PwC Study Outlines Steps for Success with Mobile Advertising

By Peter Bernstein February 26, 2014

Here at the Mobile World Congress in Barcelona, the halls are packed with people kicking the tires of all sorts of new technologies—from next-generation wearable devices to better security solutions for protecting data at rest and on the move, to ways to help operators better deploy and manage small cells and the high expense area of backhauling wireless traffic.

And, while all of this is fascinating, a newly released report from PwC, “Mobile advertising strategies for increased success,” looks at consumer attitudes toward mobile advertising and sheds important light not on what’s next in all things related to wireless technology, but rather on the business opportunity of leveraging the fact that we are all becoming mobility-centric and that clearly advertising is going to be a revenue generation of substantial proportion. However, service providers of all types, traditional and OTTs, had better understand not just the demographics but the psychographics of a very differentiated set of users as well, if they are going to successfully tap into the pot of gold at the end of the rainbow.      

What PwC found is that the potential for mobile advertising will shadow the boom in mobile devices used for Internet access.

In fact, as the graphic from the report shows, PwC projects a 27 percent compound annual growth rate increase in global mobile advertising spending from $15 billion in 2014 to $27 billion in 2017. This is in contrast to overall advertising industry growth (digital and non-digital) of 4.8 percent over the same time period.  Reality is that because of mobile technology, sales and marketing executives now have a conduit into consumers’ virtual calendars and physical locations, amongst other data, to target them when they are most likely to consider buying decisions.

It is all about deeper knowledge on a variety of fronts of customer behaviors when they are online on their smartphones and tablets and being smart about obtaining permission at the right time under the right circumstances to encourage consideration that leads to transactions. It is not about putting up banner ads and hoping we will click.

Challenges remain in getting our engagement

PwC also found that advertisers and publishers are going to face significant challenges in both technology and user experience before they can maximize the mobile advertising return on investment. Key challenges include:

  • Consumer sensitivity around privacy. Less than 50 percent of those willing to share information were inclined to provide an email address, among other items. The highly personal nature of mobile devices tends to heighten consumer sensitivity about privacy and consumer feel intruded upon when they receive pseudo-person, and sometimes inaccurate, mobile promotions.
  • Limited screen real estate and usability. Common frustrations include ads that take over the screen with no clear method of minimizing or deleting them or those where it’s too easy to accidentally click.
  • Platform and ecosystem obstacles. There are multiple technology and buying platforms within the mobile ad space, across mobile and other digital ad types – one of the many examples across the changing tech landscape that shows a clear need to manage cost and complexity.

In fact, they have an interesting chart on people’s expressed willingness to share the information advertisers so desperately want in order to better target prospects. 

The report also found some interesting generational differences regarding sharing and, as the chart shows, the priorities people put on what they are willing to part with. For example, they are most comfortable being targeted based on their interests, followed by their location and online purchase history. There are also regional cultural differences to take into account.

Taking all of this into account, PwC is recommending a few key tactics to move forward in the short-term include:

  • Develop a mobile-first strategy, one that accommodates device size and screen real estate. Publishers, content providers and technology providers should seek to integrate mobile and non-mobile product offerings and develop contact with a mobile-first frame of mind, providing a common foundation for comparing the impact of a single message.
  • Understand the changing behaviors and context with mobile devices. The use of mobile devices across multiple experiences should not be ignored, and thus the role of data and advanced analytics to develop a holistic perspective how and when to engage consumers is critical.
  • Offer consumers value for sharing their data and creating the opportunity for better targeting. Publishers should demonstrate that they value consumers’ rights to privacy while still motivating them to share data. They should be clear about how the information will be protected and the value of using information to provide targeted content.

The first two suggestions are common sense. However, the last one may be the key to the kingdom.

As the headlines scream almost daily, there is growing distrust of “E”veryone’s access to and use of personal data. The study seems to show that we are increasingly likely to be willing to share but with the caveat that we get something in return. Part of it is going to be in the form of remuneration, but part of it is going to have to be based on a restoration of trust. 

One this that is likely to emerge, and possibly in the short run and which is not highlight in the report is that we are going to be moving to a permission-based world.  Things just showing up on my mobile device that are unwarranted are not going to be appreciated. Rather than entice they may disgust. It is why advertisers are going to have to rethink the fact that the mobile context is a very different animal than our PCs and laptops and there is a fine line between intrusiveness and being delighted by the convenience of having our known needs and even those we were not aware of aimed at us.  In fact, it is one of the reasons why “free” apps with all of that embedded advertising are becoming problematic.  Not only are they intrusive but they also kill battery time, a scarce resource that is the bane of all of us.

PwC is right by in essence saying that we all have a price.  Finding what that is however is tricky business and service providers and advertisers need rethink the rules and terms of engagement if they are going to get the permission they seek to sell us something.  

Edited by Alisen Downey
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