Measuring The Opportunities
Nielsen's Nic Covey will be kicking off today's show with some recent and fascinating research into mobile habits and ad responsiveness. While I will be curious to see how Nic interprets some of these points today, let me share a few sneak peeks at his deck that intrigue me already.
In sizing the mobile market, Nic's stats follow some familiar patterns. Overall, in Q2 2008, Nielsen sees 161 million U.S. mobile users accessing data of some sort, 137 million of them going to text. Nor is it surprising that we now have 43 million mobile Internet users. The growth curve since last August is slow and steady, adding around a million new users each month and without any current signs of leveling. As Nic will point out today, when it comes to scale, mobile Web and SMS represent two of the most important platforms for marketers. But I was also struck by the untapped potential of MMS. Nielsen is showing 67.8 million people passing images to one another. This means there is a critical mass of users already acquainted with multimedia messaging, who probably are ready to receive entertaining image and video assets from favorite brands. But they aren't.
Mobile Video and TV also come in with a surprisingly large addressable base of 28 million. Keeping in mind the radical fragmentation of that number across carriers, video types and then channels, it still adds up to a number worth aggregating.
When you break down the mobile Web audience by category, some interesting vertical possibilities emerge. First, the mobile portals, which encompass the carrier deck as well as the landing pages for the mobilized Web brands (Google, AOL, Yahoo, MSN, etc.) had an audience size of 38.6 million in August. Even if you carve that traffic among four or five Tier One carriers and Web brands, that is an enormous audience a marketer could hit with a timely brand campaign, a tune-in or movie premiere promotion. Another open opportunity is Web-based email, like the very popular Yahoo Mail and AOL email access points. This category alone is hitting 27.4 million users, Nielsen finds. It is only after portals and email that we find the usual suspects: weather (18.4 million), news (14.9 million), search (14.2 million) and entertainment information (12.7 million). Most importantly, the mobile Web has a fairly thick long tail that renders sizable audiences going to sports (10.6 million), business and finance (5.0 million) and even 2.1 million to education and employment topics. There are sizable, addressable audiences to be had, although aggregating them efficiently may be another matter.
While growth and scale in mobile media usage bode well for marketers, there is still remarkable stagnation in user responsiveness to mobile ads. The percentage of data users who have been exposed to mobile advertising grew from 17.9% in Q2 2007 to 29.6% in Q2 2008. Mobile ads now reach about 76.8 million subscribers. And yet, the rate of response is flat. Last year in Q2, 12% of those who viewed an ad responded and 11% saw ads without responding. In Q2 2008, 13% responded and 16% did not. What gives? Sure, users are not being overwhelmed with ads. If anything, the increased speed of the networks and arguably better creative should make users more willing to click or respond to a mobile ad in some way. Nielsen notes that less than two-thirds of major mobile Web site home pages are serving ads, and half of the promotions are house ads. Perhaps that is part of the ad response stagnation. Not enough interesting creative or relevant offers really are getting through to enough people on the platform to move the needle.
Early day, early days. Yadda, yadda. The infancy of the mobile platform notwithstanding, part of the problem here is that mobile still suffers from respect lag. The excuses used just a year ago for not investing in this platform (scale, measurability, scale, complexity, scale) are simply not as justifiable now. The audience is there, and it is aggregating around enough core categories to make it reachable in targeted ways with scale.
But making that case is more than just a matter of arguing the points through metrics. As I hope we see throughout today, marketers are building the case for mobile in much the same way marketers built their case for the Web: through case studies, success stories, proof of ROI.
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