Cash is king as mobile grows up

David Fieldhouse, strategy director, Linking Mobile, says something important is happening to mobile right now, which will change everything for brands and the way they approach mobile advertising. It’s called m: commerce…

Much has been written about mobile advertising over the past ten years – you may have noticed the endless hype and expectation. These unfair expectations are nonsense as nearly all media channels take their time to evolve and develop. Desktop internet advertising took ten years to mature, which people often forget. It was the arrival of e: commerce that changed everything for digital desktop and mobile is no different.

The first mobile revolution – Hardware

Up until 2007 mobile advertising mostly concerned itself with SMS text and wins and basic WAP sites. Creative opportunities were limited and combined with few standards, slow connections and a confused public (based around browsing costs) the medium did not inspire marketers to get involved. I was busy working in mobile then and you really needed to be more of an IT expert than a marketeer to get any decent campaigns away.

This all changed in 2007 with the introduction of the iPhone. Suddenly the possibilities of mobile became clear with big colour screens, apps, location, fast browsing, data packages and all the other functions consumers love. Since then Google Android has blasted on to the mobile scene and with Mokia arriving this year (Nokia and Microsoft) things on the hardware front are very interesting indeed.

Mobile ad-spend in the UK was worth £83 million (IAB/PWC) in 2010, which was up a stellar 115% on the year before but as an overall number it’s still pretty low. Hardware itself is only part of the story – something else has to happen to see clients commit significant budget to mobile and it’s happening right now.

The second mobile revolution – M: Commerce

The simple truth is that when clients begin to sell product and generate income via the mobile channel the anticipated billions of dollars of advertising money will follow suit. Yes brands follow eyeballs (and there are plenty of those on mobile now) but clients also need to convert those eyeballs to sales and leads. We see thousands of sales and leads via Linking Mobile every month so we know there is consumer appetite for this on mobile.

Mobile content businesses have also been selling products for years – they spend millions on mobile advertising because crucially they know that they get more money back in sales. Marketing Directors (and crucially now Finance Directors) of high street retailers are now sitting up and taking notice as increasing sales come through mobile devices. As has always been the case ‘cash is king’ and any medium that delivers sales for clients will benefit from increased media investment. The growth of online is a lesson in this.

The move from e: commerce to m: commerce is happening rapidly. Domino’s recently announced £10 million worth of sales via its app and mobile site since launch. M&S have also delivered over £1 million in sales via its mobile site and during Christmas 2010 and Tesco announced 1 in 10 of all sales came via a mobile device. This all bodes well for mobile display advertising and search, which will undoubtedly mushroom… m: commerce can and will be so much more however.

Smart companies such as Eagle Eye are integrating their technology into high street retailers chip and pin machines. Consumers merely download a code or voucher and redeem in-store. Retailers such as Subway and Tesco also now have the capability to scan barcodes on mobile phones, thus making mobile vouchers easy to use for consumers and accountable for brands. Marketers finally have an engagement, distribution and redemption device they can work with.

The recent announcement that Orange and Barclaycard are launching mobile payments (your mobile as a cash card) means large global organisations are combining now to make m: commerce and mobile payments a reality. It is the combined marketing and infrastructure muscle these types of companies bring that will drive consumer change and deliver revenue for brands.

Smart brands are optimising their retail experience for mobile now (41% according to IAB research) and are reaping the benefits. In turn they need to advertise via mobile, which creates a virtuous circle. It is this development that will, as Apple says, “Change Everything”.

Click here to find out more about Linking Mobile: www.linkingmobile.com