Mobile advertising spend will make increasing headway in the Year of the Horse. What are the implications for marketers?

The year 2013 was an exciting one for marketers around the world. While TV continued to garner the highest advertising dollars, mobile continued its relentless march to be the dominant media consumption device. InMobi, the world’s largest mobile advertising network, saw CPG companies nearly doubled their ad spend with a 175 per cent increase year on year; the trend was similar or stronger across most verticals.

This increase in mobile spends was driven in large parts by a massive shift of consumers to the mobile medium—number of users on the InMobi mobile ad network grew to 758 million by the end of 2013. Not only are consumers moving to mobile in large numbers, they are also spending disproportionately large parts of their time consuming content on mobile. Media consumption research conducted by InMobi and Decision Fuel reveals that the share of mobile across markets is more than 40 per cent of the total time spent by consumers on various media. Mobile’s march as the dominant medium is going to continue in 2014 powered by major changes across technology, consumer behaviour and marketer’s approach to the medium.

Surge in mobile marketing spends

According to a recent study conducted by WARC for the Mobile Marketing Association in partnership with Festival of Media Asia 2014, 90 per cent of brands and agencies see a substantial rise in budgets for mobile marketing in the next 12 months. eMarketer estimates spending on mobile Internet ads, including display and search but excluding messaging-based formats, will reach $4.14 billion across the region this year, up from $2.69 billion in 2012. This will represent 26.2 per cent of all mobile internet ad spending in the world, making Asia-Pacific second only to North America by this metric. By 2017, mobile ad spending in Asia-Pacific will total $13.06 billion, driven by a surge in growth in China, India and Indonesia.

The world of marketing in general, and mobile marketing, in particular are undergoing fundamental changes, driven by changes in consumer behaviour and device landscape. As we enter 2014, it is worthwhile for us to reflect on what these changes mean for marketers.

Shift in smartphone epicenter

Years of phenomenal sales volumes for smartphones in Europe and US have driven these markets to saturation points. Growth in smartphone adoption is now driven by emerging markets in Asia and Latin America. For instance, with a mouth-watering 2.9 billion mobile subscriptions, Asia Pacific accounts for half of the world’s mobile population. This diverse region boasts the world’s largest mobile market (China), the fastest growing (India) and the most advanced (Japan and South Korea).

The most astounding figure demonstrating Asia’s trajectory is its smartphone user growth. In 2012, Asia-Pacific had 618.4 million smartphone users. This year, Asia-Pacific will have 911 million total smartphone users—more than any largest region by that measure, Western Europe (196.1 million by the end of the year) and North America (175.6 million).

The unique Asia-Pacific market dynamics create the world's most exciting mobile market. The combination of a young population, economic growth and a lack of fixed infrastructure in the developing countries make mobility central to the lives of the consumer.

Connected consumer

This focus on mobile will be driven by ever-improving smartphone capabilities, increasing affordability of these devices and increasing mobile internet penetration on the back of declining prices. These factors are driving increase in time that consumers are spending on mobile leading to an “always on” phenomenon.

According to a media consumption study conducted by InMobi and Decision Fuel, consumers in markets such as China and India spend around 40 per cent of their media consumption time on mobile and tablets.

Always on” or connected consumers require an engagement model on the part of marketers that understands the context of each user and provides an experience that best suits that context.

Improved user experience and role of native ads

Media consumption habits of the connected consumer are forcing marketers to invest in improving user experience on mobile. From creating native mobile assets to designing mobile ad campaigns that enhance user experience, marketers will need to recast their mobile strategy that is consumer-centred.

As consumer’s receptiveness to mobile ads grows among smartphone users in Asia, players in the mobile ecosystem including publishers, mobile ad networks, creative agencies are innovating on mobile ad formats that will engage consumers, instead of disrupting their mobile experience. Innovations in mobile ad technology and ad formats are blurring the boundaries between content and advertising and to good effect.

For instance, mobile video content is a growing consideration for both advertisers and media owners. For marketers, engagement for consumers that are watching video on their mobile handsets is relatively very high compared to that on banner ads on apps.

Mobile and big data

With marketers now increasingly adopting an omni-channel approach to engaging consumers, the role of mobile will become central to a marketer’s strategy. A typical smartphone today comes equipped with a large number of sensors all of which are continuously generating data. This data and signals could be as varied as location, speed, content consumed, apps downloaded or transactions made. Leveraging this data for inferring consumer preferences and providing custom experiences that best suit the consumer will be the new challenge for marketers.

Rise of social messaging apps

2013 was a year when social messaging apps started making their presence felt across the world. 2014 will be a year when they may come to define and dominate the way users consume content and transact on mobile. Between them, the leading social messaging apps such as WeChat, LINE, KakaoTalk, WhatsApp and Viber have more than 2 billion registered users, with the biggest ones boasting of numbers north of 400 million users. These are large numbers and marketers need to evolve a strategy for engaging consumers on this platforms.

Summary

Mobile has moved to the centre of media consumption, and Asia-Pacific is where the new action will be. Ad dollars will aggressively follow the consumer on mobile as marketers try and bridge the gap between dwell time and ad spends on mobile. The phenomenon of the “connected consumer” will force marketers to rethink their marketing paradigms with blurring of boundaries between content and advertising. Finally, marketers will leverage big data for driving context-aware consumer experiences as they seek to engage them via omni-channel retailing. There is no doubt that mobile will remain high on everyone’s priority list in 2014 and marketers in Asia-Pacific will look forward to driving the most value from mobile advertising. The innovators amongst marketers have adopted the medium for reaching out to consumers; the fence-sitters need to make up their mind.

Phalgun Raju is the vice president and general manager of the Japan and Asia-Pacific brand business at InMobi.

Original article posted here.