I saw a brief comment on Bloomberg over the weekend where some pundit said that when the economy comes back, the big TV advertising budgets will return. Yeah, there is some good reason to think so, but they may not be as robust as one might think.
This recession has been a very good wake-up call to advertising and major brands, on the new interactive advertising media, for the internet as the 6th mass medium and mobile as the 7th mass medium. While the global advertising budgets were slashed, and overall advertising spending is down dramatically the past 12 months, internet advertising was roughly stable, and mobile advertising spending grew enormously. We do not have final numbers yet for 2009 mobile ad spending, but total mobile ad traffic on such mobile ad platforms as Admob (recently bought by Google) and Buzz City show enormous growth in the past 12 months. There are analysts who suggest the mobile ad global market grew anthing from 50% to perhaps doubling the past 12 months, while the economy famously 'cratered'.
Note that mobile advertising was such a small part of total advertising, that by any analyst, for 2008, mobile ads delivered less than 1 percent of all global advertising revenues. It is a tiny fraction even when compared to the interactive advertising budets - massively overshadowed by internet advertising - roughly speaking 10 times bigger. So if we are moving from such a small base, it is 'relatively easy' to grow at a high annual growth rate. Still, mobile advertising has been having a 'coming out party' this year.
What happened. First, very many global giant ad brands, the Coca Colas and Procter & Gambles and Fords and L'Oreals and Nikes have been running numerous campaigns around the world. They have been experimenting. In many cases, the ad campaigns were modest, simple, 'copycat' variants of web campaigns - ie banner ad, spam SMS and search word style campaigns on mobile. Copied from the web. Even so, across hundreds if not thousands of campaigns run on the major platforms, the mobile campaigns return something like 4% or 5% or 6% click-through rates. These are roughly speaking ten times better than similar campaigns on the internet.
So, what is happening? This decade, the major global advertising projects have gone interactive. They started on the web, initially got pretty good response rates and then ever worse rates. Now mobile has come along, and similar campaigns deliver far better response rates on mobile. On that evidence alone, when the 'big advertising budgets' return after the economic crisis is over, there will be at least the same ratio of interactive ad money as before - but, as the big brands have now experience in mobile, they will pour much more money into mobile, at least as a percentage of 'interactive budgets' than before.
What of engagement marketing? Then we have the mobile advertising experts, who read great books like Charma's Mobile Advertising and Dushinski's Mobile Marketing Handbook - and they learn about engagement marketing - and may even come and pick up our book Communities Dominate Brands with Alan Moore here, or Alan's newer book Social Media Marketing (don't buy the wrong book, there are 2 with the same title, so you want the one authored by Ajit Jaokar, Alan Moore etc). In that process, they learn about amazing case studies of how dramatically better mobile ad campaigns can be, if using 'engagement marketing' principles, rather than just older and simpler 'interactive advertising' principles. Then the average response rates shoot up to 30 percent response rates across thousands of ad campaigns run on mobile, usually using MMS picture messaging. We have celebrated many here at our blog, including my ultimate fave engagement marketing campaign, the BMW winter tyres campaign, where a total cost 120,000 dollar campaign yielded 45 million dollars of added sales - truly tracked and accurately attributed to that campaign, in just one country.
Now the Chief Marketing Officers of major brands are learning more about mobile. They hear of campaigns such as the BMW winter tyres of the Tohato chips wargames in Japan or the Coca Cola advergames in India or the Puma multiplayer racing games from China or of Victoria's Secret in Chicago or the innovative augmented reality apps used by Ikea to help market their furniture via mobile. Engagement marketing will bring a far greater return to any interactive ad campaign than simply doing web search words or banner ads on any browser, web or mobile. And these new engagement marketing campaigns will win the awards.
Maybe yes, TV ad budgets may return to their older levels. Maybe maybe even newspaper and magazine ads will. But interactive campaigns will grow when more money comes in, and by far the biggest growth area will be in mobile advertising. This is the hottest area to be in for advertisers in mobile.
And if you need a simple, free 2 page pdf document that summarizes and explains the mobile ad opportunity to share with your colleagues, send me an email to tomi (at) tomiahonen (dot) com, and I will send you the Ahonen Thought Piece on Mobile Advertising by return email.
This recession has been a very good wake-up call to advertising and major brands, on the new interactive advertising media, for the internet as the 6th mass medium and mobile as the 7th mass medium. While the global advertising budgets were slashed, and overall advertising spending is down dramatically the past 12 months, internet advertising was roughly stable, and mobile advertising spending grew enormously. We do not have final numbers yet for 2009 mobile ad spending, but total mobile ad traffic on such mobile ad platforms as Admob (recently bought by Google) and Buzz City show enormous growth in the past 12 months. There are analysts who suggest the mobile ad global market grew anthing from 50% to perhaps doubling the past 12 months, while the economy famously 'cratered'.
