Sunday, November 4, 2012

Growing Impact of Mobile Advertisement

Businessweek recently published an article about the growing impact of mobile advertisement and the struggle for companies to find successful methods of mobile advertising. The majority of smartphone users constantly have their phones on them at all times, therefore they “collect far more data than a desktop PC” (Businesweek). Companies should take advantage of this information and use it to increase sales and broaden their customer base. Businesses must figure out ways to personalize ads tailored specifically for the mobile user. In order for mobile advertising to be successful, it needs to be useful to the customer and “deliver value rather than just describe value” (CNN) unlike traditional TV commercials and print advertisements. 
The article calls attention to the inefficiency of current mobile ads. Two common forms of mobile advertisement currently used by companies are small banner ads that simply entice a user to click on it, and interstitials-pop up screens that interrupt users as they try to read an article. These are disruptive to a mobile user and have a low success rate in generating revenue from the ad. Personally, when I listen to Pandora on my Iphone, I simply ignore the 30 second commercial and never click on a banner since they rarely pertain to my interests.
Google is now developing services that let users contact advertisers directly via phone call with one click after seeing an ad. Google Now is a “virtual assistant” (Businesweek) that stores information about a user’s recent locations and can provide a traffic report along with a coupon offer for a bagel purchase at a cafĂ© on the user’s way to work. Another Google development is the use of Google Wallet, a mobile-payment system. When a customer uses Google Wallet to pay for something advertised through Google, conclusions can be made about the efficiency of the ad. The more efficient the ad, the more Google can charge the companies.
Facebook and Twitter are integrating ads directly onto the users’ feed. On Facebook, a user can claim offers and coupons, simply by liking the company’s page. This then shows up on the user’s friends’ newsfeeds, enticing them to do the same. Twitter follows a similar format by featuring promoted tweets. These promoted tweets seamlessly blend into a user’s twitter feed, making it appear as though a friend “retweeted” the advertisement. When I see my friends on Facebook “liking” different companies’ pages, I am more enticed to check out the brand and take advantage of the coupons.
One potential risk that companies must consider is the potential violation of personal privacy. How much should a company be able to know about a mobile user's habits and interests? Personally, I wouldn’t want advertisers to know my daily route to work. Other customers may be uncomfortable with sharing their shopping habits and interests to all their Facebook friends. Although catering mobile ads specifically to a user can be extremely successful, how much information should companies be able to access about a person? 

Watch the video below to see how large of an impact a smartphone has on consumer behavior:


  1. This comment has been removed by a blog administrator.

  2. While Businessweek may believe that mobile advertising is the up-and-coming way of reaching consumers, I disagree. My first issue with mobile advertising is space; the screen of a phone isn’t exactly ideal for reading ads. On a space as small as an iPhone or as large as the screen of a tablet, the graphics of an ad are still not going to be as crisp and enticing as they would be on the screen of a laptop or television. My next objection to mobile advertising is the inconvenience and irritation it causes to the user of the personal mobile device. Attempting to use the internet on one’s phone has enough frustrations involved as is, and adding pop up ads to this would not bode well with the average smart phone user. In continuation, from the perspective of a company’s marketing division, is mobile advertising really the most effective use of their funds when they could just advertise online to a bigger base of people? I would say that the only thing mobile ads have going for them at the moment is their creativity; interactive advertisement may be the only way mobile advertisement can be salvaged from the irritation of the smart phone and tablet user. Two years ago, Steve Jobs, the King of smart phones himself, proclaimed that “mobile ads suck.” I’m inclined to agree with him today. Mobile advertising has a long way to come, but perfection can’t be expected from such a young technique. As companies such as Verizon phase out basic phones and begin to make data packages mandatory for users, the market for mobile advertising will only get bigger and hopefully less irritable.


  3. It is now a custom in today’s society to have a smart phone. Most of this generation actually heavily relies on their smart phone. It is a way for people to get coupons, look up movie times and even find a local restaurant to grab lunch at. I think that in order for businesses to be successful they need to have a mobile site, and even better, they should have an App.

