Agencies and brands are forecasting large budget increases in the mobile marketing sector according to a Mobile State of the Industry Survey, Q1 2010, launched recently by New York-based Mojiva.
Mojiva, which delivers full-service, mobile marketing solutions for advertisers, publishers, and agencies, also found that, while publishers achieve measurable success, they still struggle to monetize mobile inventory.
Part of the difficulty in trending mobile marketing spending, is that change can happen almost overnight. In August 2009, DM2PRO.com, the member site of digiday:DAILY and digiday:EVENTS, surveyed 30,000 of its constituents and garnered 292 marketing, publishing and technology respondents willing to discuss their mobile marketing experiences in advance of digiday:MOBILE in NYC in mid-September. That survey’s projected spending for last year’s holiday quarter paled in comparison to forecasts a mere 5 months later.
By Q1 2010, in preparation for the digiday:MOBILE LA show March 8, the number of respondents to the Mobile State of the Industry Survey had more than tripled to 985, and mobile spending projections took a similar leap. This larger data set revealed a growing experience base with mobile advertising, across all three categories: publishers, brands and agencies.
Publishers who developed experience with mobile advertising jumped 9.7%, brands nearly 12% and agencies 7%.
Among agencies, only 6% of agencies that say they’re cutting back on mobile spending and 1% are holding steady. For the rest, mobile ad spending is expected to increase this year, dramatically for many. Of 140 agency respondents who see mobile marketing increases, the average hike was pegged at 33%, one- quarter of them predicting increases of greater than 50&, and 10% predicting increases of greater than 100%.
When asked to compare individual average client mobile ad budgets in 2009 with budgeted spending in 2010, client spending was pegged at $143,000 on average last year, and $260,000 this year – an 80% increase.
Of 115 brand advertiser respondents, only 20- 30 weighed in on spending comparatives, but these predicted that 2010 mobile advertising spending will more than double in aggregate, from an average budget of $269,000 in 2009 to $679,744 in 2010. Many respondents said simply that increases will be 10% -to-20%. The next most popular choices were less than 5% increase. However, the same number of managers predicted an increase of at least double and, in come cases, more than triple their 2009 mobile spending. Some 10% said their mobile budgets would more likely decline. And more than 20% of non-mobile (to date) marketing respondents predicted that they’ll spend more than 10% of their total 2010 marketing budgets on mobile.
As for where they’ll get the money to take the plunge, 32% of these marketers say it will be ‘incremental spending’, while the next most popular choice of funding was from online budgets (at 26%).
If current trends continue, the clearest beneficiaries of this spending will be the third of mobile content producers for which mobile is their main livelihood, and the mobile ad networks that facilitate most of their revenue. Based on publisher (content producer) respondents, about one-third said that mobile represents 100% of their revenue.
Most mobile publishers support their efforts with advertising (49%) or advertising and subscription sales (30.6%). More than half of publishers (58.1%) participate in a mobile ad network, and ad networks contribute nearly 60% publishers’ ad sales.
But 71% of publishers say their return for mobile advertising is higher from internal ad sales than it is from a mobile ad network. Another 18% say mobile ad sales are comparable and 10.6% say mobile ad network ROI is higher.
Asked to rank their most important factors in mobile media buys, agency respondents said ‘content/context’ and demographics were tied followed by ‘reach’.
Mobile ads were judged to be superior to apps in four categories, traffic driving, direct response, awareness and making a brick-and-mortar sale. For loyalty, making a digital sale and branding, they gave the edge to apps. While 71% of brands have a mobile Web site, more than 58% percent also have an iPhone app.
Regarding mobile ad formats agencies considered most effective, mobile coupons scored the most number of ‘most effective’ votes.