What If the ‘Year of Mobile Advertising’ Never Comes?

It is a new year… the time when we are told this is “The year of mobile advertising.” However, despite Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) collectively doling out more than 1 billion dollars for mobile ad networks, the $650 million spent in the US on mobile advertising in 2010 is still a mere 2.5% of online ad budgets. The appropriate question should be what if “The Year of Mobile Advertising” never actually comes?

It is time to acknowledge that direct response on mobile is a failure. However, mobile’s singular advantage compared to other platforms can be distilled into a single word- engagement. In the UK for example, Facebook users spend one third longer per visit on the mobile version. Mobile’s potential as a marketing platform, more than any other factor, has helped make it the fastest growing advertising medium in history.

It may be helpful to review successful campaigns from one market where the percentage of advertising budget has surpassed five percent- Israel. Unlike the US, all of the major carriers offer the iPhone. In fact, ARPU (average revenue per user) exceeds the US and Western Europe. Below are a few recent campaigns with relevant lessons for the US.

Lesson I: Customer Relationship Management, not Direct Sales- Microsoft Recruiting

Microsoft (NASDAQ:MSFT) used a dynamic billboard as a fun tool for recruiting computer programmers. Located on the highway between the Haifa – Herzilya tech corridor, a series of complicated math equations were displayed. Responding via SMS, the campaign netted 60% more applicants than usual.

Lesson II: Bring the Customer Back, Again and Again- Gilette Racing Game

Gillette, the razor brand from Procter & Gamble (NYSE:PG), created a branded mobile racing game with world-class gameplay. To encourage consumer discovery, Gilette promoted the game online, at the point of sale and on mobile. More importantly, once the game achieved a sizable user base, Gilette learned from the success of iPad app Angry Birds by consistently updating the game every few weeks.

Lesson III: Mobile as Part of a Consistent Marketing Experience and Message- Doritos Raffle

Doritos (NYSE:PEP) customers expect a consistent experience and message regardless of entry point. The brand combined two original, made-for-digital video series with an instant raffle related to a mobile code on 25 million bags. Integrated with online and in-store efforts, mobile permitted a consistent, cross platform experience for more than300,000 paid customers. The result was 21,000 Facebook Fan Page “Likes” and a substantial increase in sales.

Lesson IV: Mobile as Consultative Service Tool– Ben Leumi Bank (Talk to an Advisor)

Mobile is more than just a commerce opportunity. It is a chance to learn more about customers and better serve them. In this Click 2 Call campaign, Ben Leumi Bank tested frequently, adjusted rapidly and scaled appropriately. Wisely, their campaign evolved from a lead-gen approach to a consultative, CRM focus. The high response rates among women ages 25-45, permitted the bank to learn more about their target customers and individualize the marketing message.

Lesson V: Leverage the Lower-Cost and Social Nature of Mobile– Tuborg (Live Concerts)

Tuborg has long used music to engage its target, young male demographic. The beer company held a ticketless music concert in which customers purchasing a 6 pack received a mobile concert ticket via MMS. The mobile tickets helped spur product sales while drastically reducing event production costs. Another concert, available exclusively for those who had joined the Tuborg Fan Page on Facebook, used a similar mobile ticketing approach.

The US is nowhere close to crossing the 5% ad budget threshold. In the interim, it may be worthwhile to bench-mark best practices from countries like Israel that have already surpassed that figure. Consider activities like investing across platforms, using mobile as a consultative CRM tool, establishing your own campaign metrics, testing frequently and adjusting rapidly and thinking through the post-click experience. In the meantime, enjoy yet another “Year of Mobile Advertising.”

Levi Shapiro is a Partner at TMT Strategic Advisors, a global research and strategy firm focusing on the technology, media and telecom sectors.

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