Article

Craig Palli
Craig Palli 6 October 2014
Categories Advertising, Mobile

The Future of Mobile: 2015

As 2014 comes to a close, Fiksu looks at at the future of mobile and what marketers can expect for 2015.

Mobile is already seeing the evolution: for many brands it’s become another channel in the primary mix, along with TV and web. Fiksu CSO, Craig Palli, shares a Q&A on what we can expect for 2015.

Is mobile the future of advertising? 

Mobile is absolutely the future of advertising. We’re already seeing the evolution: for many brands, mobile is no longer an afterthought or a test -- it’s becoming just another channel in the primary mix, along with TV, web, and other media. As the amount of time spent on mobile continues to increase, the dollars will follow: it’s inevitable. And it’s not just mobile as a branding channel -- brands are also beginning to realize the power of apps for creating engagement with their customer base. As mobile devices become the primary form of digital interaction, and apps overwhelmingly dominate the time spent on those devices, it’s essential for brands to use mobile to build strong connections with their customers. 

 

Will mobile eventually be the predominant screen?

In some ways it already is. A recent report from Millward Brown indicated that US consumers already spend more time on mobile than on TV, 194 minutes to 147. It’s also stickier, more personal, and more engaging than most TV viewing. While TV will continue to dominate live or mass-audience events, mobile is soon going to dominate most other types of media consumption. As mobile devices outship PCs by orders of magnitude (~3B to 200M in 2014) this dominance is only going to continue. And as the steady upward trend in Fiksu’s Cost Per Loyal User index over the last two years shows, advertisers are accelerating their investments as competition increases.

 

Will mobile eventually be the biggest advertising channel?  

In countries with heavy mobile penetration, we expect mobile to command the majority of digital advertising spend within a few years and, in fact, to surpass TV in five to ten years. (We’re not going out on a limb, here. eMarketer expects that by 2018, mobile will take in 70.9% of digital ad dollars and 26.4% of spending on US total media.) The combination of the sheer amount of consumer time spent there plus the unmatched ability to deliver customized, relevant messaging to exactly the right users will prove irresistible to major advertisers: TV simply can’t offer the granular targeting that mobile does -- down to the level of geography, past behaviors, and consumer-indicated preferences. This advertising potential is why big names like Facebook, Twitter, Google, and Yahoo are concentrating so heavily on introducing and expanding mobile-specific ad products.

 

 

Is it important for mobile advertising to advance quickly as more and more Gen Y and Xers unplug their TVs for digital solutions and as Baby Boomers get older?

It’s important for mobile advertising to advance quickly - period. As KPCB analyst Mary Meeker highlights every year in her widely-cited presentation, there’s already a huge gap between consumer time and advertising dollars spent in mobile, with 20% of media time spent in mobile compared to only 4% of ad dollars. It’s true that the aging of Baby Boomers and the increase in cord-cutting both contribute to that disparity: those factors among others are why that difference continues to widen even as mobile advertising spend is growing at an expected 83% this year. In addition, though, video ads on mobile are already extremely high performing. The shift of video consumption to mobile among Gen Y and X will simply mean a change in amount of video advertising on mobile - not a revolution in advertising technologies.

 

What may be mobile advertising’s downfall?

We don’t see any downfalls in sight -- only potential slowdowns. For one thing, the current patchwork of advertising management, tracking, buying, optimizing, and analysis tools can not adequately support a mobile ad sector that rivals digital or TV. With increased brand spending will come demands from advertisers for integrated, end-to-end solutions that make large-scale buying easy and provide detailed performance metrics. In addition, the agencies who control the bulk of large brand spending will want to make their advertising purchases in familiar ways, and that means buying audiences -- not networks, publishers, or clicks. Mobile targeting is quickly evolving to use the richness of mobile data to define audiences that can appeal to any brand buyer. 

 

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