The World of Mobile Advertising

THE WORLD OF MOBILE ADVERTISING Dr. Sy Banerjee Assistant Professor Marketing, University of Michigan - Flint STRUCTURE OF THE PRESENTATION Mobile Advertising Industry overview  How Mobile Advertising works  Experience, Experiments and Research on Location and Advertising  Research Implications  Evolution of the Mobile Internet – Changing Marketing Practices; Gypsii and Clickstream  ACTIVE AUDIENCE FOR KEY MOBILE MARKETING MODALITIES (US, NOV 2007) FORECASTED GROWTH OF MOBILE AD SPEND Total Mobile Advertising Spend 20000 10000 0 2007 2008 2009 2010 2011 2012 Total Mobile Advertising Spend 100% 90% 80% 70% 60% 50% 40% Mobile search advertising Mobile display advertising Mobile message advertising 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 SPENDING IN MILLION DOLLARS: MESSAGE ADVERTISING 30000 25000 20000 Asia Pacific (China, India, Japan, South Korea) 15000 Western Europe US 10000 World 5000 0 2007 2008 2009 2010 2011 2012 Mobile Message Advertising SPENDING IN MILLION DOLLARS: DISPLAY ADVERTISING 2500 2000 1500 Asia Pacific (China, India, Japan, South Korea) Western Europe 1000 US World 500 0 2007 2008 2009 2010 2011 2012 Mobile Display Advertising SPENDING IN MILLION DOLLARS: SEARCH ADVERTISING 8000 7000 6000 5000 Asia Pacific (China, India, Japan, South Korea) Western Europe 4000 US 3000 World 2000 1000 0 2007 2008 2009 2010 2011 2012 Mobile Search Advertising RACE AND ETHNICITY BY USAGE TYPE THE MOBILE ECOSYSTEM DIFFERENCES IN THE MOBILE ECOSYSTEM The “content enabler” category: offers transcoding services, assisting publishers in ensuring that their content is viewable and usable across multiple types of mobile devices.  Mobile Carriers : offer customers content portals And provides the network to access all mobile content  Handset makers : complicate the landscape by adding variety of interface designs that campaigns have to fit into.  HAMPTON HOTELS CAMPAIGN GOLDEN COMPASS MOVIE CAMPAIGN NIKE ID CAMPAIGN Nike erected a large, interactive billboard in Times Square. Passers-by could use their cell phones to text in their own custom design and receive a free pair of Nike IDs. In Wheeler and Keenan's video, individuals went nuts when they saw their own shoes posted live on the jumbotron in front of them. Though Nike gave away 3000 pairs of shoes in this promotion, it seems that users were just as excited by their design on the billboard as they were by the free footwear. DISPLAY ADS PRICING MODELS CPM (Cost per Thousand Impressions): Buying based on impressions delivered;  CPC (Cost per Click): Buying based on the number of viewers who click on the ad; and  CPA (Cost per Action): Buying based on some other action by the consumer beyond the click.  SOME INVESTORS Blyk - $50 Million  Admob - $15.7 Million  Transpera - $8.25 Million  Vibes Media- $15 Million  HOW TO SET UP A MOBILE SEARCH ADVERTISEMENT COST COMPUTATION Keyword directed campaigns  Cost = CPC X number of clicks  CPC is the achieved cost per click based on auction  Number of clicks depends upon Position of the Ad. Position of the Ad depends on:  How much I am willing to pay per click (more the better)  Relevance of Keywords  Historical Keyword performance  Click Through Rate (CTR) Website Directed Campaign : CPM COST TO ADVERTISERS Average cost of US Mobile Marketing Campaign ($) 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 Average cost of US Mobile Marketing Campaign ($) 10,000 0 2005 2006 2007 CPM Range : 10$ to 50$ CPM Modal Range : 20 to 35 $ CPC = 1 $ per click SETTING UP A MOBILE COUPON PROMOTION-1 SETTING UP THE MOBILE COUPON PROMOTION -2 BAR CODE ENCODINGS UCC (Uniform Code Council) Prefix  Manufacturer number  Product Family Code  Value Code  Household ID  Functions:  Delivery  Redemption  Clearing BAR CODES APPLICATIONS Propriety printed media: Use mobile bar coding as business cards, tickets (e-ticketing), billing, coupons, gift certificates and more. Mobile advertising of products: Discount vouchers on beverages, CD's, books, games and more. Client presents his mobile phone at pay point - bar code is scanned and discount processed. Mobile bar coding during events: Ease the administration tasks during events - whether it is a cycle race, running event or conference. Example: Delegates sign up and pay online via a web site. As confirmation they receive a barcode on their mobile. The delegate save the file on their phones and produce it upon registration at the event. Mobile bar coding used for public transport: Users purchase a month ticket - they receive a barcode on their mobile phones which they save - every time they enter the bus their phone is scanned and the trip deducted from the month ticket. EXPERIENCES, EXPERIMENTS AND RESEARCH CONNECTING A WORLDWIDE PHENOMENON 2006 Philadelphia NYC 2007 MP 2000 RESEARCH: ARE OUR INTERNET USERS IN MARS OR VENUS? TWO DIRECTIONS Individual differences in how to resolve physical – virtual conflicts  Will location based advertising work?  IMAGINE THIS: You have placed an auction bid on a favorite item a few days back. While you are attending this presentation, a message props up on your mobile/laptop screen prompting you to close the bid immediately before it expires. Will you close the bid? INDIVIDUAL DIFFERENCES: CONSUMER UBIQUITY Time Place People Consumer Ubiquity Control WORLDWIDE RESPONSE TO TEXT BASED ADVERTISING 80 70 60 50 40 Percent Receiving Text Ads Percent Responding to SMS ads 30 20 10 0 France Germany Italy Spain United Kingdom United States TYPES OF MOBILE MESSAGE ADVERTISING Location Independent Strategy (LIS) Location Based Strategy (LBS) RESEARCH QUESTION With enhanced technological capabilities, location has become a part of the new media vehicle (the mobile phone).  Broadly: How does location-individual congruence of the advertisement affect consumer responses? Specifically: do perceptions of usefulness conflict with feelings of intrusiveness? Moderators: Location type (public/private) and task type (work/leisure)   DESIGN IV:  2 (LBS/LIS)  X 2(Private/Public)  X 2(Work/Leisure) DV: Usefulness, Intrusiveness, Willingness to respond to the offer Data Collection 326 subjects from a north eastern university PRETEST (N = 75) Product Category : Music CDs  Work Situations: Meeting at Office, Working at Library  Leisure Situations: Watching TV at home, shopping at mall, chatting at friends place, waiting at bus station  Public places: Library, bus station, mall  Private places: Office, home, friends place  EXPERIMENT STIMULI : STRATEGY LIS You are at HOME WATCHING TV, when your cell phone screen lights up with a message. When you open it, you find a free advertisement informing you about a running promotion for MUSIC ALBUMS by one of your FAVORITE MUSIC GROUPS at a KNOWN STORE. Please describe your thoughts and feelings in the questions asked below. LBS You are at HOME WATCHING TV, when your cell phone screen lights up with a message. When you open it, you find a free advertisement informing you about a running promotion for MUSIC ALBUMS by one of your FAVORITE MUSIC GROUPS at a KNOWN STORE NEAR YOU (< 0.1 mile away). GIVEN THAT YOUR PHONE WAS TRACED BY LOCATION SENSORS, please describe your thoughts and feelings in the questions asked below. EXPERIMENTAL STIMULI: LOCATION AND TASK Private Public Work Leisure MAIN EFFECTS OF LOCATION AND TASK ON USEFULNESS Usefulness 11 10.5 10 9.5 9 8.5 8 Private 9.0353 10.5935 Usefulness Public Usefulness 12 10 8 6 4 2 0 Work 8.6038 10.347 Usefulness Leisure INTERACTION EFFECT OF LOCATION AND TASK ON PERCEIVED USEFULNESS Incongruent Congruent Private (M) Public (M) t -statistic p (Sig) 8.95 8.34 0.806 0.422 9.06 12.05 -4.74 0.000 INTERACTION EFFECT OF LOCATION AND STRATEGY ON PURCHASE INTENTIONS Private (M) Public (M) t -statistic Sig (p) LIS 4.64 4.46 0.418 0.677 LBS 4.28 5.41 -2.3 0.022 DOES THE LOCATION X STRATEGY EFFECT VARY ACROSS WORK/LEISURE SITUATIONS? Work Situations Leisure Situations CONTEXT EFFECTS WERE TESTED ON EVALUATIONS OF 4 ENTITIES Store  Product brand  Service provider  Advertiser  CONTEXT EFFECTS ON STORE EVALUATIONS Store Evaluations 3.6 3.5 3.4 3.3 3.2 3.1 3 2.9 Work Leisure 3.15 Store Evaluations 3.48 STUDY IMPLICATIONS Usefulness can be monitored, but not intrusiveness (something to gain, nothing to lose)  Advertise LBS when in public locations, irrespective of work or leisure.  Optimize Promotion of Store Brands rather than products/service providers  IMPLICATIONS FOR CTR AND CPC? IMPLICATIONS FOR REVENUE SHARING How will the Ad revenue split between  Advertisers  Mobile Service Providers  Store Brands  Product Brands PARADIGM SHIFT IN MARKET RESEARCH: CLICKSTREAM FINDING USERS TO YIELD TARGETED INFORMATION ABOUT YOUR PRODUCTS User Sample PCs/ Mobile Phones 1. Potential respondents sent email invitation to participate. Respondents respond to demographic survey, sign online privacy statement, install ClickStream program, and receive incentive. ClickStream Web Server Cluster 2. ClickSight silently monitors feature usage In all applications and uploads click and machine data when machine not in use. ClickStream Analysis Servers 3. Data re-tabulated into multi-tier reporting cluster every night and presented through portal PARADIGM SHIFT IN USAGE SEGMENTATION: GYPSII EVOLUTION OF INTERACTION SEGMENTATION Traditional Individual- Based Segmentation Men Drink Coffee, Women drink Tea  Situation Based Segmentation At workplaces people drink coffee, at home they drink tea  Individual-situation interaction segmentation Men drink tea at both home and office And women drink tea at home, coffee at work.  THANK YOU!