    Just over thanksgiving break I was in Lord & Taylor when a woman came up to me and asked me if I had a smart phone. She did not own one and the only way to redeem an additional 25% off her purchase was too use the Lord and Taylor App to get the code and number. After just one minute of texting the number it replied back with a code that we told the cashier. It was so simple and saved us both a lot of money, and could only be done with a smart phone. It is things like this that entice people to ditch there old flip phones and get a smart phone.

    I often find pop up adds to be very ineffective, they are actually more annoying then anything. Companies wont get a customer by hassling them, it instead makes the customer resent the company and not want to give them business. Just as I went to watch this youtube video a pop up ad came up within 20 seconds. I immediately clicked the exit button before even reading the add. If companies are looking to reach their customers, this is definitely not the way to do it.

    I personally feel that the best way to reach a customer is through Facebook. When someone likes your companies page, you will automatically know that they are interested and can send them coupons to increase their purchases of your products. This is not an annoying way to get your name out their because technically the customers care coming to you by liking your page. I have recently seen on instagram many people reposting pictures of a company. Someone will tagg the companies name in the caption hoping that they are one of the first 2,000 people to repost it; resulting in a free product of some sort. This is a great way for a company to get their name out there.

    I think that customers will come to the company if they are interested. This doesn't mean that the company should just stop there and not try to advertise to other people, but I think it should be in a way that is not hounding the customer with emails and pop up adds. A happy customer will bring returning business.

  4. For most of us, our first instinct is to click out of an ad when in appears on our phone. I do it all the time. People automatically click out of apps because they do not want to be bothered when they are in the middle of using their phone. These annoying pop-up ads give a bad name to mobile advertisements.

    An interesting flaw I read is the idea that even if an industry could deliver mobile ads that consumers were interested in, they might not be able to source and deliver the actual ad. An example I read said, “I may know with 99% certainty that a user is interested in movie tickets to the Avengers – but unless I’m running a direct campaign for the Avengers, it’s unlikely I’ll be able to find, source, and serve that person an in-app ad to meet a need we know exists.”

    Another problem I found interesting is that versions of creative formats in mobile advertising have no standard for building and delivering ads across differing devices because of screen sizes. With this problem, it is going to be hard to make ads appealing to all mobile users.
    An interesting challenge I read was that although people click on mobile ads, advertisers wonder whether if it is the “fat finger effect.” In other words, it is hard to see the effect of mobile ads because of accidental clicks on tiny touch screens. Although our clicks online can be tracked, it is hard to know whether someone sees a cellphone ad for an offline business and then walks in. It is difficult for advertisers to judge how effectively their spending on mobile ads is.

    Despite the numerous problems mentioned, some companies’ find mobile advertising successful. For example, Pandora reported that in the second quarter that ended in July 58 percent of its revenue, or $59 million, came from mobile ads.

    If problems with mobile ads can be fixed, then their effectiveness on users will improve tremendously.


  5. Mobile advertisements seem to be a very difficult way to advertise to customers. I know for one when I am on my smartphone, I am not paying attention to the small ads that pop up on the screen. It just makes me wonder if this is a practical way to advertise to potential consumers. While there my be a few banner clicks, are customers actually interested in the products or accidentally tapping the banner while navigating on their smartphone. If this were to be the case, mobile advertisements would not help companies get more customers.
    I also have a concern with this just aggravating customers and drawing them away from the product being advertised. If google is thinking about pursuing their method of calling consumers who may be interested in an advertisement, I think they should reconsider. For one, people typically browse their phone on google when they are bored and don't feel like interacting with people (I know that's the case with me), so will calling these consumers really work? I would not want to take a call from an advertisement, as they would just be an inconvenience. If I am browsing google, Facebook, twitter, reddit, or any website, I don't want to receive a call if I accidentally click an advertisement, and I know for my family we are always running out of minutes for our phone plan. Taking a phone call would lose minutes for us, so this would not be ideal. I think what would be good is sending a text for advertisements. We have unlimited texting for our phone plan, so a texted advertisement would be a pretty good idea. Either way, these companies will need to develop ways to advertise to users on mobile phones as more and more people get the smartphones, eventually to the point where everyone will have them.