When Google chief executive Eric Schmidt talks, people tend to listen. In January 2008, the search giant went public about its ambitions for mobile search when Schmidt told heavy-hitters at the Davos global economic conference that mobile advertising was poised for a “huge revolution”. Google is rarely wrong, but some industry analysts questioned Schmidt’s wisdom. Today, however, the feeling in the industry is that the revolution is (almost) here, and that Google will play a crucial role in it.
Schmidt based his prediction on the imminent arrival of location-based services that would allow a shop or restaurant to advertise their wares to passing shoppers. With several high-end phones supporting GPS today, experts say the technical challenges are largely overcome.
Two other factors are also driving this market: the growing take-up of smartphones, which use 3G broadband connectivity to offer a fast web connection, and the popularity of downloadable applications.
Apple has been key to this, of course. Its “Apps for everything” slogan is not overblown hyperbole – the latest figures show that iPhone users can now download over 100,000 different programs. Industry experts believe such applications will be a key battleground for mobile advertisers over the next few years.
“The people who code these applications need a revenue stream, especially as a lot of them are given away for free,” explains Alastair Macmichael, business development manager at DMG, one of the UK’s biggest digital marketing agencies.
Placing an advert on the search page of a mobile operator has significant limitations, as Macmichael sums up: “We don’t know if the people who see it are 16 or 60.” But applications enable brands to target their demographic of choice by running an ad within a cookery program, an instant messaging service or a popular computer game. In the world of the app, context is king. Google has already made some moves into this area – in June it launched an early version of its Adwords service, which allows companies to design adverts to be inserted into iPhone applications.
With sales of all smartphones outpacing the wider mobile market, David Sidebottom, senior consultant at Futuresource Consulting, forecasts that increased competition between Apple, Nokia, RIM (which makes BlackBerry mobile devices) and manufacturers who use Android – Google’s mobile-phone operating system – will keep this market growing into 2010 and beyond. “Today, 20% of people in the UK regularly access the internet on their mobile phone, and we have calculated that this will have almost doubled by 2013,” he says.
Although there is no standard definition of a smartphone, they all share some key features, including a large, high-resolution colour screen, fast internet access through a web browser, and a range of multimedia applications, including video. The goal is to provide the full fuctionality of a desktop PC while on the move – which is certainly very appealing to mobile advertisers, but not without its dangers. “People are still finding their feet,” Sidebottom explains, “and privacy is a big problem. People have their phone on all the time, so bombarding them with advertising messages can soon make people feel harassed.” The solution, he argues, will be to persuade customers to opt in to receiving mobile advertising.
In Latin America, mobile operator Claro Brazil has started offering customers the chance to choose to receive full-screen adverts at the end of every call. In return for signing up and handing over personal data to help with targeting, they get loyalty points. If that idea works, expect more operators to follow.
Mobile targets
Google’s dominance of the internet search market means investors are tracking its mobile ambitions closely. Jonathan Rosenberg, Google’s senior vice-president of product management, has told analysts that mobile search in Japan was already growing twice as fast as on the desktop. He has also admitted that squeezing more adverts on to the mobile version of its Gmail site would be a struggle.
The future of mobile advertising is also heavily dependent on social networking sites like Facebook and Twitter. The number of people using mobiles to access these sites has risen by more than 130% over the past 12 months, according to the Internet Advertising Bureau.
Facebook is in an excellent position to profit from the growth in mobile advertising because of the amount of data it holds about its members, according to Macmichael. “Facebook has the lead,” he says. “It already knows so much about me; who I am, who my friends are, and the pages I go to.”
Back in January 2008, Schmidt told Davos he could see a time when his mobile would alert him when he was close to a hamburger chain at lunchtime – and remind him he had a pizza yesterday. Could this happen soon? “From a technical point of view we’re not far away, but it could be one or two years before we see anything like that commercially available,” says Sidebottom. “Getting customers to buy into it is a challenge.”
Macmichael is more optimistic. “It’s very close.” He believes Google’s recent launch of a personal navigation application for Android smartphones means many more handsets will soon offer advanced mapping tools.
If that fails to whet your appetite, there is another possibility: augmented reality. Imagine looking through the camera view on your phone, and being shown information about the things you can see: restaurant reviews, train timetables or shop opening hours. According to Sidebottom: “In two to three years these services will start to become commonplace, probably from brands that we’re already familiar and comfortable with.”
There is a snag, though, and it is one all mobile users can sympathise with. “Running the camera, the GPS and the electronic compass all take their toll on the battery.”
Source: http://www.guardian.co.uk/mobile-marketing/mobile-habits-environment