The Challenges for Online & Mobile Advertising

05 February 2014
RED C
iPhone 5S Gold

“We’re moving a large chunk of our budget to online ….next year”.  A familiar refrain heard by the RED C team as we report on advertising effectiveness across a range of our clients.   It appears as if the message has finally broken through among brand teams and in board rooms across Ireland, that advertising spend online is still lagging a long way behind online consumption.  But what are the challenges for brands to make it work, and by the time brands have a plan will the target have shifted again?

The IAB Ireland (Internet Advertising Bureau Ireland) commissioned RED C to conduct research into consumer consumption online, in order to understand how consumer behaviour will influence advertising consumption and also among industry experts to try and decipher the best practice for brand spend online in 2014.

The start point is mobile – both smartphone and tablet.  Consumer activity online is being driven by a shift to more mobile surfing.  The increased penetration of smartphone (54%) and tablet (30%) ownership is driving the overall time spent online during the day to close to 3hrs among those with a smartphone device.  A quarter of that time online is through the phone itself, with a further 10% through a tablet.  More and more the primary usage of a phone is for online browsing, in fact 41% of smartphone owners use it more for browsing online than for calls and texts. 

No surprise that the best practice advice from media agencies we interviewed was unanimously that “Companies need to prioritise the mobile: Mobile first, PC last. Mobile sites need to be transactional”.  

Currently 21% of advertising spend in the market is on mobile (IAB BWC H1 2013 online ad spend), but 30-40% of all internet search is on mobile.  There is a clear message here: the party has moved on and mobile now needs to be at the heart of any online campaign for the future.   There are many challenges for brands in meeting this consumer need, but one of the core challenges is to keep up with both consumers and technology. 

Both the platforms for mobile/online advertising and the devices themselves are disparate and ever changing.  Consumers themselves are constantly changing how they behave and interact with brands, having been influenced by ongoing improvements in the devices they use. 

Almost everyone (89%) with a smartphone have browsed the phone whilst watching TV, but more than ever this browsing appears to be connected to the programme being watched, with a third making this direct connection between the TV programme being watched and the related surfing at least once a week. 

Consumers are also using their phone while in store, providing a direct connection between consumer and retailer, and possibly presenting a challenge for comparison pricing.  Two thirds of those with smartphones have searched for product and services while in store, while the majority have looked up a product online having originally seen it in store.

But actually delivering direct sales through mobile remains a challenge. According to one industry expert, “Where mobile has a high share of online consumption, it continues to struggle in terms of triggering direct spend.  PC’s are still the preferred choice for bigger purchases”.  Mobile advertising then has to encourage the short term transactional purchase, but can’t necessarily deliver the final sale. 

So what is the best way to reach consumers through mobile?  The experts say, “Consumers go online in the morning when turning off their alarms, then when commuting to work then at lunch and again late evening.”  The challenge for advertisers is to think about mobile as a consumer connection point throughout the day, and develop campaigns that meet this varying need. 

According to the experts this doesn’t necessarily mean a rush to develop your own app.  Just 13% of all of the time spent online by consumers is through apps, but it does represent a large chunk of the time spent online through a smartphone.  While developing an app for your brand provides a tangible end product to show to the board, the reality is that apps don’t necessarily deliver unless they provide a clear connection and are relevant to consumers.  “There is a disconnect between app download and usage.  There is a need to have a relationship with an app for usability.” 

Perhaps more important is the need to mobile optimise your brand’s website in the first place.  Almost all smartphone owners (87%) are interested in mobile optimised sites and the experts stress the importance of this when starting on a mobile campaign.  “The entire journey needs to be mobile optimised… a final click to a badly optimised landing page destroys a campaign.“ 

For the future brands will also need to consider advances just around the corner.  Consumers are looking for more speed with 4G high on their preference list, and this will ultimately lead to more ability to stream content.  Coupled with the desire for better “cloud” facilities, it suggests consumers will spend even more time accessing their own personalised content wherever they are. 

Whatever the challenges, it is clear that consumers are open to mobile advertising, as long as it is both valuable and relevant.  In fact 61% of Irish adults believe ads on their mobile are valuable, some way ahead of many other European countries, but key to this is providing value.   

The clear message from this research is that if it isn’t already, mobile has to be at the heart of your digital strategy.  The challenge for brands is fast implementation, while keeping up with consumer’s needs, and ensuring the message is both relevant and provides value.

 

Thanks to contributors including Justin Cullen MD, Radical, Kevin Foley, Commercial Director, Adforce , Fintan Lonergan, MD, O2 Media, Shenda Loughnane, Head of Digital, Aegis Media, Garret O’Beirne, Head of Digital, OMD, Michelle O’Keeffe, MD, Electric Media; and IAB Ireland for commissioning the study.  Full report can be downloaded from the IAB website http://iabireland.ie/