Whether it’s a text message from Express for a “20% off a $50+ purchase” deal or the instant video for Age of War at the end of a Ruzzle game, lately it seems that nearly every experience on our phones involves some sort of brand communication.
Now that marketers have determined mobile is an effective method of reaching target audiences, more and more brands are beginning to shift dollars toward mobile. In fact, mobile budgets have increased more than 735% between 2011 and 2014, according to eMarketer (PDF), and spending is expected to continue to grow at more accelerated rates in the future.
With the allocation of additional funds for mobile efforts, what is the best method for marketers to use in order to reach audiences via mobile — ads or messaging?
In this column, I’ll examine the ecosystem of mobile marketing and advertising — comprising display ads and direct mobile messaging aimed at reaching target audiences within an integrated campaign.
Your Mobile Ad Investment
Why are marketers investing in mobile ads? Simply put, they offer a broad reach among target audiences.
As we all know, mobile ads are segmented into two locations within a Smartphone: mobile web and apps.
Even though eMarketer estimates mobile ad spending will increase to more than $13 billion this year — more than spending for outdoor and directories, and approaching spending on radio and newspapers — there are still a few challenges marketers face when it comes to actually defining the success of mobile advertising.
At the start of mobile advertising, advertisers believed they could translate their methods of reaching users on desktop and apply it to mobile. While this approach makes sense, mobile is a little bit trickier when it comes to effectively communicating to users.
Desktop display advertising and retargeting has become a science, where pixels (aka cookies) can be used to serve relevant content to target customers to encourage them to reengage with the brand.
On average, the CPM (cost per thousand impressions) for desktop advertising is around $2.80, while mobile rates range from just $0.20 to $2.00 for standard banners, the second-lowest cost among all advertising touchpoints according to Monetizepros.com, 2014.
These numbers suggest mobile advertising still has a way to go before it’s completely perfected.
The Tracking/Targeting Challenge
The primary challenge with mobile advertising is the fact that advertisers cannot build a unified profile to identify users seamlessly between the mobile web and an app, not to mention between mobile and desktop screens.
Unless there is some sort of profile/login feature, brands are typically unaware if a customer uses their app and then browses the mobile web. This eliminates the opportunity for these brands to deliver a congruent brand experience as customers navigate between any of their mobile platforms — browsers, apps and messaging.
The unfortunate truth is that with mobile, the concept of a cookie — which has worked so well for desktop — is not consistent, as the space is fragmented across platforms. This makes mobile retargeting very difficult and reduces the effectiveness of mobile ads.
Even though mobile ads currently have the lowest CPM across all advertising channels, the cost is likely to increase year-over-year. This means every year marketers will have to spend more to stay in touch with their customers and, in fact, advertising only allows marketers to “rent” consumer attention via the media property or app that the consumer is visiting.
As marketers, we need to get smarter about our investments and keeping in touch with our target customers – we need to build and own a Mobile Data Asset.
Building A Mobile Data Asset
In order to build a mobile data asset, we need to figure out a way to identify our users via mobile so that we can bridge the gap between mobile platforms within a device.
While the traditional methods of identifying a device included using cookies, MAC Address, app identifiers, etc., these often limit a brand’s ability to recognize users.
Meanwhile, Apple’s IDFA identifier, as well as the Android Advertising ID, can easily be reset or changed entirely, similarly to the way browser users erase cookies.
With iPhone MAC addresses specifically, brands will have an even harder time attempting to find customers with the release of iOS 8. Due to privacy concerns, Apple is making a change to better protect users by eliminating easy access to a device’s MAC address.
All that being said, the one identifier that does not change on any mobile device is the mobile number. This is an international standard. The mobile number can be used online and offline, giving marketers the opportunity to take retargeting much further.
How can we collect and use a mobile number? Your call-to-action needs to include the user providing you with their mobile number.
A successful program will rely on a strong call-to-action where the customer will take the next step and provide you with their mobile number. Many brands have already started to harvest these numbers including Starbucks, Express clothing, H&M and IKEA.
Once the brand has collected these numbers, it can work with mobile networks to retarget these specific users or take the experience offline by using mobile messaging tactics to reengage the customer.
The unique opportunity with messaging lies in the fact that it is a two-way communication model. Data about the customer can be built and fortified over time — resulting in reliably predictive analytics about behavior and how we can entice the customer to the next step in the purchase path.
Using Messaging To Reengage The User
Text and MMS messaging are very powerful tools, and our own data shows very positive results: open rates close to 99%, response rates for image-based messaging programs averaging 35% and opt-out rates coming in at less than 1%.
With those levels of engagement, brands can be confident in sending compelling imagery via mobile messaging to gain consumers’ attention.
Using technologies like Rich Media Messaging (RMM), brands have the ability to send any rich content, such as device-optimized images, video and long text to virtually any mobile phone regardless of its data plan.
This capability allows brands to retarget and continue the conversation offline after acquisition at a much more affordable cost with higher response rates.
These techniques can also be used to guide customers to other mobile touch points to truly create a fluid conversation for the customer, thus further enriching the brand experience.
The Bottom Line
With investments in mobile ads on the rise, it is becoming more and more important for brands to take a look at how they are optimizing their investments. The mobile phone number is the one true way to capture leads via mobile and to retarget content both online and offline.
As brands get savvier, we will see a trend towards blended offline and online experiences where retargeting will not only consist of smart investments online, but also timely offline experiences using mobile messaging.
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