Millennial Media SMART reportSmartphone penetration is fueling mobile ad budgets as brands grasp the opportunity to engage, interact and drive results further down in the purchase funnel. In the U.K., for example, where smartphone penetration is now nearly 60 percent, the IAB (Internet Advertising Bureau) reports that mobile advertising is on a “meteoric rise,” growing 132 percent to reach GBP 181.5 million in the first half of 2012. It now accounts for 7 percent of all digital ad spend.

This dovetails with new numbers from Millennial Media that lists the big spenders (by vertical) and shift to more precise audience targeting techniques. In Q2 2012, five verticals experienced triple-digit growth year-over-year on the Millennial platform. Specifically, the recent SMART report (Scorecard for Mobile Advertising Reach and Targeting) has drawn from actual campaign data to conclude that ad spend for the Automotive vertical grew over 370 percent year-over-year. Notably, Automotive has been a Top 10 Global Advertising Vertical on the platform (ranked by spend and growth) for over a year. DOWNLOAD REPORT HERE

The increase in spend is attributed to the rise in brands, marketers and campaigns harnessing mobile to generate awareness and excitement around new model launches.

Interestingly, the vertical Personal & Home Services also saw a jump in mobile ad spend. While the vertical doesn’t make the Top 10 Global list for growth to date, it did show a year-over-year increase of 353 percent. The report suggests this increase could be linked to brands and marketers using mobile advertising to connect with consumers around seasonal home and garden needs, such as pest control.

An examination of mobile ad calls to action shows that app download still accounts for the lion’s share of campaigns (based on data around the top 750 campaigns on the platform). It came in at 44 percent, followed by enroll/join/subscribe (23 percent), site search (18 percent) and store locator (13 percent).

Audience targeting trends

While the report doesn’t provide detail about the breadth of audience segments, we do have some insights into how brands are fine tuning targeting to deliver advertising to the real-world audience most likely to appreciate it and respond.

For Q2 2012 the most frequently targeted audiences on the Millennial platform included IT Decision Makers, Gadget Geeks, Movie Buffs and Moms.

Top Targeted Mobile Audiences

Read between the lines, and marketers’ mindsets are evolving. It’s not about broad reach its about precise targeting that allows a more perfect match between the advertising and the audience.

In line with this, In-Market Auto Intenders were the leading audience on the Millennial platform — a development linked to the fact that the Automotive Sector was also the biggest spending vertical overall in Q1 2012.

Other top ranking audiences included:

  • DIYers, a group that was frequently targeted in Q2 2012 by marketers delivering people advertising related to seasonal home and yard care needs. This, in turn, contributed to the growth of the Personal & Home Services vertical year-over-year.
  • Business Travelers, a group that includes road warriors who 1) have a variety of need states and interests and 2) naturally reach to their mobile devices every step of the journey.
  • Mobile Switchers, a group that includes consumers at the Consideration stage of the purchase funnel where they are open (and eager) to research the newest technology available.

Global mobile trends

The new report also recounts key eMarketer research findings and complements these insights with internal data to reveal overarching trends in smartphone use and activity. According to eMarketer, smartphone ownership worldwide is set to grow at a compound annual growth rate of 37 percent into 2016. Put another way, smartphones are expected to be in the hands of nearly one-third of the world’s population.

The Asia-Pacific region will see the largest growth in the number of smartphone users with Indonesia and India leading the way. But, in 2016, the market there will be far from saturated.

But penetration isn’t the only area of growth. Millennial observes that more advertisers in South East Asia have started to make use of “some of the more unique benefits of mobile” in their campaigns. Notably, brands are harnessing location-based targeting. what’s more, “in Q2 2012  brands that used locations-based targeting had greater return.”

This differs from the audience targeting techniques chosen by marketers in other regions. In North America, where eMarketer forecasts significant smartphone growth driven by users upgrading their devices or increasing the number of mobile devices per household, Millennial indicates brands are focused on techniques that allow them to reach the right customer in the right context.

My take:

Olympus case studyEvery report in this series is a worthwhile read if you want to find out how brands are leveraging mobile to connect with their target audiences. The highlight here is the data that sheds important light on how marketers are making the effort to reach a more relevant real-world audience segment and the results this strategy delivers. Gina Preziosa — VP, Group Digital Media Director, Mullen mediaHub— summed it up best when she said: “Using a combination of Audience Targeting and an in-mobile camera simulation demo, we were able to reach in-market camera shoppers with relevant messaging and a rich mobile creative experience.”

This post is part of our Mobile Advertising Briefing Room, a thinking space dedicated to providing its community mobile intelligence, consumer research, case studies and industry best practices that equip marketers to reach and engage their target audience at scale. This discussion is hosted & sponsored by Millennial Media.

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