[opendtv] Borrell: Local Mobile Ads To Double This Year
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 14 Apr 2010 10:34:02 -0500
Unbelievable how anyone can gush over spam so unabashedly. Mobile devices,
seems to me, are more similar to your cell phone than they are to your
snail-mail box full of junk mail. People will most likely react to an
approaching torrent of mobile spam with something like the do-not-call list. Or
has this not occurred to these guys?
Bert
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http://www.netnewscheck.com/article/2010/04/13/2169/borrell-local-mobile-ads-to-double-this-year/page/1
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Borrell: Local Mobile Ads To Double This Year By Chris Kouba
NetNewsCheck.com, April 13, 2010 12:04 PM EDT
Business spending on mobile-marketing will more than triple this year as the
category starts a soaring 5-year growth trajectory, according to a Borrell
Associates forecast to be released this week. And local mobile spending will
double in 2010 as it begins a similar 5-year boom.
"If this were a drag race, the pacer car just exited the track and everyone's
hitting the gas," said CEO Gordon Borrell. "With mobile devices already in the
hands of 80% of consumers and devices suddenly becoming more graphical and
useful, local mobile marketing appears to be on a very fast jag."
It's a breakout year for a new disruptive marketing channel, says Borrell's
2010 U.S. Local Mobile Advertising & Promotions Forecast. Starting with mobile
coupons, mobile spending will eat into print Yellow Pages and direct mail
revenue much as the Internet has disrupted newspapers. It may even pull dollars
away from the Web-based advertising that spawned it.
Nationwide, mobile marketing will jump from $2.7 billion in 2009 to $9 billion
in 2010, the report predicts - and then will rocket to $56.6 billion by 2014.
Two-thirds of the spending will be various forms of advertising, but one-third
will come from promotions budgets to enable coupons, contests and discounts.
Spending by local businesses will follow a similar path at a slightly slower
rate, jumping from $285 million in 2009 to $586 million in 2010 - and then
spiking to $14.7 billion by 2014.
"It all begins to look a lot more local," said CEO Gordon Borrell. "Marketers
really understand that the people who are going to buy from them are 5 or 10
miles down the street. Even national marketers are targeting local.
" Today at lunch I'll go on my Droid phone and touch an app that will guide me
to coupons within 10 miles of wherever I am, whether I am in Orlando or
Williamsburg or New York city. It's much more powerful than a stack of coupons
that are only for businesses within a 10-mile radius of my house."
Adoption of this new marketing medium will be the fastest yet, the report
predicts, with several factors driving the growth:
*A pre-installed user base. With 80 percent of the population using cell
phones, and 31 percent already switched to smartphones, Borrell believes mobile
ad share could reach dominant penetratration faster than any medium before it,
including broadcast TV and the Web.
*Ease of use and convenience of portable devices.
*A proliferation of new mobile devices and apps. "Think beyond phones, PDAs,
and notebook computers," the report reads. "Gaming devices, e-readers, cars,
and cameras can also be included."
*What about tablet computers like the iPad? "Yes, that's what drives a lot of
the future growth," said Borrell. "These projections are for personal
interactive devices - but not out-of-home screens that 'move' in elevators,
taxis or buses.
Borrell Association projections are based on a mixture of media companies'
receipt-level data, plus surveys and other research that tracks business
spending. "We dig deeper into more sources and deeper local sources than other
projections," Borrell said. "That's why our numbers tend to be a bit bigger
than other numbers."
"It's like trying to count the trees in a forest. You can take an aerial
snapshot and get a pretty good count of the big trees, but we're getting in
there and counting saplings and new growth in the forest as well."
Borrell is bullish on mobile coupons to kick-start the growth, particularly for
small- and medium-sized businesses.
"Anecdotal results are already there, big time, for the few SMBs who have tried
it." reads the report. "Redemption rates for mobile coupons are 10x that of
mail- or newspaper-distributed coupons. When a restaurant in Texas pays $37 to
send out 500 text messages for a "buy-one/get-one-free burger" offer and gets
60 people to walk in the door, for incremental revenue of $1,000 per day,
there's something dramatic going on."
Beyond the obvious appeal to consumers, Borrell sees coupon functionality
growing as devices mature. "The simplest thing - texting - will take hold
first," he said in an interview. "With all the other things like the iPad, what
will happen likely is newspapers and other companies will port over all the
content and put some ads on it. But the winners in the end are people who come
out with completely new applications. ...
"The winners in the end will be the people who build the business to the exact
specifications of what mobile can do for it."
The rapid rise of mobile media gives great opportunity to companies that make
the most of it, Borrell said.
"Yellow Pages could be big winners if they transfer customers from one medium
to another," Borrell said. "The biggest potential loser in this is direct mail,
particularlly with couponing. ... Actually, big losers are any local media
companies that don't understand or misinterpret the power of digital marketing."
Many media companies are shifting from "selling ads" to acting as marketing and
research consultants to help business understand the explosion of interactive
options, Borrell said. "Local advertisers are even more confused than media
because they're getting so many opportunties thrown at them. We recommend that
sales forces explain what's going on. ...
"They're not saying 'How much would you like to buy?' They're saying 'How can
we serve you?' ...
"Everyone underestimates the confusion for the local advertiser. If you have a
local sales force, you have a much stronger opportunity to sell. It's just much
more comfortable for a local business face to face than with someone they don't
know on the phone. Of course, the results have to be there, as well."
What about media companies who don't embrace this kind of change?
"It feels like being nibbled to death by ducks."
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