By now it should be no surprise that mobile device usage is high, and that Kiwis on the whole really enjoy using smartphones. According to Research New Zealand, in 2014 around 90 percent of Kiwis owned at least one type of mobile device and 64 percent of us preferred our smartphones over any other type of device. And unlike other types of devices—and different media channels—that have usage spikes during different day parts, surveys like TNS’ Mobile Life show that, even in New Zealand, mobile usage remains steady and relatively high throughout the day.
Figures released by the Interactive Advertising Bureau (IAB) for 2014 indicate the year was a bumper one, growing 198 percent year-on-year in the second quarter alone. But it still only accounts for roughly three percent of the total interactive category ad spend. If dollars follow eyeballs—and there are a lot of eyeballs on mobile—why isn’t ad spend higher?
“New Zealand has gone through, as we all know, quite a difficult economic period in the last few years. That, and other things, means that mobile is being chronically under-utilised,” says Graham Christie, chief commercial officer at Big Mobile, an Australasian mobile marketing company with offices in Auckland, Australia and Singapore.
Perhaps because of the pervasiveness of digital media in our lives (the average smartphone user reaches for their phone around 150 times a day), there’s a growing trend towards digital detoxes and an acceptance that this screen dependence isn’t healthy. According to digitaldetox.org, heavy internet users are 2.5 times more likely to be depressed, and high levels of social media usage can increase loneliness, jealousy and fear. So it’s little surprise the idea is gaining traction. Schools have imposed detoxes on their students, corporations pony up for detox retreats for executives and new age hipsters ditch their devices in favour of more ‘authentic’ communication and time spent solo. Smartphones have become so indispensable to our lives that the backlash, such as it is, is hardly going to impact the industry, but it might be good to practise some mobile moderation in our own lives. Comedian Megan Mullally suggests throwing your mobile in the toilet, the toilet in the trash, and then burning your house down to get away from your phone’s incessant influence. If that’s not your style, here’s what we recommend instead:
False attention economies
Christie says there are a number of issues behind the lack of mobile advertising uptake in the Kiwi market, not just the memory of more difficult economic times. There’s also a talent deficit and shortage of New Zealand-specific research, both inevitable results of a small population that leaves us short of people able to guide us to the bleeding edge of mobile advertising practice. “It has made a market that is more hesitant to look at mobile as aggressively as perhaps other markets have—and most of those reasons are perfectly understandable.”
To be fair, New Zealand marketers aren’t alone in their underutilisation of the mobile toolbox. The IAB’s American counterpart released figures comparing percentage of time spent with various media types versus their percentage of advertising spend for 2013—and the results, though perhaps unsurprising for those paying close attention, do serve as a good illustration of the point.
Despite consumers spending 20 percent of their time with mobiles, it accounted for only four percent of ad spend. The story is better for the wider internet, which accounted for 25 percent of consumer attention and 22 percent of ad spend (likewise, radio attracted slightly more attention than ad spend). Both print and television, on the other hand, attracted significantly more spend
Beyond the banner
The effectiveness of banner ads are being questioned. And the same is true of mobile banner ads. Back in 2012, a study by Goldspot showed 50 percent of clicks on static mobile banner ads were accidental, although Google made efforts to address ‘fat finger syndrome’—and ad fraud—by adding an extra step when users clicked around the edges of an ad. This is leading to different solutions, such as rich-media ads or, increasingly, native ads. Companies like Facebook are actually increasing their overall revenue on the strength of mobile ads, largely through sponsored posts and the rapid growth in mobile video consumption. Perhaps counter-intuitively, the social media stalwart actually reduced the amount of mobile ad inventory to create scarcity. Advertising Age reported this move, while controversial internally, forced it to focus on quality over quantity, and enabled it to charge a premium for it. So effectively, it sold less ad space for more money. Mobile ad revenue currently accounts for 69 percent of its total overall revenue, and all indications are that will continue to grow.
"My observation is that many New Zealand businesses have got some serious catching up to do around redesigning their brand experience so that it’s optimised for mobile, whether it’s their digital campaigns, their social campaigns, or their website,” she says. “Because essentially, if 35 percent of people are searching on a desktop [and you only have a desktop site], within the next six months you no longer have a presence as a brand online.” Geri Ellis, Vodafone.
The typically low ad spend on mobile (Facebook notwithstanding) in relation to time spent indicates hesitancies about the medium for many of the reasons Christie outlined. Combine that with its relative infancy as a channel and the seemingly lacklustre offering of ad formats, and it’s understandable why marketers might not want to dive right in—especially with the budget constraints typical to New Zealand. The same doubts existed with online and that’s now a very well established channel. So when it comes to mobile, are the days when marketers could hang back and see how the game plays out over?
Is that a phone in your pocket?
