“The Sell Sider” is a column written by the sell side of the digital media community.
Today's column is written by Jeremy Hlavacek, vice president of programmatic at The Weather Company.
Why aren’t more marketers moving budgets to mobile?
Two recent articles caught my attention because they resonated personally and professionally, illustrating that we have arrived in the mobile future.
The first article described a Miner & Co. survey where 57% of parents stated that their young children preferred consuming video on a handheld device rather than a traditional TV. Nearly half of parents admitted to forcing their children to watch their shows on traditional television instead of a preferred handheld device as a form of “punishment.”
As the parent of a 6-year-old, these results could not ring any more true. Although I have never used our beautiful 50-inch plasma TV as “punishment,” I have seen my son actively choose the phone over the TV many times.
The second article focused on how kids spend too much time watching mobile screens, negatively impacting their social and intellectual development. Every parent I know frets about an “iPad addiction,” which will “turn their kid’s brain into mush,” so this one hit home as well. It may be a bit of an alarmist reaction to a technology shift, but in a way it also felt strangely familiar when I thought about being a kid with parents who had the same fears about television. Watching this classic 1980s PSA reminds us that parents shared the same fear of sedentary screen time then as they do today.
In different ways, these two cultural markers scream out what all of the charts and data points have been trying to say: The “Year of Mobile” has passed. Welcome to the mobile future.
However, when I look at the programmatic marketplace for mobile, it seems trapped in the late ’90s. Given all of the real-time data points offered by mobile, it should be the greatest programmatic marketplace ever. Instead most of the business today is large volumes of bulk banner inventory sold network-style. I find this baffling.
If anything, an argument could be made that marketers should be moving budgets from television to mobile ahead of all other digital spend. Sound crazy? Consider this:
TV has always leaned on its massive scale to win marketers’ hearts and budgets. Nielsen estimates that 296 million people above the age of 2 in the US live in a home with a television. In a country of a little more than 300 million, that’s pretty good penetration. Also, during big events like the Super Bowl or the Grammys, TV can be used to reach tens of millions of people at once and create a “cultural moment” that can define a brand. (Dunk in the Dark, anyone?)
What about mobile? ComScore says that in January, 184 million people owned smartphones, for a 75% penetration, which is up 4% since October. And if you consider the 18- to 24-year-old and 25- to 34-year-old age groups, Nielsen pegs penetration at 85% and 86.2%, respectively.
Smartphone scale is here. It won’t be long before everyone in the US has one.
Beyond reach, the other key lever for TV buyers is frequency, given that most of the TV audience tunes in at least once a day, if not more. This creates a great opportunity for marketers to adjust the frequency and recency of their message for optimal performance.
So how does mobile stack up in terms of frequency and time spent? TV still takes up the largest share of adults’ time at 36.5%, but mobile now accounts for 23.3% of adults’ time, up from only 3.7% in 2010, according to eMarketer. This is now greater than online in general. Mobile time spent is in the midst of some serious share stealing with 21% year-over-year growth between 2013 and 2014, at the expense of TV, print, radio and online.
Data And Measurement
One of the biggest knocks against mobile involves data and measurement. Digital buyers trained on cookies and conversions are at a loss in an app-based world. Persistent first-party logins have cracked open some direct-response spending with a deterministic model, mostly in the form of app download ads. But what I can’t understand is why marketers are not more open to probabilistic approaches in mobile?
That does not mean that probabilistic models are flawless, but when so much audience is so active in this channel, why wouldn’t marketers take advantage of their best available option? Furthermore, when you consider the billions of dollars that are happily traded on television based on Nielsen’s statistical models, it seems silly to refuse to invest in mobile due to fears of the flaws in probabilistic modeling.
Sight, sound and motion. Lean-back experiences. These are television’s seductive calling cards.
There is truth to the fact that beautiful video formats are more valuable to marketers. Mobile formats have improved greatly in recent years, and the mobile video opportunity is a big one. But there is still the nagging question of how a 4-inch screen can ever compare to a 50-inch screen?
The answer is: It can’t. Just like a 50- inch TV screen can’t compare to an IMAX theater experience.
Worrying about the differences between these two experiences misses the point. The real question is what do consumers prefer?
The news articles I mentioned show that the choice has been made. And unlike the parents who “punish” their kids by forcing them to watch TV, no one is forcing them to use mobile devices. This must mean that people actually like consuming content on their mobile devices. So wouldn’t it be logical to assume that advertisers should be able to find formats that work as they do on every other media channel? Of course, the answer is yes.
So let’s sum this up. Mobile scale is massive and time spent on devices is devouring share at the expense of other channels. Probabilistic data can give marketers targeting capabilities that are at least on par with television. The creative canvas is different, but content creators seem to be figuring it out, so advertisers will too.
First movers will be rewarded when the opportunity is this ripe. Even a 6-year-old could see that.
Follow Jeremy Hlavacek (@jhlava) and AdExchanger (@adexchanger) on Twitter.