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The Smartphone Era
Posted on SEP 2012
The Smartphone Era

Google's Eric Schmidt has predicted that profits from advertising on mobile phones will one day surpass those amassed from internet users on computers. This is hardly a bold statement; we carry our mobile phones everywhere and it knows almost everything about us. It knows what we are browsing for as we wait to catch a train or bus, where we go when we check into a location on FourSquare or Facebook, and which QR codes we have decided to access. As smartphones become, well, even smarter, it is inevitable that advertisers will figure out how to use their many capabilities to reach targeted consumers.

That there will be growth in advertising via smartphone is undeniable - the question is, will mobile advertising ever be the primary avenue to reach consumers, and if so, when? Could smartphone-focused campaigns become standard in a year, or are we talking about 10 years?

The argument can be made that the mobile phone landscape - in terms of challenges and growth opportunities for advertisers - is similar to the computer-based online world seven years ago. For advertisers trying to crack the smartphone puzzle, the challenges revolve around three primary areas; market readiness, content availability, and device specifications.

When examining market readiness, the main focus is how telecom companies are structuring their data packages. Currently, data packages are priced on the high side, thereby preventing the formation of a critical mass of smartphone users who are always online. We constantly exalt the fact that the UAE market has more than 200% mobile penetration, but what we fail to emphasize is that smartphone penetration is between 65% & 70% according to various sources in the region. In other GCC markets it hovers around 30% & 60%. For these audiences to grow, data packages have to become more competitive in price and structure.

Another obstacle for advertisers in the regional smartphone scene is the lack of localized, Arabic language applications that would appeal to mass audiences. Currently smartphone apps are produced almost entirely outside of the region and the vast majority is in English. Local businesses are beginning to develop content that is specifically catered to the smart phone market, but substantial progress in this area will take time. Regional brands and the marketers that represent them have only recently begun to make room in their communications eco-systems for smartphone advertising. The slow pace of localized smartphone app and advertising content has resulted in advertising revenue via mobile remaining a small slice of the pie. As smartphone penetration increases regionally, this will undoubtedly change.

Wearable technology will offer a personalized experience

The final but most important point relates to the way in which mobile advertising is structured in relation to the capabilities of the smartphones themselves. In 2011, advertisers spent an estimated $3 million USD to reach mobile phone users; questions remain about the effectiveness of this money spent, and whether marketing professionals are using traditional strategies and mechanisms with mobile phones when novel approaches are required.

Smartphones have characteristics that make them completely unique; they facilitate social interaction, they can interact with the local environment, and they are portable. This means that marketers can use smartphones to target consumers at certain points of interest, for example retail, and provide a customized offer that that can be redeemed on the spot and then shared via social media platforms. This type of advertising technique has the potential to drastically alter the current status quo.

It is no longer enough to simply bombard users with banners in the hope that interest in the brand will result in a click. Mobile advertising must be seamlessly weaved into the consumer's everyday life, and it must be personalized - and thus useful to the consumer as opposed to being invasive and irritating. Part of this process involves content providers connecting with consumers in real time and taking into consideration what they are doing and where (going to the gym vs. shopping at a mall, for example).

This leads to a final set of questions - How can agencies adapt their resources to the rising mobile (and specifically, smartphone) advertising market? What can marketers do to integrate a mobile strategy within their communications and brand distribution planning?

The answer is simple; agencies must avoid creating another over-hyped specialization, one which is focused solely on mobile phones. There will always be a need for mobile specialists who are able to build the right mobile solutions, but these will be weaved within the overall agency structure. Communication planners will eventually become mobile planners if they are to follow Schmidt’s prediction, and social, search & content specialists will operate within a mobile driven platform.

Let's learn from early mistakes in online advertising, when there was a rush to form digital departments packed with most tech-savvy whiz kids. It wasn't long before we realized that this isn't what clients wanted; they wanted an online strategy that was fully integrated with the overall marketing strategy. Yes, mobile advertising must be given the attention that its potential deserves, but as part of a cohesive marketing team, not as a separate, isolated effort. Only then will mobile advertising take the place it deserves in the region's marketing landscape.

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