Vodafone’s Geri Ellis is one believer that Kiwi companies need to move faster in the mobile space. She spearheaded Vodafone’s mobile-first digital strategy when she arrived there four years ago, leading development of the MyVodafone app and responsive site architecture. Ellis says the strategy has paid off and, as of December 2014, 65 percent of the telco’s site visits come from mobile, meaning the 35 percent who still visit from desktops are becoming an ever-smaller niche audience. “My observation is that many New Zealand businesses have got some serious catching up to do around redesigning their brand experience so that it’s optimised for mobile, whether it’s their digital campaigns, their social campaigns, or their website,” she says. “Because essentially, if 35 percent of people are searching on a desktop [and you only have a desktop site], within the next six months you no longer have a presence as a brand online.”
At Big Mobile, Christie has a similar perspective. He says investment now in mobile infrastructure and marketing, especially for top tier companies in their categories, will pay big dividends in competitive advantage in just a few years.
“If you manage to do that, you are going to take a cumulative five-year lead just by investing in the next 12 to 24 months because that is just the nature of the marketplace.
You will learn things and be way ahead of the pack by the time the rest catch up.”
Not just a channel
But that still leaves the issue of how exactly to invest that money. In a recent Forrester report, analysts criticised businesses that treat mobile as simply a “scaled-down version of the web”. Mobile isn’t simply a place to put advertising, it’s a potential new revenue stream and customer support channel, combined with an on-the-go location and data component. Forrester even highlighted Apple’s HealthKit and Google Health as potential data sources businesses can use to understand and serve customers better.
Snakk Media’s former New Zealand country manager Alan Oliver says he thinks marketers can be put off mobile precisely because they feel like they’re limited to banner advertising. But he says the real power of mobile comes from the vast audiences it attracts and the ability to target within that. It’s also about harnessing technology to extend and enhance consumers’ existing media habits—so using mobile to synch experiences across television and other media, for example. With mobile, advertisers really have the opportunity to leverage every feature and capability of a device, from speech recognition to haptic feedback and cameras for both their campaigns and their service delivery. And with competition for home screen real estate fierce, push notifications are increasingly being used to remind customers of unused apps or alert them to breaking news at relevant times.
In that vein, mobile agencies are offering more opportunities to go beyond the banner, whether that’s developing second screen experiences to capitalise on viewer habits, or to bring native advertising to mobile ad networks.
“A lot of clients ask us if this is going to be the year of the mobile,” says Oliver. “But with audience numbers and device penetration [being what they are], in reality the year of the mobile has already passed. With so many consumers having these devices, it’s about how their behaviour is changing and how these devices are becoming so much more a part of their lives. In terms of media and marketing, that means bringing out the right technology and trying to understand what role this device plays in relation to other media choices available.
The next big things to come down the mobile tech pipeline are somewhat interrelated: the internet of things and wearables. We’re already seeing how wearables are changing some people’s lives—hopefully making us fitter, happier and more productive people all around. But what does that mean for marketers? With major software companies and device manufacturers all integrating health apps into the latest releases of their devices, what opportunities might there be to connect with customers?
Despite locked down ecosystems and minute displays, Graham Christie, chief commercial officer at Big Mobile, says he imagines there will be possibilities for sponsorship and branded content between brands and devices with synergy. “There needs to be an obvious syncing of interests between the app maker, the app user and the brand, but we have seen these sorts of holy trinities exist in advertising since it began,” he says. Examples may be sportswear manufacturers who can tap into the wealth of actual health data gathered by activity monitors to deliver better experiences.
It’s also conceivable that push notifications will become even more important on the small screens of smart watches. But the trick will be in the balance, and not overwhelming the wearers.
Life’s remote control
Mobile devices aren’t used as much as the desktop internet to complete online purchases (yet) but they are often used to begin the research process, often when out and about. And this is partially why search-related, location-based advertising is so important: businesses need to be able to guide consumers to their points of purchase—digitally or physically—in a location and device-aware way. But that means businesses need to be out in front of consumer desire to search, interact and complete purchases on mobile devices. If an omni-channel approach hasn’t been part of your business’ strategy before now, it’s probably time to reconsider (a change to Google’s algorithm in late April has already punished websites that aren’t mobile-optimised by pushing them down the rankings).
Ellis says businesses that hesitate to implement responsive omni-channel strategies across devices, ones that stay seamless across mobile, desktop and in-store experiences, will lose out. “Your bricks and mortar is becoming more and more dependent on having a mobile experience for your product,” she says. “Because if [customers] are researching online and they can’t find you, then they won’t look for a store. You’re missing out on the foot traffic now as well.”
And a few years down the line, as the Internet Of Things gains a foothold in our daily lives and mobile devices become the equivalent of a remote control for the real world, Ellis says mobile will become less relevant as a device description. She says we’ll talk more about screens than televisions versus tablets, and where to push the content we want to access as and when we want to access it.
“What marketers and businesses really need to consider, as a whole, in a world of connected living is that consumers will ultimately choose the best experience they get—probably starting from a mobile device,” says Ellis. “Everything else is an extension thereof.”
This article originally appeared in the May/June edition of NZ Marketing.
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