluent audiences

Replace/complement newspapers, email and onlinefor couponing and promotions

Commerce or Just Browsing: The KillerApps of Mobile?Back in 1999, the question was, would consumers,especially Boomers and above get over fears of securityand start buying via the web. 2001 actually was the yearof e-commerce, so they clearly did. As of now, a smallpercentage of consumers have conducted some form of mobile commerce (6.7% of subscribers according to

Nielsen). Just as in the early days of e-commerce, thesame security concerns exist for mobile. BillingRevolution, a mobile wallet company, recently conducteda study through Harris Interactive (6/09) about consumerattitudes to m-commerce: not surprisingly, once again itis an age-based issue. Fifty-nine percent of those 18-34said they thought m-commerce somewhat safe, whileonly 34% of those 55+ said the same.

Smartphones impact not only usage of media, butwillingness to even consider making a purchase over thephone. iPhone consumers are probably most primed forthe mobile buy as they make transactions regularly withthe purchase of apps but then their personal info isalready stored on the Apple secure site. According toInsightExpress (Digital Consumer Portrait, 6/09) 45% of smartphone users said they would like to purchase in oneclick; only 18% of feature phone users felt the same.

What kind of products? The Billing Revolution surveyshowed that impulse and convenience purchases are

most likely to be made. Pizza topped all other producttypes at 59%. Papa John's has a successful m-commercecapability; what dorm party would be complete without

a pizza ordered over the mobile phone? The otherchoices mostly relate to activities that phone mobilitysupports: movies (58%), hotel rooms (43%), music (41%),and coffee (25%). Perhaps the pay model will work forsome content on mobile: 25% said they would be willingto pay for mobile video or TV.

As speeds increase and the wireless device becomes justanother way to access the Internet, it only makes sensethat some types of m- commerce will take off. Theresalso nothing like necessity to encourage consumers to do

something they are at first uncomfortable with: thosefrustrated by long movie lines will buy the ticket fromtheir phone and jump the queue.

Comparison shopping would also seem to be a verystrong possibility for growth, especially in price sensitivefields like consumer electronics. Consumers like to touchthe merchandize in stores, but they also want the bestprice. InsightExpress surveyed consumers in December of 08 and found that 30% of smartphone owners had done

just that. Whats to stop them from checking out the flat

panel at one merchant and then using their smartphonreto see what the guy down the block is offering it for. Allthose retailers who promise theyll match any price?They should get ready and optimize sites for WAP usage.

Couponing: The Stealth App?Two areas of marketing now seem hopelessly outdatedand rife for a revolution: FSIs and direct mail. The formerbecause its primary mode of distribution, newspapers, isgoing out of business, the latter because its expensive

and relatively inefficient compared to email marketing.New generations of consumers have been primed formobile couponing by the experience of email and onlinecouponing. In a survey conducted through the GoogleAffiliate Network in 2008 (Online Promotions and theirImpact on the Purchase Process), nearly 90% of peoplewho shopped online went online in search of coupons.

Grocery coupons are the big Kahuna of promotions andwith most authentication issues resolved, consumers are


14/16

Kathryn Koegel 2009

14

11.2

45.8

19.4

8.4 8.75.6

22.2

12.1

4.2 5.93.36.9 4.2 2.2 3.6

Aided BrandAwareness

AdAwareness

MessageAssociation

BrandFavorablity

PurchaseIntent

Best Norm Worst

Creative matters: Deltas show roomfor improvement in mobile

Percent of People ImpactedAdIndexfor Mobile Norms through Q2/2009,

Overall N=48 campaignsDelta ( )=Exposed-Control

now being encouraged to print from their computers andredeem. Why not transmit that info to phones and savethe printing and processing step? Companies like CVS

and Target now do mobile couponing and transmit barcodes to the phone that then have to be scanned. Therehave been some challenges with readability of the barcodes and it can slow down the checkout process.

One company has taken this a step further. CellFiretransfers couponing data consumers have opted into totheir loyalty cards. They have so far signed up Krogers,Safeway, Colgate Palmolive, General Mills, Kimberly-Clark, Unilever, McDonalds, Subway and Sears. For thegrocery program, consumers register on a PC or phone at

either cellfire.com or the retailers web site. They selectcoupons which are immediately loaded to their unique ID(from the loyalty card). When they checkout in store, theregister applies them to the appropriate items and showson the receipt how much they saved.

Mobile couponing activity is now miniscule of the 6.7%of mobile subs that have conducted some kind of commerce, only 9.3% of them used mobilecoupons/vouchers or roughly 1.3M, based on Nielsen s Q2 data. If the retailers involved in programs like

CellFires drive adoption in store, the cost of entry will bereduced and the programs could take off.

Takeaways for Advertisers andMarketers1. Start Now: The explosion of the iPhone, the way it

has shown to change consumer behavior and theadvent of faster connection speeds are the wake upcall to start now and develop the knowledge base toenable successful campaigns now and in the future.

2. Remember that Mobile is Not Just AboutAdvertising: Its an engagement builder andsometimes just a utility. For banks, having a WAPoptimized site that enables your customers to dovarious banking functionality via their phones is agiven. For the right products, a branded app or gamethat ties into a specific offline promotion can be aterrific way to stay in touch with consumers.Retailers can benefit from the geo-locationfunctionality of apps on smartphones as they make iteasy for customers to find them. In N Out Burgers

have such a loyal fan base that they probably dowant to know where every last outlet is.

3. Keep it in Perspective : Dont be so bowled over bythe iPhone that you overlook other forms of deviceusage:

SMS is a cost effective way to reach non-smartphone users and really easy to execute: itis platform agnostic and 1 in 4 texters getmobile messages (comScore 6/09).

