Mobile Advertising: The Next Frontier for Marketers
Mobile advertising is currently the fastest growing medium of advertising, but also is the least understood and appreciated. A recent article in the Wall Street Journal looked at mobile ads and their relatively low cost compared to other types of advertising and the difference in cost is astounding (see graphic below). Mobile ads currently cost less than half the cost of online ads and just 9% of the cost of television ads. That’s right, you can reach 11x as many people for the same spend if you choose mobile over television!
There may be good reasons for some of the difference in cost as each type of advertising has it’s strengths and weaknesses. For the moment, mobile ads are generally seen as less effective than online ads, having lower conversion rates in most cases. But this is not the case across the board (local businesses such as restaurants, retail, and professional services tend to do very well advertising on mobile) and better mobile ad units and more effective targeting will close the gap over time. In addition, many companies do not yet have mobile friendly websites so advertising on mobile doesn’t yet make sense, but that will also change quickly enough, increasing competition for mobile ad units.
And yes, so far television remains the strongest medium for branding, so large brands will pay a premium for it. But it’s difficult to believe that television is 11x more effective than mobile advertising overall. Even worse, it’s difficult to believe that television remains 5x more effective than online advertising, which is clearly very effective at both branding and driving sales! This really is just a case of marketers being slow to adapt.
Lastly, this is a comparison of costs on a CPM basis, not CPC. But where online and mobile really shine is that you are able to buy the ads on a CPC basis, paying only for the ads that are actually clicked. This is a huge advantage over television and other traditional media which can only charge based on a CPM or circulation model.
As I wrote earlier in the year, online ad spending has passed print ad spending this year as marketers are understanding how to make use this fairly new advertising medium. Online ads are also quickly closing in on television for total ad spend, despite the vast difference in CPM costs. But for the time being, online and mobile really do present a fantastic opportunity for the savvy marketer.
Just as we were big proponents of Facebook advertising in the early days due to it’s extremely low cost at the time, we’re now also big on mobile advertising. It may not be right for every situation, but if it works for your business it can provide a great opportunity to get much more from your ad budget.