Google & Twitter Talk Mobile Advertising @MWC; Why Their Schemes May Backfire » mobilegroove

In the same “well duh” category as the sun will rise in the east and set in the west, we know that more advertising is coming to mobile devices. The topic was heavily discussed this week in Barcelona at the Mobile World Congress (MWC) with debate around consumer behavior and interests.

So where does Google stand? The company staunchly believes that more creativity and higher production values are needed to advance mobile advertising.

Outgoing Google CEO Eric Schmidt used his keynote address to drive home a single message about the real future of the medium. “To me, the tools and technology that allow us to do targeted TV quality ads — again with permission and without violating privacy — is the next great frontier in advertising.”

Twitter CEO Dick Costolo used his keynote slot to focus more on usability, simplicity and the experience Twitter delivers over thousands of devices. But a leaked video gives us the inside track on where Twitter wants to go with advertising (across all platforms).

Will people buy into Twitter’s approach? Near the end of the 40-minute presentation, even Twitter acknowledges that its way of presenting advertising won’t be universally accepted.

“People are averse to change, especially when it comes to advertising, and this type of (negative) feedback is to be expected,” the narrator of the company video admits. However, the number of people put off by the ads amount to an “extremely marginal percentage of the total.”

What about the money-generating Promoted Tweets? Twitter tells us in the video that marketers should expect an “engagement rate” of 1 percent to 3 percent.

How I See It: Having worked in ad agencies for a large part of my career, I have a deep appreciation of top shelf advertising. But a slick look and catchy copy aren’t the only criteria for effective mobile advertising. Relevance, permission and a compelling offer are much higher on my list of must-haves. Twitter’s assessment of how consumers will likely respond negatively to the ads delivered via its service isn’t surprising. Indeed, most people will be “put off by them” – but I don’t expect people to vote with their feet. They’ll likely live with the ads. But that doesn’t mean they will listen to the brand messages. If we marketers want to get consumers’ attention, then it’s our job to connect with the mobile user in a way that is welcome, non-intrusive and personal. After all, mobile is a personal device and we should use a personal touch (and ask permission first).

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Other comments by Schmidt and Costolo during this week’s MWC also speak volumes about the pivotal role of smartphones in — well – everything.

As Google’s Schmidt put it: “This device (the smartphone) has 20,000 more computing capabilities than the lunar mission. Smartphones are clearly taking over, right? Last year I predicted based on a whole bunch of analysis that smartphones would surpassed PC sales. Well I was wrong… smartphones passed PC quarterly sales last week.” In a word: “Mobile is where the action is.”

Without offering proof or pointing us to a study, Twitter’s Costolo said that the use of DVRs is on the decline. In contrast, the number of people participating in social networks in real-time is on the rise. What’s more, Costolo said that those who tweet are twice as active on mobile as they are on PCs.

How I See It: Smartphones are becoming more prevalent and so is evidence that people are moving their daily routines to mobile. Schmidt is right – mobile is where the action is.

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Nokia and Microsoft may have dominated the headlines around Barcelona, but Apple also let loose with a few surprises. From far away California came the word that Apple might soon be introducing a smaller, less expensive and capable iPhone (although the New York Times looked to dispel that rumor late Thursday).

Bernstein analyst Toni Sacconaghi sees an iPhone Nano or Mini as an inevitability, and a smart move that would dramatically expand Apple’s market share.

In a note to clients Sacconaghi wrote that a lower priced offering could help Apple secure a more dominant installed base. “After all, the smartphone world is a platform war, where first mover advantage and scale matters. The dual facts that (1) iPhone has not been available at several very important global carriers and that (2) it carries a very high price point have contributed to creating an opportunity for Android that has been successfully exploited. Particularly with Android now outselling iOS, the imperative for Apple to expand its installed base has never been higher.”

Would it pay for Apple to introduce an iPhone device with a lower price tag? Sacconaghi is certainly convinced. “We estimate that at an end-user price of $150-$200 and no data plan contract, Apple could address potentially all of the remaining smartphone segment, the non-smartphone postpaid segment, and about 15 percent of the non-smartphone prepaid segment. This would amount to an incremental 700M+ units and $90 billion in revenue in terms of market opportunity; even if Apple succeeded in capturing just 5 percent of these incremental units, it would add $12+ billion in revenues and $4.50+ in EPS.”

How I See It: In mobile there is no one size fits all — and Apple execs never said they believed any different.  Marketers shouldn’t have that mindset, either. At this point we don’t know much about the form-factor or the timing of this device, but (if this rumor is true) we can read the introduction of a smaller, cheaper iPhone as a key component in Apple’s strategy to expand its reach. As always, marketers will need to be nimble. We must be ready to adjust our programs depending on our target audience and the devices they carry. If Apple does introduce a game-changing new device, then we have to factor it into our mobile strategies.

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A career author and sought-after speaker, Jeff Hasen builds, strengthens and protects brands. Companies benefiting from his talents have landed on Wired’s list of most innovative entities on Earth and been named pioneers and the early leader in the burgeoning mobile marketing category. Jeff co-created the certification program for the Mobile Marketing Association (MMA). He is one of only two individuals certified by the MMA to train professionals and students on mobile marketing definitions, techniques and benefits. At Hipcricket, he conceived and led the execution of an accelerated rebranding effort in advance of the mobile marketing software and services company being named “the early leader in the mobile marketing space in the U.S.” by Frost and Sullivan. Hipcricket also won consecutive annual pioneer awards from CTIA — The Wireless Association. Follow Jeff on Twitter (@jeffhasen).

This entry was posted on Friday, February 18th, 2011 at 7:18 pm and is filed under Mobile Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.