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 café 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: