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Advertising: The Next Mobile Disruption

Filed in Mobile Engagement, Mobile Marketing by on January 7, 2014 0 Comments

A confluence of technology and behaviors are creating a tipping point in mobile advertising. Higher data speeds powered by LTE and Wi-Fi offload combined with intelligent devices like  smartphones, tablets, and smart TVs that deliver interactivity and online-first content are leading a breakout period for mobile advertising.

Since the 1970s, the primary revenue and profit driver for advertisers has been the commission made on buying and placing television ads. And the rise of the Internet, digital media and mobile has shifted the advertising spending on the legacy business model. TV has simply been an efficient and easy-to-navigate solution to generate maximum impressions – schedule a buy and you’re done. Platform, distribution experience and difficulty in managing impact are substantial barriers for advertisers.

But the old model is under siege. Consider a few events from 2013:

  • The ABC TV network announced that cable subscribers in Philadelphia and New York would be able to live-stream all of ABC’s programming to their iPads and iPhones, with subscribers in six other cities gaining access later.
  • TechCrunch published a report: “Nielsen today released new data that examines trends in the ‘Zero TV household’ – a definition which refers to those who no longer watch traditional television offered by cable or satellite providers, but who tend to stream video online, via computers, smartphones or tablets. According to the firm’s findings, there are now more than 5 million cord cutters in the U.S. this year, up from 3 million in 2007.” Half of those viewers are under the age of 35.
  • “Flat is the new up,” an NBC network executive declared, referring to how NBC’s U.S. broadcast TV network has held steady on viewers in the 18-49 demographic this year, while other U.S. networks have charted a reduction in viewers.

In the U.S. and many developed markets, consumers are shifting their viewing habits away from mass-market broadcast video content, opting for narrower and more varied offerings from cable networks and streaming publishers like Netflix, Amazon and Google. Smart devices are slowly replacing the traditional cable/broadcast TV as the primary entertainment screen, and higher bandwidth through wide area networks and Wi-Fi is making the user experience much deeper and available everywhere at any time.

These changes are important enablers of the next wave in user interaction and targeting, but the real shift in advertising will come from the advertisers that now have the mechanism they have craved – interactive television ads on mobile. Smart devices, bandwidth and behavior changes mean video ads can finally deliver an acceptable user experience to a meaningful market. This means ad executives can enhance and measure the trusted but now evolved commercial. The new content-paying ads will expand reach through delivery across multiple screens, and they can be personally targeted by leveraging network contextual attributes, resulting in rich, deep user engagement across networks, geographies and time zones.

With consumers reaching the limits of tiered mobile data plans, measurable mobile advertising will pave the way for sponsored data along with increased demands for Wi-Fi and connected TVs. Consumer adoption of mobile video streaming should grow over the next year — first in the U.S., then Korea and Japan, and then in some Western European countries.

Ultimately, device technology, bandwidth, content and behavior are setting the stage for another mobile disruption with advertising. Ads will become more relevant and be delivered in-context, thereby deepening user engagement across networks, time zones and devices. As a result of these changes, new business models will develop around content, advertising and metered network usage.

For marketers, as the mobile landscape evolves and consumers’ expectations climb, strategic execution of mobile advertising is essential. Do you agree? How do you see the media ecosystem evolving?

I would appreciate your thoughts.

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About the Author ()

Rob Hammond is a former Senior Director of Mobile Engagement at Syniverse.

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