Wednesday, April 13, 2011

Ready for the mobile ad revolution?

The next revolution in advertising is buzzing in your pocket or purse. Are you ready?

Far surpassing the powers of print, broadcast and the web, a host of new technologies is converging on the opportunity to use smart phones to intercept – and influence – the consumer as she walks past a store, wheels through a supermarket or reaches toward a product on the shelf.

The technologies include not only the increasingly ubiquitous GPS-equipped smart phone but also window stickers that broadcast messages, interactive bar codes that instantly link to a website and increasingly sophisticated databases that track your individual activities so they can precisely target products or deals to you.

(GPS, of course, refers to global positioning systems that pinpoint the location of the user, and – after she moves a few feet – the direction in which she is traveling and whether she is walking, on a bicycle or in a moving vehicle.)

The mobile ad ecosystem admittedly is a work in progress. As the still-evolving infrastructure matures and coheres, however, more advertising is bound to migrate to mobile because the intimate, personalized and immediate quality of the platform makes it, by far, the most targetable and effective of all media.

The better the mobile ad infrastructure gets, the less advertisers are likely to spend on traditional media. So, publishers need to pay close attention to this futuristic marketing frontier, where a number of major competitors already are well ahead of them.

The mobile ecosystem starts, of course, with the high-tech Swiss Army Knife known as the smart phone. About a third of the 240 million mobile handsets in the United States are smart phones and analysts believe the number will grow sharply in the next few years as cell-phone contracts roll over and carriers compete for new customers by deeply discounting upgraded devices.

At the moment, most mobile advertising consists of little more than banners that, when clicked, link to the sponsor’s site or mobile app. While immediate and interactive, the ads are not particularly targeted to the location or interests of the individuals. But that is about to change, big time.

Not the least of the change agents is Google, which at the first of the year began plastering seemingly low-tech stickers (left) in the windows of dozens of businesses in Portland, OR. But the stickers, which say the business has been “Recommended by Google” and are delivered in a package telling merchants how to advertise on the search engine, are anything but retro. They actually contain low-power radio transmitters that broadcast messages to owners of phones that happen to be equipped with the Android 2.3 Gingerbread operating system.

Thanks to the miracle of what is called Near Field Communications (NFC), the owner of a Gingerbread phone standing in front of a restaurant can read its reviews on Google, visit the establishment’s website, check out the daily specials, receive a coupon for half-off appetizers, make a reservation and book a limo. Using the other functions of the phone, she can invite friends to meet her after work and alert her Twitter followers to the discount pupus.

There are instant connections at the point of purchase for those of us who don’t happen to own a Gingerbread phone. The barcodes and quick-recognition (QR) codes that seem to be on everything can be scanned by anyone who adds any of several free apps to his smart phone.

Barcode readers make it possible to check the price of a product in the store – and rapidly search the web to see if a nearby competitor (or online merchant) is selling it cheaper. QR codes, which are square instead of oblong like barcodes, are turning up everywhere from print advertising to business cards – and could easily be printed on stickers placed in the windows of restaurants. Sites like BarCodesInc.Com instantly generate
free custom QR codes like the one shown at left. Scan it for a surprise.

For all the value of point-of-purchase promotion, the true power of mobile advertising is its ability to put the right ad in front of the right person in the right place at the right time.

A number of companies great and small are working on products that solicit user preferences, monitor user behavior and track the physical movement of users via mobile apps to develop breathtakingly rich targeting profiles.

In one example, Yahoo just rolled out a customized news reader for the iPad called Livestand. Although the stated mission of app is to help users pinpoint news that interests them, there are distinct and obvious ad-targeting possibilities for the data that will be accumulated on the platform.

While plenty of privacy, technology and commercial issues remain to be resolved as the mobile ad ecosystem evolves, there can be no doubt that the revolution is under way. And it probably will happen faster than you think.

2 Comments:

Blogger Luke said...

Good post, Alan.

Location-aware mobile ads are unquestionably the future. As soon as smartphones hit the market, people were talking about walking past a storefront and getting a deal pushed out to them immediately. Five years after the dawn of the smartphone, we still don't have that magical advertising app.

Part of the problem is technical. You want to figure out where the user is, and send them the right ads. That's kind of tricky.

Still, technical challenges are easy to solve. The vastly more difficult challenge is getting the ad inventory.

Here in the Valley, we seem to think that Google, Yelp and Groupon are killing it in the local space. They really aren't. The great majority of small business owners still buy space in their local newspaper, for a million different reasons. Namely, those ads work.

Newspapers can digitize those ads and beat Groupon/Google/Yelp to the punch in mobile. The field is still open.

Tackable plays a lot in this space. We should talk, the next time you're down in the Valley.

4:47 PM  
Blogger Frank H. said...

absolutely stunning at the speed of apps and their application using smart phones and the ipad.... the average person cannot keep up with the daily announcements....it's the gold rush and space race wrapped up in just a few years... I can't wait for 2020...wonder how many metro and subruban daily newspapers will die for lack of retail advertising??? Mark my words they are living on Sunday pre-prints...no longer classified, autos, employment and real estate revenues....gone, gone, gone, gone... next are pre-prints and that will be the death of hundreds of dailies...You heard it hear first!

6:14 PM  

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