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What will drive mobile marketing & advertising in 2011?: Abhay Doshi, Senior Director, Products and Marketing, FLYtxt

January 18, 2011
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Welcome to 2011! With the New Year unveiling, it’s about time we lay out a few trends which we believe will shape mobile marketing and advertising in 2011.

1. Relevance will be the key revenue driver for new mobile based services:

With advanced trends such as Location-Based Services (LBS), Augmented Reality (AR), Mobile internet, Mobile TV and influence of social media, the success of advertisers and brands will be defined more by “Relevance” than “Reach or Frequency.”  In 2011, we will see advertisers combining the demographical, behavioral, geographical and contextual attributes which are unique to a consumer to transform campaign from an ‘ad’ to a ‘personalized brand experience’. Products and services marketing will be customized to cater to individual tastes & preferences.  To give an example, an augmented reality listing of restaurants in a particular street will be replaced by ads informing about specific restaurants that serve consumers’ favorite cuisine in his/her preferred price range with discount coupons and offers.

2. Innovative Mobile Operators will become integral part of mobile advertising eco system:

Mobile operators have an unprecedented opportunity to play a key role in mobile advertising value chain by exploiting the natural advantages they possess in terms of reach, subscriber insights and access to multiple consumer touch-points.  Amidst all the challenges mobile operators face such as sustaining ARPU levels, managing customer churn, combating threat from OTT (Over the top) service providers and monetizing the capacity they own, they will gradually shift their focus to advertising as a huge opportunity, and slowly their role will evolve from that of a dumb pipe provider to a media owner. 2011 will see operators’ increased focus on specialized technologies and more partnerships, which will bring operators in the center of mobile marketing and advertising eco-system.

3. Increased in Privacy & SPAM Awareness amongst Consumers will drive regulatory initiatives in the area:

The influence of mobile marketing on the consumers will be driven to a great extent by initiatives adopted by industry and regulatory bodies to protect consumer privacy and control SPAM. Developed markets have had regulations in place for a long time now. Regulatory bodies in emerging markets are also now waking up to the challenges posed by SPAM.  Many industry associations like MMA and governments in several countries like India have come up with stringent mechanisms to monitor and regulate commercial messaging across channels including SMS and Voice.  2011 will see the accelerated initiatives from Industry players towards SPAM Control and privacy protection by enforcing mechanisms such as DND lists and Opt-in/Opt-out functionality. 2011 will also see priority on consumer data security across channels including social networking sites, mobile applications, m-commerce transactions or pure operator consumer data.

4. Rise of Operators with innovative business models that challenge existing ad network models:

With mobile slowly taking the center stage in advertising arena, there will be innovative business models and partnerships that will try to optimize the mobile opportunity collaboratively. We are already seeing partnerships between the Advertising Media firms, technology companies and mobile operators. Coming together of different players will strengthen the mobile ad eco system and deliver more value to various players.

We are already seeing significant activity in this space, and this trend will pick up momentum. Such partnerships will directly compete with the existing Ad network business models such as Admob, InMobi and Millenial Media, by providing advertisers better reach, better targeting and touch points which are much more personal.

5. Rise of mobile based coupons, loyalty programs & deals:

Mobile couponing is a more powerful medium to drive footfalls into retail stores than traditional paper based couponing. With the increase in the adoption of 3G, we would see the rise of coupon based loyalty programs by brand advertisers and big retailers via innovative means like QR codes. Major brands like PEPSI have already QR codes to share additional content and information with consumers to drive brand loyalty, we will see innovative campaigns like this being adopted at an even higher rate in 2011 with mobile being the driver. With the rise of innovative local deal players like Groupon and Foursquare on the rise, we will see more of these models replicated, with mobile driving the growth.

6. Video insert Ads on mobile will see success in emerging markets:

Many predictive stats tell the story of video’s increasing significance. According to ABI Research, mobile video will attract the most attention from mobile marketers, This will be especially true for emerging markets where there is a huge uptake for mobile internet due to launch of 3G. In India, for instance, mobile internet makes more than 50% of total internet usage and number of mobile phone users is more than 7 times higher than the number of people accessing internet.