BlackBerry is the #1 phone in the US, andBlackBerries currently have greater reach of women, affluents and business users

Gaming devices especially the iTouch and SonyPSP are another way to reach a young, veryinteractive audience not likely to be on iPhones.

4. Smartphones Demand Smart Creative: With all of the excitement about device targeting and types of marketing in mobile, do not overlook creative bestpractices. In mobile, simple and straightforward withthe brand in every panel is the best policy. You canalso start experimenting with more graphic ads forsome smartphones many of which may berepurposed conceptually from rich media online.Dynamic Logic data shows great variability in impactby the creative [see Figure 23].

Figure 23

There is clear room for improvement. BothcomScore and Nielsen now have libraries of runningcreative as do many of the networks. DM2s Digi:Dayheld its first Mobi Awards and all of the nominees(www.dm2pro.com ) are worth studying for theirinnovative approaches. Just like online, it can be


15/16

Kathryn Koegel 2009

15

tough to catch the great campaigns; learn from whatothers are doing.

Start with the Basics: Goals, and the overallstrategic cross media plan and how mobile fits into itshould be assessed before entering into any mobilemarketing campaign.

Banner campaigns are typically simple toexecute and optimize and can reach both WAPsites and apps.

Weigh carefully a branded app vs. ads in appstrategy:

Is it better to create a new app or buy adswithin an existing audience and content-appropriate app?

Are there apps that so reflect the brand thata solo sponsorship will be worth the cost?

If you create a branded app, will it add valueto the consumer and achieve continuoususage to benefit the brand over time?

Do you have the resources and time todevelop the app for more than oneplatform?

5. Dont Forget Your Site: Dont be so excited by appsthat you neglect your WAP-enabled site:

Browsers will get better and if Google orMicrosoft have their way, more universal so thatcontent and ads on the browser improve on allcellphones.

Comparison shopping is becoming a reality andif your commerce site is not WAP optimized, youcould be losing out to your competitors.Consumers expect to be able to click through toa great experience on all phones, and the rightdevelopment partner can make that happen.

6. Its Not Mobile Advertising, Its Advertising: Mobile

is personal. Dynamic. Geographic. Can do somereally cool stuff. In the heat of the consumermoment, dont overlook the basic precautions of anygood advertising campaign. Start with a strategy thatcomplements other media initiatives. (A strategy isnot: we need a sexy app!) Be sure to protect andenhance brand value for the long term. Be attentiveto the needs of the consumer and their sensitivitieson this very personal device. Go for the big V: addvalue whenever possible.

End Notes

Contributors:

The following individuals contributed greatly to this report withideas, analysis and data:

Evan Neufeld, VP, Senior Analyst, Mobile, comScoreAli Rana, VP Digital Strategy, Dynamic LogicJoy Liuzzo, Director of Marketing and MobileResearch, InsightExpressJulia Resnick, VP Mobile Media, The Nielsen CompanyLynn Tornabene, CMO, Quattro Wireless

Additional Thanks:Ron Pitluk, Director Data Operations, QuattroWireless all Quattro dataAlex Maiorescu, Principal, Primary Impact additionaldata analytics

Resources:The following reports are essential reading for those seeking tounderstand the emerging marketing dynamics of mobile especially the how to piece:

IAB Mobile Buyers Guide, July 2009Mobile Best Practices in Brand Development,InsightExpress 2009Mobile Marketing Association site: for creative bestpractices and standardsRealizing Potential, Overcoming Barriers to the USMobile Advertising Marketplace, Nielsen, May 2009Wireless Internet Use, Pew, July 2009

Appendix on Mobile Ad CaptureNielsen monitors ad activity on the landing pages of the most traffickedWAP sites, as identified through its Mobile Internet research (currently161 sites are tracked). Each site is probed ~150 times per day. Theplatform simulates eight of the most popular feature phones andsmartphones in the market. With each probe, the technology extractsadvertisements and session information and subsequently alladvertisements are classified. Nielsen them employs a model thatreflects ad appearance frequency to derive estimated impressions.Depth and breadth of coverage is expected to expand in the comingmonths. Nielsen does not presently capture data on ads in appsthrough Mobile AdRelevance. Due to a change in methodology in May,there is no YOY trending. Nielsen also has a wireless bill panel of 55,000lines that monitors reach of SMS- based campaigns.

comScore uses a spider that conducts dedicated scrapes of topmobile sites every 5 hrs, 7 days a week. As part of this process they alsomimic specific device types to ensure that they are capturingspecialized ads which could appear on any WAP page of a site. The datathey capture is reflected in ad instances, which are not impressions butthe number of ads that appeared and they happened to spot. Theyhave YOY trending but do not yet have a methodology for capturingads in apps.


16/16

Kathryn Koegel 2009

About the AuthorKathryn Koegel is a principal at Primary Impact, a company that does media research consulting and data insightdevelopment for agencies and marketers. She has created marketing strategies for companies like DoubleClick,Gemstar TV Guide (Interactive Program Guides and the cable network), US News & World Report, The OnlinePublishers Association and one of the first Internet ad networks, Phase2Media. At DoubleClick, she was in charge of research and industry development from 2002 to 2005. Her research work has been accepted and published by the

ARF and ESOMAR. She dropped her first smartphone, a red BlackBerry Curve, into a bucolic rushing stream which has since becomeknown as Blackberry Falls. The photo chip survived, the device was not as lucky.

Contact her at: [email protected].

This paper is part of a series written for agency and marketing executives that present straightforward, media and research vendor-agnostic status reports on emerging media types. Future whitepapers include: State of Digital Display II (to be published at DPAC IV,10/26/09), State of Social Media Marketing and State of Online Video. For updates, see www.primaryimpact.com .

Last known photo taken from red BlackBerry 8830.

StateofMobileMarketing_17Sept09

Documents