New breed of mobile ads aim to amuse, not annoy
Bloomberg in Barcelona and London
This year's Mobile World Congress may prove to sceptics of mobile phone advertising that it's not about uninvited banners and annoying pop-ups any more.
At the Barcelona event, which kicked off yesterday, companies from Shazam, which recognises songs in background noise, to Nokia's maps unit will showcase applications that have helped create a new breed of mobile ads. Advertisers are betting those apps, along with bigger smartphone displays and faster network connections, will grab consumers' attention.
The move of online commercials from the desktop computer to smartphones and tablets is set to accelerate, with spending on mobile ads forecast to jump 37 per cent this year, according to research firm Gartner. Facebook, the largest social media network, has shown that its focus on wireless can pay off, having garnered more than half of its ad revenue from wireless devices for the first time in the most recent quarter.
"What has changed in the past six months in mobile ads? Facebook," said Victor Malachard, chief executive of Adfonic, an ad-space purchasing platform for mobile that counts Samsung Electronics and carmaker Peugeot among its clients. "Facebook has been able to demonstrate at scale that mobile advertising works - that has grown the pie for all of us."
Spending on mobile ads will probably reach US$18 billion this year, and may more than double to US$42 billion by 2017, according to Gartner. It will "really take off" in the next three years because the pool of smartphone users has become big enough for advertisers to devote a bigger portion of their budget on, said Gartner research director Stephanie Baghdassarian.
Advertisers want you to use your smartphone to scan, hover and tap. At this year's National Football League Super Bowl, ads for Bud Light beer and Jaguar cars showcased "shazaming".
Using Shazam's application during Bud Light's ad unlocked a free song that could be downloaded to the phone, while Jaguar's started a video game.
With its listen-in feature, Shazam is collecting information about when and how ads manage to attract consumers' attention, as well as how they react. With that data, the company can build up user profiles to generate analysis it can then sell to brands.
Location-based programs developed by the likes of Nokia's Here unit and Yelp are vying for advertisers' attention. Yelp's application, for example, recommends restaurants, shops and bars as users point a phone's camera around. The localisation data and how one reacts to Yelp's suggestions will help the company accumulate knowledge about the user.
WPP's mobile marketing agency, Joule, recently promoted Yum Brands' 24-hour KFC chain in China by allowing potential customers to locate their closest restaurant with just one click and share that on social networks.