In its latest digital outlook report, Razorfish acknowledges mobile has long hyped as the next big thing only to fall short of expectations year after year. Underscoring that point, the subhead for the section on mobile is "I thought 2009 was going to be the year of mobile!" So is the agency backing off making any more bold predictions about mobile advertising that inevitably turn out to be overblown?
Not exactly. It is an outlook report, after all. What Razorfish is proclaiming in this year's edition is that "2010 will likely turn out to be the year of testing before mobile really takes off in 2011." So that sounds like next year will finally, actually be the year of mobile. This time they really, really mean it.
Or not. Razorfish highlights some of the familiar factors holding back mobile ad spending to date including the difficulty of measuring results of mobile campaigns, online ad formats not translating well to mobile and the fact that a lot of mobile marketing isn't paid media.
"Some of the most effective marketing on mobile phones is found in texting programs, which are still the largest opportunity, and in apps," states the report. "In general, these require time in terms of labor and development; as with social, this investment doesn't go toward media buys."
But the agency points out that "change is in the air" with Google and Apple pushing more aggressively into the space through their respective acquisitions of AdMob and Quattro Wireless, and Apple's subsequent unveiling of the iAd platform. There's no question that when companies the stature of Google and Apple focus on a particular segment it's a big deal. If nothing else they bring a lot more attention to it from marketers and media companies because of their involvement.
But there's no guarantee Apple, which is making its first foray into the ad business, will transform mobile advertising in the next year, or that Google's purchase of AdMob will dramatically boost mobile ad spending in 2011. Few would have guessed the deal would take six months to be approved by federal regulators in the first place.
And if the government expands its reported antitrust inquiry into Apple's new developer agreement banning the use of non-approved tools like Flash in applications, it could end up hampering its iAd initiative, which is geared to in-app ads. The reported demands of $1 million or $10 million annual commitments from advertisers for iAd could also soften after the platform's initial launch period this summer.
So predicting mobile advertising will "take off" next year when the landscape is still likely to remain unsettled still sounds like hype. Surveys have shown that agencies and brands plan to increase budget allotted to mobile this year. But the proportion of advertisers using mobile at all is still fairly small.
A recent Omniture study of 600 marketers found only 22.7% of marketers tapping into the category. Asked about that figure, Cory Treffiletti, president and managing partner at catalyst s+f, said it actually sound high. "I know lots of marketers that aren't doing much in mobile right now," he said. Until more brands are convinced they need to be active in the segment, predictions about a breakout year for mobile will ring hollow.