Note that mobile advertising was such a small part of total advertising, that by any analyst, for 2008, mobile ads delivered less than 1 percent of all global advertising revenues. It is a tiny fraction even when compared to the interactive advertising budets - massively overshadowed by internet advertising - roughly speaking 10 times bigger. So if we are moving from such a small base, it is 'relatively easy' to grow at a high annual growth rate. Still, mobile advertising has been having a 'coming out party' this year.
What happened. First, very many global giant ad brands, the Coca Colas and Procter & Gambles and Fords and L'Oreals and Nikes have been running numerous campaigns around the world. They have been experimenting. In many cases, the ad campaigns were modest, simple, 'copycat' variants of web campaigns - ie banner ad, spam SMS and search word style campaigns on mobile. Copied from the web. Even so, across hundreds if not thousands of campaigns run on the major platforms, the mobile campaigns return something like 4% or 5% or 6% click-through rates. These are roughly speaking ten times better than similar campaigns on the internet.
So, what is happening? This decade, the major global advertising projects have gone interactive. They started on the web, initially got pretty good response rates and then ever worse rates. Now mobile has come along, and similar campaigns deliver far better response rates on mobile. On that evidence alone, when the 'big advertising budgets' return after the economic crisis is over, there will be at least the same ratio of interactive ad money as before - but, as the big brands have now experience in mobile, they will pour much more money into mobile, at least as a percentage of 'interactive budgets' than before.
What of engagement marketing? Then we have the mobile advertising experts, who read great books like Charma's Mobile Advertising and Dushinski's Mobile Marketing Handbook - and they learn about engagement marketing - and may even come and pick up our book Communities Dominate Brands with Alan Moore here, or Alan's newer book Social Media Marketing (don't buy the wrong book, there are 2 with the same title, so you want the one authored by Ajit Jaokar, Alan Moore etc). In that process, they learn about amazing case studies of how dramatically better mobile ad campaigns can be, if using 'engagement marketing' principles, rather than just older and simpler 'interactive advertising' principles. Then the average response rates shoot up to 30 percent response rates across thousands of ad campaigns run on mobile, usually using MMS picture messaging. We have celebrated many here at our blog, including my ultimate fave engagement marketing campaign, the BMW winter tyres campaign, where a total cost 120,000 dollar campaign yielded 45 million dollars of added sales - truly tracked and accurately attributed to that campaign, in just one country.
Now the Chief Marketing Officers of major brands are learning more about mobile. They hear of campaigns such as the BMW winter tyres of the Tohato chips wargames in Japan or the Coca Cola advergames in India or the Puma multiplayer racing games from China or of Victoria's Secret in Chicago or the innovative augmented reality apps used by Ikea to help market their furniture via mobile. Engagement marketing will bring a far greater return to any interactive ad campaign than simply doing web search words or banner ads on any browser, web or mobile. And these new engagement marketing campaigns will win the awards.
Maybe yes, TV ad budgets may return to their older levels. Maybe maybe even newspaper and magazine ads will. But interactive campaigns will grow when more money comes in, and by far the biggest growth area will be in mobile advertising. This is the hottest area to be in for advertisers in mobile.
And if you need a simple, free 2 page pdf document that summarizes and explains the mobile ad opportunity to share with your colleagues, send me an email to tomi (at) tomiahonen (dot) com, and I will send you the Ahonen Thought Piece on Mobile Advertising by return email.
I don't think that the economy will come back - at least not in the same shape that it was in. Mainly for the reasons that you recognize. Companies have gone lean and kept profits (in some cases) and that's enabled them to see better what's possible.
The harder thing to project is if behaviors have truly changed. If that's happened, then mobile engagement advertising will indeed be the catalyst to an economy-gone-better, rather than a redux of whatever it is we've been smacking into the reality of.
Posted by: ARJWright | November 24, 2009 at 03:35 PM
I also think the economy will come back. For us it startet in october.
Posted by: bert | November 30, 2009 at 09:46 PM
As the economy stabilizes and moves into a cycle of growth, mobile advertising is expected to garner a larger slice of the pie. Historically, the strongest players use slow economic periods to capture share from weaker competitors and come out stronger on the other side of the recession. Mobile advertising is at a tipping point and now provides an opportunity to engage your target demographic in a one-to-one conversation, driving effective, efficient, and measurable results.
Posted by: cartouches d encre | December 01, 2009 at 04:03 AM
Hi ARJ, bert and cartouches
Thank you for the comments. I will respond to each individually
ARJ - very good, but I think there is a "snowball" type of effect that will happen, as more and more advertising execs are forced to consider mobile, and then they do competitive pitches against their rivals to brands/customers, they will have to learn rapidly on what works. Somewhat like search ads, just ever better and better and more and more on the web. I think the same will happen with mobile and specifically engagement marketing
bert - very good to hear, and yeah, I am seeing it too with my customers
cartouches - very true, and yes, we are at a tipping point. The economic troubles have perhaps even helped mobile to 'be noticed' more so than if the economy had been growing at normal rates
Thank you all for writing
Tomi Ahonen :-)
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