Marketer Perceptions of Mobile Advertising - 2013€¦ · 54.43m at the end of 2013 to 81.90m by...

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Marketer Perceptions of Mobile Advertising - 2013

A second Ovum study for the IAB

Released September, 2013

Eden Zoller, Principal Analyst Ovum Consumer Practice

© Copyright Ovum. All rights reserved. Ovum is an Informa business. 2

This is the second survey based study that Ovum has produced for the IAB’s Mobile Marketing Centre of Excellence (Mobile Center), building on the first, ground breaking survey conducted in 2011. Both surveys were conducted among marketers at 300 US companies active in mobile advertising.

This 2013 iteration uses a fresh sample, provides a B2B and B2C perspective and introduces new questions, reflecting changes that have taken place in mobile advertising over the last two years.

The findings presented in this study provide a unique insight into mobile advertising from a buyer perspective, and the results are once again both positive and challenging.

In a nutshell


A major new feature of our 2013 mobile marketer survey is a break-out view across Business-to-Business (B2B) and Business-to-Consumer (B2C) brands. A consistent theme across the survey findings is that B2C brands are more ahead of the curve than B2B brands, with the latter showing a generally more conservative approach across most parameters.

B2C companies have embraced the most advanced strategies to a much higher degree than B2B companies (see next slide).

Multi-screen advertising is more critical for B2C brands than it is for B2B brands, with 26% of B2C brands saying it was very important compared to 8% of B2B brands.

B2B companies are more conservative when it comes to mobile advertising inventory, with a higher use of static mobile display advertising among B2B brands and than B2C companies.

B2B respondents have a stronger preference for more traditional mobile advertising metrics than B2C brands.

The survey also revealed that B2C brands prioritize mobile's targeting capabilities higher overall than B2B brands. Twenty-six per cent of B2B respondents said they only require high-level targeting for their campaigns compared to only 8% of B2C respondents.

B2B brands are more conservative than B2C brands


B2B & B2C approaches to mobile advertising strategy

41%

27%

23%

32%

9% 19%

27% 22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Business-to-Business (B2B) Business-to-Consumer (B2C)

How would you describe your approach to mobile advertising strategy?

We use mobile advertising on an ad-hocbasis.

It is part of our advertising strategy butwe use mobile campaigns as astandalone activity (i.e. not integratedwith their media).

It is part of our advertising strategy andmobile is integrated with other mediacampaigns (e.g. print, TV, online).

Experimental – it is early days and we are on a learning curve for mobile advertising.


Satisfaction with mobile advertising activities – B2B & B2C

4% 0%

47%

30%

47%

66%

3% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Business-to-Business (B2B) Business-to-Consumer (B2C)

How satisfied are you with the results of your mobile advertising activities?

Completely satisfied

Satisfied

Fairly satisfied

Completely dissatisfied


Mobile advertising budgets continue to rise

Mobile advertising budgets in our 2013 survey sample are more robust and at an increased level compared to those recorded in our 2011 survey. This is very encouraging, particularly in the on-going tough economic climate, which in our view suggests a good degree of confidence in mobile advertising.

In our 2013 survey 16% of respondents had mobile advertising budgets of between $301,000 and $500,000 for the fiscal year, while another 16% had an annual budget of over $500,000 (see next slide).

At the same time, the number or companies with budgets of under $50,000 has fallen over the last two years, from 55% 2011 to 23% in 2013.


Mobile advertising budget for fiscal 2013

23%

16%

21%

24%

16%

What is your mobile advertising budget for the fiscal year 2013?

$151k - $300K

$301k - $500K

$51k - $150k

Less than $50k

More than $500K


Budgets – change over next 2 years

3%

55%

19%

23%

0%

10%

20%

30%

40%

50%

60%

Decrease by less than 50% Increase by less than 50% Increase by more than 50% No change (0%)

How do you expect your mobile advertising budget to change during the next two years?


Multi-screen advertising takes center stage

Consumers are increasingly using multiple connected devices to interact with TV and video, games, information, social networking and commerce. These connected device screens span smartphones, tablets, connected games consoles, connected TVs and in vehicle systems. The marketers in our survey are clearly alert to this trend, with 75% stating that multi-screen advertising is important or very important to their strategy (see next slide) .

