Monday, 21 June 2010

Why is mobile important

Why is mobile important

I read a quote from Eric Schmidt in the Telegraph recently stating that Google had changed its strategy to focus on mobiles rather than PC’s. This got me thinking, why is Mobile such big news for a traditionally ad revenue driven company and why are all the tech giants focusing so much of their energy in this direction.

After all, mobile’s share of total ad spend is still relatively small, in fact the IAB published figures recently stating that total mobile ad spend in the UK in 2009 was just 37.6 Million Pounds which isn’t much when compared to more than 3.5 Billion that is the total online ad spend.

So why the shift in focus and why is mobile getting such a disproportionate share of attention from the major movers in the industry.

1. It’s where the users are

The main reason has to be that consumers are spending an increasing amount of their time online through mobile devices. Applications and mobile focused sites have made objectives far easier to achieve online and it can all be done while on the go so consumers are spending more time on mobiles. In fact a recent IAB study shows that 23% of time spent accessing internet in the UK is currently on mobile devices. This is most easily seen on social networks where time spent online is now greater on mobiles than PC’s for some sites. Take Facebook for example the same IAB study shows 41 minutes a day on average is spent on Facebook via mobiles compared to 31 minutes a day via PC.

2. Mobile devices are improving

The next thing is that mobile devices are improving at a rate of knots, so much more can now be achieved. The new 4G HTC Incredible on the sprint network in the US can operate at 10MB/s which is faster than most broadband connections. This is the extreme but it is certainly the future and shortly that will surely be the standard. The iPad, and larger screened mobiles are also vastly improving usability. This means that we can do far more with our mobile devices than we could last year and the same goes for next year.

3. The cloud

Lastly, the cloud makes all the difference. It opens up wide avenues for increased mobile usage. I started this blog post at work, added to it while waiting for a meeting on Wednesday and then logged in from a different laptop at home to finish it. This sort of behavior is increasing the reason for users to access the internet via mobile and as these applications grow, mobile usage will grow with it.

So why are advertisers getting so excited

Location aware targeting is the big deal for me. Location aware search results are so much more relevant for the users. If for example I am in London Bridge and searching for Chinese takeaway in London Bridge, there is a pretty good chance that I will follow through and make a purchase if there is one nearby. As the relevance is greater, there will be a higher conversion rate which means greater ROI which is what it is all about.

So where is the future?

According to the Global System for Mobile Communications Association, 50%* of all mobile internet time in the UK is going to Facebook at the moment.)

If Facebook can get location specific ads right, it could be huge. They already know how old you are whether you are a male or female. They know what your interests are and who your friends are. If advertisers can combine this with knowing where you are at any moment, the targeting opportunities are endless.

*(Stat found here