Smartphones Explained: The Advertiser Perspective - Eswar Priyadarshan, CTO

Eswar Priyadarshan, CTO

This is the third in a series of posts providing perspective on the rise of the Smartphone. The first post defined the Smartphone space, the second post provided a Point of View from a Publisher’s perspective and this post will switch focus to the Advertiser’s perspective.

 

All of us enamored of the mobile channel and mobile advertising have been waiting for the elusive ‘year of mobile advertising’. Well, let me go out on a limb and call it – 2010 will be the year of the mobile internet and mobile advertising, thanks, in no small part, to the emergence of a large and growing Smartphone market. Is it the devices themselves that draw advertisers? Or is it the full browser on new phones? Or is it the emergence of Apps on Smartphones? What dots should the mainstream connect to determine if the Smartphone means that it’s time to get serious about mobile?

Advertisers of all stripes, be they brands interested in brand awareness or direct response advertisers interested in conversions and sales, all crave a large, engaged audience that is hungrily consuming content and quite happy to click on its fair share of ads. Smartphone users are exactly that – all day mobile content junkies that devour all manner of content voraciously worldwide. Our recent Mobile R.O.I. Report for Brands demonstrates how this audience consumes more ad impressions than sales data would indicate, and also clicks more on advertising. Their appetite is supported by two key pillars – first, the unlimited data plan and only then, the device.

Back in the day when the arrival of a new rock album was the subject of breathless adulation on part of the media and the fans, the band was the focus of the fan base (myself happily included), with very little attention paid to the producer – the person to have secured the deal and very likely to have really made it happen and drag our beloved heroes (or heroines) across the finish line. The modern version of the new album release appears to be the new Smartphone release, with the screen size, keyboard, camera power and apps serving as the glamorous band. The unsung Producer in the back room? I believe it’s the far less glamorous but far more potent unlimited data plan. When we analyze traffic across the Quattro Network, the audience that always “over indexes” in terms of ad impressions is the unlimited data plan audience – be it iPhone and Blackberry users, but also Cricket Wireless, Boost and Metro PCS users without Smartphones, but with the appetite and ability to surf all day. Just so happens that most Smartphones ship with all-you-can-eat data contracts, ergo reason #1 for the Smartphone audience being a data hungry audience.

Now that we have uncovered the fuel behind the fire, let’s talk about the devices themselves. The Smartphone platforms coming out from Apple, Google, RIM and other players present an untapped rich, accountable interactive and personal marketing channel.

• Large displays with an integrated full keyboard running on high-speed networks with an option to run on Wifi = no limitations on content size and display size
• Complete corporate and personal email and messaging = a consumer that’s on the device all day and night
• Powerful browsers and support for rich media such as video = no limits on creative options
• “Native” App capabilities made available to advertisers = the ability to provide user experiences that match a built-in application
• Location awareness , offering targeting down to the street block level if the user allows local offers = the ability to think about a rich consumer relationship while he or she is unfettered by professional or domestic obligations
• And it’s with you all day – probably less replaceable than your wallet or purse with credit cards and other personal effects. Best Buy Mobile recently sponsored a survey where consumers revealed their Smartphone passion in interesting ways, including 60% who said they would abstain from alcohol before they gave up their Smartphone.

Ask yourself, marketer, why are you waiting? The Smartphone is a perfect way to showcase your brand or your offer on a rich, fully accountable medium.

Assuming that you agree that Smartphones seem like a great platform to execute a mobile advertising marketing strategy, let’s switch focus to tactics. How do you best harness the platform? Should you build an app or a site? How and where should you target and run ads? And where do you get analytics to help understand what worked and what didn’t?

The mobile social networking firm Brightkite released a report in May, 2009 that showed much higher mobile ad recall rates on Smartphones vs. all phones (59% vs. 38%), with display ads on the mobile web being the dominant format (vs. SMS). The display ad world on Smartphones has rapidly grown in size and capability even since May of this year, with much greater reach of display and rich media ads on both mobile web and Apps. Very straightforward to conclude that display advertising on the mobile web and in apps is a good place to get started with Smartphone ads.

App vs Site? Lots of money being spent by brand marketers on building iPhone apps for inclusion in the App Store. Unfortunately, a majority of them seem to be a use-once novelty exercise designed more to show off a coolness factor amongst fellow marketing and agency colleagues than any serious exercise at achieving consumer reach and engagement. My recommendation would be to mix both mobile web and app executions to achieve maximum ROI – mobile web for reach across all Smartphone platforms, perhaps some more eye-catching/engaging rich media units that span both web and app and finally a branded app tailored at longer consumer lifetime value and usage.

An ad network like Quattro provides targeting options to ensure that the entire mix of your Smartphone ad inventory can be optimally targeted and tracked. We go a step further and ensure that the ads can be trafficked directly from your existing DoubleClick, ATLAS, etc. buy-side platforms. Your rich media units can run across the iPhone and Android Super Smartphones, while all other display inventory can run across all Smartphones.  We can ensure that you target specific wireless carriers, manufacturers, models, release dates, operating systems and the like within the Smartphone world. Advertising to promote download of apps that you build can be targeted to run within other apps with full conversion tracking capability. We shall soon be adding more sophisticated targeting and re-targeting capabilities around the download history and app mix on specific devices.

Finally, we turn to analytics. Quattro Wireless has long-served as the ad serving and post-click analytics partner of major brands such as P&G, Ford, Coke and Sony. We have also driven considerable traffic to major direct response advertisers such as Papa John’s Pizza and Netflix. We therefore have a good, realistic assessment of these advertisers’ key needs now and going forward.

Major brands are all about who and why. P&G Household Products marketers care about Moms. Major supermarket advertisers care about Moms only in the geographic areas where they have stores. Major movie studios target Teens on Thursday nights with ads for movies that open Friday. These simple examples are just the tip of the iceberg on the degree of audience segmentation and analysis that major brands require from their advertising and analytics partners. Mobile analytics for major brand advertisers, particularly on Smartphones, means (a) the ability to as accurately as possible identify unique mobile visitors, (b) provide a rich set of site traffic and engagement metrics about these visitors, (c) provide tons of mobile specific drill-down in terms of mobile devices, carriers, classes of devices (touch screen, QWERTY keyboard, video enabled etc.) and (d) provide additional insight on engagement by various audience segments.

Quattro Wireless’ analytics tools provide solutions to all four classes of problems above.

The aggregate audience across all Smartphone platforms is intuitively a desirable, technology-savvy audience with some degree of above average “spend ability”. This intuition is borne out by studies such as the one done by Digital Life America a few years ago that showed the average income for Smartphone users is 50% higher than the national average. Additionally, Smartphone users tend to have a higher education level than the average population. Given the desirable income and demographic status of this rapidly growing audience, Agencies and advertisers interested in harnessing the rapidly growing mobile channel would be smart to step onto the “unwired planet” via the Smartphone.

Before I conclude, I would be remiss to omit mention of the “mother of Smartphone wars” that is already upon us and likely to kick into white-hot pitch with the Verizon Wireless/Motorola Droid launch on November 6, 2009 – the battle between Google Android and the iPhone, with RIM playing a worthy third contender. Marketers and advertisers take heed – vast sums of money from hugely capitalized companies are being poured into creating this intimate yet scalable marketing channel. Investments made now in learning and taking advantage of this channel will bear fruit for many years to come on both a local and a worldwide basis.