Moreover, when we asked marketers in the survey to rank key developments in mobile advertising, responsive design was a top priority, which is consistent with the importance of multi-screen advertising.

Responsive design refers to ads that are designed to change and optimize their layout and visual elements differently across different types of device, desktop and mobile.


The importance of multi-screen advertising

4%

29%

46%

21%

How important is multi-screen advertising to your strategy?

Not important

Slightly important

Important

Very important


Mobile websites dominate – and better use of richer media is in evidence

The use of rich mobile advertising inventory has increased overall in our 2013 survey compared to 2011. In 2013, 35% of respondents reported using rich media mobile display ads and 19% mobile video advertising (see next slide).

Mobile websites continue to be the most popular type of mobile advertising inventory, underscoring the fact that mobile optimized websites are still the main way that consumers interact with brands via mobile.

Use of static mobile display advertising has declined across the two surveys, with 49% of respondents using it in our 2013 sample compared to 77% in 2011.


Use of mobile advertising inventory

49%

35%

70%

41%

29% 27%

44%

19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

What types of mobile inventory do you currently use for mobile advertising?


Marketers desire a wide range of targeting insights

The survey confirmed the importance to marketers of mobile's ability to enhance campaigns with its targeting capabilities. Eighty-three per cent of respondents said mobile targeting was important or very important.

Marketers in the survey desired a wide range of targeting insights but with a slightly stronger preference for detailed demographic information, while location based targeting as a whole received good levels of support (see next slide).

An intriguing finding when it comes to location targeting is that although brands place a higher priority on general rather than specific location insights, they rank device support for precise location/navigation as a top priority (see slide 18). This is not necessarily the contradiction that it might at first appear. Although marketers today might find general location targeting insights adequate, devices should nonetheless have the ability to support precise location/navigating features that can be leveraged going forward.


Targeting attributes desired by brands

12%

15%

14%

10% 10%

11%

13%

7%

8%

What types of targeting insights are most useful for your mobile ad campaigns?

We only need very high level targeting for ourcampaigns (ie no deep insights required)

Detailed demographic information

General Location information - (e.g. geo-locationaware)

Location-specific information (e.g. geo-fencing)

Device operating system in use

Insights into consumer preference and usage ofnative applications

Insights into consumer search and browsingbehavior

Insights into a consumer’s usage according to time of day

Insights into a consumer’s usage according to the type of mobile device used (tablet, smartphone, feature phone)


Tablets are becoming a priority device

Marketers in our 2013 survey ranked smartphones as the highest priority device for their current mobile advertising campaigns, just as they did in the 2011 survey.

But what has changed over the last two years is the increasing importance of tablets to mobile marketing. In 2011 only 31% of respondents said tablets were a priority device compared to 51% in 2013 (see next slide) Moreover, 75% of respondents in our 2013 expect to see their use of tablets increase over the next two years.

This is not surprising given the increasing popularity of tablets with consumers and also the rich, immersive mobile advertising experiences that tablets can offer brands.

Ovum's forecasts from 2012 predict that in North America alone tablet shipments will rise from 54.43m at the end of 2013 to 81.90m by the end of 2017.

B2C marketers retain more focus on featurephones relative to B2B: while 45% of B2B marketers say those devices are not a mobile marketing priority, only 19% of B2C marketers say that.

In 2013’s survey asked about in-vehicle systems as a relatively new or less established type of connected mobile/portable device As our 2013 results show, respondents think it is too early today for significant opportunities for mobile advertising in the connected car environment: 42% of total respondents said it is not a priority, while 29% viewed it as low priority.


Current prioritization of key connected device categories (2013)

25%

1% 3%

42%

30%

11% 11%

29%

31%

25%

35%

23%

14%

63%

51%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Feature Phones Smartphones Tablets Cars

What type of mobile or portable device advertising are you currently targeting with your mobile ad campaigns?

High priority

Medium-high priority

Medium-low priority

Not a priority


Location, location, location

What is very clear from our 2013 survey is how important marketers consider location/navigation related device capabilities, with precise location/navigation scoring highest in terms of the most quoted top three features (54%) while broad navigation features also gaining a solid rating (35%). See next slide.

