What Do B2C Marketers and Agencies See As Mobile Advertising’s Top Challenges?

July 30, 2015

xAd-Top-Mobile-Advertising-Challenges-July2015Mobile advertising is either a significant aspect or a top priority in the overall marketing plan for a majority of consumer-facing brand marketers and agencies. That’s according to a recent report [download page] from xAd, which found more than 8 in 10 respondents from each group saying that mobile ads play at least some role in their marketing plans.

Location targeting proves popular among respondents, with 78% claiming to use location for mobile ad campaigns. The most common use of location is to target a specific audience, followed by targeting consumers around businesses or points of interest and sending location-relevant messages.

Asked to identify the top factor holding brands back from spending on mobile location advertising, marketers (30%) and agencies (29%) each pointed first to the (in)ability to measure success. Among marketers, campaign performance (21%) and education around use cases and benefits of location (21%) were next on the list, while agencies see campaign performance as the bigger concern.

While that suggests that measurement concerns are top-of-mind for mobile location advertising, respondents see things differently when it comes to mobile advertising as a whole. When asked what the biggest challenges are for mobile advertising, the lack of standardized metrics was a top-3 challenge only for marketers in North America and Western Europe. Instead, respondents in 3 of 4 regions covered (North America, Western Europe and Asia-Pacific) tabbed privacy concerns as the top challenge, each time ahead of consumers ignoring mobile ads. Those rankings swapped among Latin American respondents, for whom consumer apathy is a greater challenge than privacy concerns.

The concern with consumers ignoring mobile ads is interesting in light of separate results from the survey, in which almost one-third of marketers and agencies best described their customer base (or that of their clients) as “active and engaged with mobile advertising,” with another one-third describing their audience as “unaccustomed to mobile advertising but could be receptive to it.” (The other answer options were not released in the study.)

Recent survey results from a MarketingCharts study on advertising influence offer some indicators regarding consumers’ attention to advertisers when using mobile devices. Among the more than 2,000 US adults surveyed, 71.5% reported having used a smartphone at some point during the prior week, with 18.2% overall recalling noticing a specific advertiser while using a smartphone. Additionally, 45.3% reported having used a tablet during the prior week, and slightly more than 1 in 10 (10.5%) having noticed a specific advertiser while using a tablet. (These results suggest that among the mobile-using audience, somewhere around one-quarter claim to notice specific advertisers, below corresponding figures for traditional media such as TV, radio and print.)

Of course, the type of ad also has a significant influence. In separate survey results from xAd and Telmetrics, young mobile owners were far more likely to claim that smartphone ads offering discounts and coupons would prompt an action than to say the same for ads targeted to their search. (The opposite was true for older users.)

Whatever the response, one thing is clear: spending on mobile advertising is rapidly growing. In their revenue report covering 2014, the IAB and PricewaterhouseCoopers revealed that mobile ad spend in the US grew by 76% year-over-year to capture one-quarter of online ad budgets. That’s unlikely to abate, per the global survey from xAd, in which 11-22% of respondents (depending on the region) said that mobile ad budgets would increase by more than 50% over the next 2 years and an additional 29-38% said they would increase, though by a smaller margin.

Marketers and agencies were split by region on the biggest recent developments with mobile advertising. In North America, accurate location targeting (22%) is seen as the single biggest development, ahead of user-created content (20%) and new devices (17%). In Western Europe, though, new devices (20%) represent the largest development, ahead of user-created content (19%) and interactive ads (18%). Interactive ads proved the most significant development among those in Latin America and the Asia-Pacific region, with new devices and accurate location targeting also in the top 3 for each group.

About the Data: The results are based on a survey of 574 ad agency representatives (n=172) and marketing decision-makers (n=402) at consumer-facing brands across the world. Respondents spanned 11 countries in 4 regions: North America (n=141); Western Europe (n=142); Asia-Pacific (n=145); and Latin America (n=146).

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