Standardization of Video Ad formats for mobile, we believe, would be one of the driving factors that will eventually make mobile Video Advertising a success in 2011.

7. Incentives based opt-in & ad sponsored content would become more popular in emerging markets:

It is a proven fact that the consumers are receptive to promotional communications on their mobile only if it is relevant to them or they are given some incentives in return. But incentives do not ensure that ads reach the target segments. As a solution to this, more effective models based on opt-in driven incentives are becoming popular. Models which failed in developed markets will prove to be successful in emerging markets like India, where the youth makes up 55% of total population.

Similarly paid content model is not very popular in emerging markets. Content owners are exploring innovative ways to monetize their content. Ad funded content distribution seems to be gaining currency both with advertisers and users. Sponsored content will become successful in emerging markets with advanced platforms helping advertisers associate with right content to connect with their targeted audience.

8. Viral strategies via social media on mobile will see a steep rise:

Mobile devices, mobile phones and PDA’s are the latest great frontiers of viral advertisement opportunities. With more users hooked on social media networks via mobile internet, mobile will evolve as the most effective channel for viral advertising.

eMarketer project worldwide spending of $3.3 billion on social networking sites in 2010 is an indication of the potential of mobile viral marketing.

In June 2010, ComScore identified social networking as the fastest-growing content category across mobile applications and browsers. More than 30 Percent of Smartphone Owners Access Social Networking Sites via Mobile Browse

With advertisers doubling their reach through users accessing mobile internet, the addition of social media sharing options on rich media ads increases the viral reach of their brand across increasingly popular social networking sites.

9. Increase in adoption of QR code by Advertiser and acceptance of it by Consumers:

A QR Code (Quick Response Code) is a matrix barcode (or two-dimensional code), readable by QR scanners, mobile phones with a camera / Smartphones with QR reader.

Smartphone manufacturers and mobile OS are pre-installing QR code readers on their phones and more phones having internet connectivity will spike the QR codes popularity. The codes leads consumers to website, product demos, videos, the brand’s Facebook or Twitter page, and some even  to mobile commerce sites.

We believe that QR Codes will be integrated in ad formats across channels, be it print, outdoor, internet or mobile, making mobile phone (QR code reader) a critical communication channel for brands (advertisers).

10. Location based mobile ads and services will become more sophisticated:

The convergence of 3G enabled Smart phones, Mobile Technology and Location based services will continue to increase and become more sophisticated. Companies will get better at creating and distributing real time offers, to specific individuals, who appear on site at a specific location, at a specific time, thereby influencing consumer behavior and creating real time demand. Mobile social networks will then act as medium to make offers go viral. It will shift part of social experience off the web and back to an in-person experience. This will deliver the true one-on-one marketing experience, originally promised in Web 2.0, but until now, not truly delivered.

11. Mobile App Inserts will become popular in North America without a clear winner though:

According to Mobclix, more than half a million apps are downloaded every hour and the average smartphone user has 22 of them. With the onslaught of app stores, including Blackberry App World, Android Market, Windows Marketplace for Mobile, the App Store for Symbian, the Palm app store, and, of course, Apple’s iPhone app store, shows that apps flavor of the season.

Google and Apple are the two big players who will steer the future and growth of app insert advertising. Other players like Palm (bought out by HP) and Microsoft, Nokia and Blackberry seems to be nowhere when compared with the Android (Android Market) or Apple (App Store).

Apple’s iPhone App Store is much larger in size than the Android Market. It houses more than 300,000 applications and games while the Android Market features just 130,000 or so. But Android leads the market in terms of volume of phones in the market. By the end of 2011 we will  see Android catching-up or overtaking total app downloads due to growth of Android phones compare to iphones.

Having said that iAd will still continue to command premium versus android ads, mainly due to the type of high-end customer segments iphone caters to whereas Android is now available to masses.

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