Respondents also looked favorably on devices that support NFC capabilities (42%), which is in line with wider, growing interest in mobile proximity marketing activities such as coupon and discount redemption.

Video capabilities scored well, albeit not top, in both surveys - third placed in 2013 and fifth in 2011. This is in line with the fact that although mobile video advertising is gaining traction, it is not as established as many other formats.

The biggest differences across our 2011 and 2013 surveys is the diminished importance to 2013 respondents of device support for email, social networking features, screen size/resolution, good quality camera and browsing. We do not think the is because these features are no longer deemed important, but rather that they are now standard in most smartphones meaning that marketers are focusing more closely on other capabilities on the wish list.


Top ranked device features

35%

26%

6%

32%

54%

42%

27%

4% 7%

37%

27%

6%

0%

10%

20%

30%

40%

50%

60%

What are the three most important device features and form factors for mobile advertising? (most quoted )


Use of agencies for mobile advertising is still modest

The use of creative agencies among our 2013 survey sample stood at 52% compared to 38% for marketers in the 2011 survey, which is positive progress.

But the use of media buying agencies for mobile advertising remains static at fewer than 50% of respondents across both surveys. This relatively low reliance on agencies for mobile advertising could be linked to the perception cited in both surveys that agencies lack mobile expertise.

However, we think this could be more a perception than reality, as those brands that do use agencies report very high level of satisfaction (see next slide).


But high satisfaction with creative agencies when used

2%

20%

70%

8%

How satisfied are you with your creative agency’s ability to support your mobile advertising objectives?

Completely dissatisfied

Fairly satisfied

Satisfied

Completely satisfied


Brand awareness still the top objective for mobile advertising The mobile advertising objectives deemed to be the most important are very consistent

across both our 2013 and 2011 surveys. The top ranked objective across both survey samples is the use of mobile advertising to increase brand awareness. See next slide for 2013 results.

This is followed, with a slight variation across the two surveys, by driving sales in general, increasing engagement with a product or service, increasing brand awareness and customer relationship marketing.

In the 2013 survey we introduced further granularity with the addition of some new objectives for respondents to choose from, and of these the use of mobile advertising to support new product announcements or updates had the most resonance with respondents (39%). This makes sense as people carry their handsets with them all the time, making mobile devices a highly efficient, immediate way to reach people.

The marketers in our 2013 survey expressed a good degree of satisfaction with the results of their company's mobile advertising activities, with 61% of respondents saying they were satisfied while 34% were fairly satisfied. This is very close to the findings in our 2011 survey,


Mobile advertising objectives

93%

86% 83%

86%

77%

1% 0

10

20

30

40

50

60

70

80

90

100

Increase brandawareness

Increaseengagement

Drive sales ingeneral

Support forspecific

promotions

Customerrelationshipmarketing

Other

What have been the objectives(s) of your mobile advertising activities to date?


Perceived challenges easing but there is still work to be done

Although marketers' views on the key challenges for mobile advertising have remained largely consistent across the 2013 and 2011 survey, the degree of concern has receded in our 2013 sample (see next slide).

Device operating system (OS) fragmentation is seen as a high importance challenge by 23% of respondents in 2013, compared to 39% in 2011

Privacy issues are seen as a high importance challenge by 22% of respondents in 2013, compared to 40% in 2011

Lack of standardized advertising metrics are seen as a high importance challenge by 13% of respondents in 2013, compared to 31% in 2011

Lack of agency expertise in mobile advertising is seen as a high importance challenge by 15% of respondents in 2013, compared to 21% in 2011

This is positive progress but there is clearly more work to be done in addressing these on-going challenges.


Key challenges for mobile advertising

7% 7% 7% 9% 11% 7% 8% 12%

35% 25%

36% 34% 34% 40%

26% 26%

31%

25%

55%

48% 47% 42%

40%

44% 43%

46%

29%

13% 9% 12% 15%

9%

23% 22%

11% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Lack ofstandardized

metrics

Lack ofstandardizedadvertising

units

Difficult tocreate mobile

richmedia/videoad creative

Lack of agencyexpertise in

mobileadvertising

Limitedopportunitiesfor creativity

Deviceoperating

systemfragmentation

Privacy issues Lack of global,mass market

inventorybeyond SMS

Other

What do you see as the key challenges for mobile advertising from a brand/buyer perspective?

