As more people purchase smartphones and tablets, increasing their access to the mobile Web and applications, advertisers are clamoring to engage them there. But the bigger challenge is how to deliver people advertising they are likely to appreciate because it ticks all the boxes. Tim Jenkins draws from his company’s experience with Hartz, a U.S.-based maker of pet care products, to show how knowing people’s offline behavior can vastly improve mobile advertising effectiveness.
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Mobile advertising is set to explode. Market research firm eMarketer predicts that mobile ad spending will increase 48 percent this year from $743.1 million in 2010 to $1.1 billion in 2011. That’s significant growth, but none of this projected spending will be effective if advertisers can’t reach the right people with the right types of ads on the right devices at the right times.
Google’s AdMob, with its 52 percent reach of U.S. mobile users, offers advertisers targeting by device, demographic and people’s interests (based on their keyword search, for example), across 7,000 mobile sites and in 1,600 iPhone and Android apps. It covers the bases for brands that are prepared to settle for an approach that resembles traditional mass-market advertising on television. However, mobile is not TV and mass-market ad networks cannot fully deliver what mobile makes possible: the ability to target a user who has already purchased from your brand or is about to make a purchase in a specific location. This is the true value of mobile, and it can only be achieved as we become better at mapping audiences to their purchasing behaviors.
Mobile audience targeting is a hot topic and a huge opportunity. In fact, the industry search for a definitive solution dates back to 2008 when the audience measurement company Nielsen burst on the scene with Mobile-PRIZM. PRIZM was the first to enable targeting based on demographics and lifestyle attributes, but —much like Google’s AdMob— there was a serious shortcoming.
Close, but no cigar
Put simply, contextual advertising based on lifestyle or interests isn’t enough to map an advertising strategy to the purchase funnel. Behavioral targeting — delivered via mobile to people while they are shopping in physical stores — reaches the right mobile users further down the purchase funnel, which, in turn, increases consumer engagement after viewing the ad.
But there are challenges.
For one, there’s the issue of privacy. What information about consumers, such as age or gender, or geographic location, can be made available to third parties? Since most of this data is currently attributed anonymously, there’s no infringement on consumers’ rights. Yet, as the industry becomes more robust, privacy will continue to be a concern.
Then there’s the technology. For online behavioral targeting to work, cookies are set on users’ computers telling ad networks more about their individual search and browsing behaviors. On mobile it’s not so easy. Google’s Android accepts cookies on its mobile browser, but Apple’s iOS rejects cookies, thus making it extremely difficult to track users’ behaviors. As a result, advertisers are left with targeting by device, carrier, and location. Sure, that’s a solution, but I question whether it is the best solution.
Better targeting has made online advertising more successful, and better targeting is also what is needed to make the ROI of mobile advertising more compelling for advertisers and their agencies. If audience targeting can be done in mobile, more ad spend will flow towards mobile ads.
Achieving ROI
A recent study from market research firm AudienceScience found that 84.8 percent of agencies and 76.3 percent of all advertisers already use audience targeting to deliver relevant advertising to online users. What’s more, advertisers using targeting report they plan to increase their digital ad budgets more than 72 percent this year. Agencies surveyed said they plan to spend 66 percent more on audience targeting. For advertisers and agencies, an effective ad is one that increases brand awareness and purchase intent. Using targeting to deliver the right ads to the right audience increases the likelihood of being able to measure those KPIs more accurately.
According to a recent study — conducted by Jumptap, a mobile ad targeting company and Digiday, a media company and community for professionals who work in the digital media, marketing and advertising industry — targeting and reach top the list of what advertisers are looking for when investing in mobile.
That’s where the work of our company, 4INFO, comes in. We launched the AdHaven Mobile Advertising Platform back in 2010, and the AdHaven Audience Network now reaches over 90 million mobile users through hundreds of premium publisher partners. We have formed partnerships with multiple database marketing and digital companies such as Nielsen Catalina to gather behavioral data, and can map our audiences to specific behavioral segments, giving marketers the ability to reach their purchasing audience. Thus the AdHaven platform processes purchase data from our data partners, including shopper households tracked in the Nielsen Catalina database to deliver the ad to the best possible mobile user on our audience network.
Hartz reaches right users
We tapped into our network to help Hartz launch its new “Crunch ‘n Clean” dog biscuit with DentalShield by specifically targeting dog owners who purchase Milk-Bone products. Of the 90 million mobile users in 4INFO’s network, the AdHaven platform was able to identify six million mobile users within our audience network that had been shown to be interested in shopping for these types of products and would therefore most likely respond to the ads.
These users were identified as belonging to two main segments: pet supply buyers and animal tech/groomers. The AdHaven Platform uses historical data to determine how responsive mobile users would be to particular ads, and combines this information with users in the two main segments to ensure that the right ads are delivered to the most appropriate and responsive users.
As a result, we were able to directly target “pet food buyers” with mobile Web, app, and text messaging. The campaign led consumers to the Hartz mobile landing page, a destination that offered a free Hartz mobile app and a link to an in-store voucher for $1 off their purchase of Crunch ‘n Clean bones.
The ability to define an audience of potential customers based on their purchasing behavior on TV, Internet and in stores allowed us to achieve a significantly higher response rate. Specifically, the response rate to the targeted ads was 77 percent higher than the response rate to run of network ads on the AdHaven platform.
The bottom line: Effective mobile advertising isn’t just mobile-centric. It’s essential to have a holistic view of the customer as they move through their daily routine and across the platforms and screens (TV, Internet, mobile) that define their shopping experience. Delivering relevant advertising in mobile requires the right channel mix (mobile Web, SMS, mobile apps), but even the best balance isn’t enough.
Advertisers should use tools to find the right consumers — ones likely to respond or purchase based on their real-life behavior — to deliver those ads to in the first place. The future of this industry depends on having more access to more data that enables us to better predict correlations of behaviors, while respecting the privacy of individuals. The better we target, the better ads perform — and the more value we provide to advertisers overall.
About Tim:
Tim is the CEO of 4INFO and a seasoned Silicon Valley veteran with more than 25 years in senior operational and executive roles at several tech companies including Apple and Stratacom (acquired by Cisco). At Apple, Tim was responsible for developing the education business division in Europe. Employing a unique channel and product strategy he helped this division grow to over $500M in annual revenue. Armed with extensive experience in developing profitable strategies and scaling companies, Tim will drive the expansion of 4INFO in the rapidly growing mobile market within the US and globally. Tim graduated magna cum laude from the University of Cincinnati with a degree in Business and Finance. Follow @4INFO to keep up-to-date with developments at 4INFO.
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