One of the memes to emerge from Mary Meeker's influential Internet trends report this spring was that we spend about 10% of our time with mobile, but the medium only commands 1% of U.S. ad dollars. It's since become a rallying cry, in effect, for proponents of higher ad spending in mobile.
In response, the Mobile Marketing Association has come up with a 7% solution.
Specifically, the trade group today issued a report recommending that mobile should be 7%, on average, of current ad budgets. Furthermore, the analysis projects that mobile's share of the media mix is calculated to increase at least 10%, based on growing adoption of smartphones alone.
The study, titled “MXS: Mobile's X% Solution,” and conducted by marketing ROI specialist firm Marketing Evolution, aims to go beyond the simple equation that budget allocations should have equal share of time spent. It looks at mobile ad results based on actual market costs and mobile effectiveness, as well as factors like U.S. smartphone penetration and reach and frequency in mobile.
That information is then merged with data from dozens of cross-media studies of other media against specifically defined campaign goals by product category, allowing “for an algebraic analysis of mobile’s role in an overall marketing mix,” according to the MMA.
While 7% is the overall recommended average for mobile, the report indicates that the optimum share varies according to industry category, marketing goals and size of budget.
For “higher involvement brands” in categories such as auto and finance, for example, the proportion should skew a bit higher: 9%. Conversely, in “low involvement” categories like CPG and entertainment, the share would dip to 5%.
Campaigns aimed at building awareness would also have a smaller allocation for mobile (5%), while those geared toward boosting purchase intent and consideration would increase the share to 8%.
Based on its analysis, Marketing Evolution estimates that mobile advertising (display, video, audio) should be at least an $11 billion market in the U.S., about the same as the amount spent on online display and sponsorships in 2011. The Interactive Advertising Bureau estimates that mobile advertising last year reached $1.6 billion in the U.S. and $5.6 billion globally.
MMA Global CEO Greg Stuart said in a statement that the MXS study “offers a baseline for further discussions on what a rebalanced marketing mix should look like to achieve a stronger ROI on every dollar they spend."