High importance

Important

Fairly important

Low importance


Benefits of mobile advertising: Cost Effectiveness, Immediacy, Reach, Engagement

2% 1% 2% 3% 7% 7% 5% 4% 3%

35%

14% 13% 16% 13%

27% 25% 19% 24% 26%

22% 48%

43% 40% 47%

44% 46% 49% 44%

52%

21%

36% 42% 43%

36%

22% 22% 27% 28% 20% 22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

What are the key benefits of mobile advertising from a brand/buyer perspective?

Very important

Important

Slightly important

Not important


Key developments in mobile advertising

4% 6%

20%

5% 9% 10% 7% 17% 6%

15%

19%

10% 12%

16%

9%

5%

33%

40%

30%

37%

40% 34%

38%

8%

54%

31% 25%

40% 27% 21% 36%

11%

4% 8% 7% 8% 13%

20% 10%

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Responsivedesign

Programmaticbuying

Real-time bidding HTML5 Mobile risingstars

MRAID Mobile nativeadvertising

Other

How important are the following developments in mobile advertising?

Do not know

Very important

Important

Slightly important

Not important

Marketers view responsive design, HTML5, and native advertising as important mobile developments.

IAB’s mobile rising stars are considered important or very important by 67% of marketers surveyed.


Mobile advertising 2013 – one word summary

What is immediately striking is how dynamic and vibrant mobile advertising is seen to be. Marketers perceive mobile advertising as effective, positive, innovative, growing fast changing and exciting.

But they also note that mobile advertising is still emerging and that it can be fragmented and confusing, which is arguably the flip side of such a dynamic environment.


Background to the survey: objectives

The IAB’s Mobile Marketing Center of Excellence (Mobile Center) wanted to provide members and the wider industry with insights that will help them better understand how mobile advertising is perceived by marketers.

For example, the IAB Mobile Center wanted to discover what marketers spending plans are for mobile advertising and what they think needs to be done to further improve the appeal of this medium. It also wanted to explore marketer attitudes towards targeting, multi-screen advertising and mobile advertising metrics, among other things.

In response Ovum conducted two wide ranging, detailed surveys of the mobile advertising market as seen by marketers active in this area. The first survey was carried out in 2011 and followed by second iteration in 2013, enabling the IAB Mobile Center to show how attitudes towards, and use of mobile advertising is trending and changing over time.


Survey methodology

The survey is based on a quantitative primary research program with 300 US organizations that use mobile advertising. The sample included an even mix of companies in terms of revenue size, and with a balanced split across Business-to-Business (B2B) and Business-to-Consumer (B2C) companies.

The survey only included companies active in mobile advertising and respondents to the questionnaire were marketing executives with either:

Final decision making authority for some or all of our mobile marketing requirements

Influence some or all mobile marketing decisions.


About Ovum

Ovum is one of the world’s leading ICT research and advisory businesses. We have over 150 analysts spanning the telecoms and IT marketplace with offices based in many geographical locations across EMEA, US and Asia Pac.

Ovum offers research and advisory services (R&A) and consulting. R&A is based on core practice teams that together cover the whole of the telecoms, media and IT value chains providing insight into markets, customers, strategy and competitors. Ovum’s 10 telecom practices include consumer, wholesale, enterprise, regulation, Telco strategy, networks, devices and components. Ovum’s IT practice includes outsourcing, IT management, information management, security and lifecycle integration.

The majority of Ovum’s analysts have 10-15 years in industry (many 20+ years), which means that our advice is grounded in industry practice and established expertise. Ovum research is based on independently audited methodologies that ensure that our clients can base decisions on rigorous and fact-based research.


Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Ovum (an Informa business).

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Marketer Perceptions of Mobile Advertising - 2013€¦ · 54.43m at the end of 2013 to 81.90m by...

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