Every year, analyst Mary Meeker produces a dense report that offers insight into the state of the internet. All 213 slides of this year's presentation are worth a marketer's attention, but one in particular rises to the top. To paraphrase a clickbait headline, "No. 45 Will Blow Your Mind."
As slide 45 illustrates, while marketers are fairly well subscribed to desktop media, they are still way behind on mobile media. The chart shows a major gap: Consumers spend a full 25 percent of their time on mobile media, but marketers allocate only 12 percent of spend to mobile, a sizable deficit the slide describes as a "$22B opportunity in the USA."
What accounts for this gap? As it happens, the underlying cause for the lag in mobile spend isn't that there are concrete problems blocking its rise. It's that mobile is still just crawling out from beneath the shadow of its early days, when it presented marketers little more than a smaller screen on which to apply the same well-worn desktop tactics, and to less-than-exciting results. There is now enough evidence to suggest that, despite those lingering concerns, the time is now for marketers to get excited and lean into the mobile opportunity, especially while the channel remains remarkably underserviced.
Place in the media mix
In the "early days," marketers had negative experiences with mobile. It was an immature channel and mostly just a smaller, portable extension of the same advertising opportunities available on the desktop. This may be partly because of how mobile advertising was thrust -- perhaps even forced -- to the forefront by Google, when it changed its algorithms to favor mobile-optimized sites. This move made it almost impossible for advertisers to exclude mobile from spend through the AdWords platform. During this time, brands had to spend on mobile because of Google's test run. And during this period, what they saw was their desktop ads, when served on mobile web and in-app, did not perform as well as the same ads on desktop.
Of course they didn't. Mobile's place in the media mix is now appreciated as wholly unique, and thus requires a creative approach equally unique. It is finally beginning to cast off its legacy as a pale imitation of desktop and assume its proper place in the media mix.
What is that place? Research from the Mobile Marketing Association sets a clear path ahead: a close study of recent in-market campaigns from Coca-Cola, Walmart, AT&T, and others shows optimal spend for mobile is between 8 and 15 percent of total budget. That's based on real results showing mobile as driving nearly double the ROI as TV, and performing dollar for dollar, well above the rest of the campaign writ large. That data from the MMA joins a mounting chorus of researchers and analysts finding that mobile, far from being an experimental channel, belongs as an established pillar of any cross channel campaign.
Mobile-first creative finds its formats
The trouble is that sometimes the creative portion of the campaign still feels very experimental. For the marketers that are excited about mobile, they arrive to a medium that is still in the early stages of finding its best-performing ad units and establishing its creative best practices. The early stage of creativity is thrilling, for sure, but the dollars follow proven tactics, not just experiments. What works on mobile? Can we really say for certain?
Yes. Formats like filmstrip, adhesion banners, pulls, and sliders have proven their effectiveness, crowding out some earlier, less interesting formats that attempted to awkwardly apply desktop technology. This emerging consensus provides a solid foundation for creatives to work their magic, and for brands to get out their checkbooks.
Macro trends in technology will only accelerate the discovery and adoption of new mobile formats, and will only make the already successful ones more effective. Thanks to ubiquity of bandwidth, fast phones and ever-faster mobile networks have made mobile video into the hottest category in digital advertising right now, where it was nearly impossible to scale just a few years ago. Last year spending on mobile video rose 80.6 percent, according to eMarketer. This year it's expected to grow another 47 percent. That's a sign of maturity, not hype.
Measurement moves beyond the last click
But a broad recognition of mobile effectiveness, even down to the specific format, isn't enough to draw the serious dollars into the medium. Marketers demand transparency at the impression level, and in real time. So, despite all the remarkable innovation in mobile formats, part of the reason for the lag in mobile spend can be fairly attributed to the challenge in measuring mobile effectiveness with precision. Again, we find a case where the standards and practices that anchored desktop don't quite translate.
Advertisers are getting savvier about adopting more sophisticated attribution models that rely less on the last click, and give more accurate weight to executions up the funnel. While it's happening more slowly than some would like, the measurement criteria are indeed evolving with the medium itself, and the result is more and more strong evidence for the effectiveness of mobile-first campaigns.
Mind the gap
All in all, it's time for marketers to put aside their fear of dangers and shortcomings of mobile advertising and instead heed the real message in Meeker's words: whatever business you're in, your rival is likely to be dramatically holding back and under-spending on mobile. If you read between the lines, mobile has already proven itself worthy of serious creative attention and serious budget allocation. And yet, the majority of the marketplace hasn't moved quickly enough. There are certainly rewards for those who do -- but act now, because the window is closing -- and fast.