Commentary

2015: The Year Brands Take Mobile Advertising Seriously

Whether working or playing, Americans currently spend 65%  more time in apps than we did two years ago. This shift hasn’t gone unnoticed by advertisers. In 2014, savvy brands realized that mobile was an integrated part of all marketing efforts.

Here are five ways the industry will shift as mobile apps dominate the market.

1. Brands will move traditional ad spend to mobile.

For years, video was primarily consumed in front of the TV, and then online channels like YouTube. As this transition occurred, brands gradually increased their video ad spend online, investing in linear and in-stream ad formats.

With the rise of smartphones and tablets, video reaches every corner of our lives—nearly 40% of YouTube’s global watch time comes from mobile.  This is causing a parallel shift in advertiser dollars from TV and desktop. (In 2014, 34% of advertisers indicated they planned to move money from TV ads to mobile.)

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In 2015, we’ll see this transition kick into full swing, with much of the spend flowing programmatically through DSPs and other exchanges. While brand ads will become an essential part of the mobile ecosystem, they aren’t likely to displace the app install ads prominent in mobile video advertising.

2. Industry players will join forces to provide more sophisticated measurement.

They will need metrics beyond CPMs and CTRs. They will want to know if the user actually purchased after clicking or watching the ad. This is where mobile thrives, as it offers rich functionality beyond clicks and views. Users can tweet, share, like and engage in the advertising experience in new ways.

But in order for mobile brand advertising to prove its worth, tech partners, ad platforms and data companies will need to work together to alleviate the concerns associated with the medium. ComScore and Nielsen have released successful products to start down the path of Audience Validation.

Better data-sharing and attribution tracking across mobile devices will also be critical to justify mobile spend.

3. Gaming advertisers will chase growth through emerging markets.

A lack of competition and an abundance of high-quality players will tempt more gaming advertisers to promote apps in emerging markets this year. China, India, and Latin American are all seeing an explosion of mobile users. There are now nearly 550 million smartphone or tablet users in China – nearly all of them have mobile apps installed.

A successful strategy must be built on a clear understanding of the market, how they play games, how they interact with apps, and how they purchase. Successful advertisers will partner with ad platforms that have a grasp of local market dynamics and offer sophisticated targeting options so they can test the waters without burning through their budget.

4. Deep-linking will tie app experiences together in a profound way.

Single-purpose apps were a prevailing theme of 2014. We saw companies like Facebook unbundling their functionality and building standalones. While this trend may continue, there will always be room for Swiss-army knife apps, like WeChat, that have robust features and functionality. The average number of apps each consumer uses flatlined this year, suggesting that consumers do not always want more, and that there is an “upper limit” to how many apps people will install and use.

Deep-linking will rise to the forefront in 2015, transcending these two worlds of single-use and swiss-army knife apps to integrate experiences in a meaningful way. This will create tremendous benefits for advertising by revolutionizing the app install landscape and offering new ways to re-engage users through advertising that sends them to specific, targeted points within other apps. Re-engagement ads will allow brands to enter the market intelligently and profitably, going beyond the CPI model used by many gaming advertisers.

5. Acquisitions will slow. Public markets will favor programmatic.

Adtech in 2014 was a wild ride of non-stop acquisitions. This year, I expect to see a significant slowdown in M&As while the industry swallows its current acquisitions. Mobile-first companies that have built defensible technologies will likely be gearing up for an IPO beyond 2015, and may consider turning to private markets for huge rounds of additional funding, akin to past rounds for InMobi ($200M), AppNexus ($75M) and Turn ($80M).

As more advertisers embrace programmatic buying, public markets will start to favor companies in the programmatic space. To succeed here, public companies may need to change their focus, demonstrating significant revenue contributions from programmatic, video or mobile.

1 comment about "2015: The Year Brands Take Mobile Advertising Seriously ".
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  1. Mike Greco from Indy App Systems, December 26, 2014 at 3:25 p.m.

    Was it not taken seriously in 2014? Look at the results advertisers saw on Facebook and Twitter. Look at how Airpush helped developers make record $$ monetizing their apps. 2014 was a huge year for mobile advertising. Maybe folks will take in "more seriously" in 2015, but they are definitely already taking it seriously.

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