Mobile advertising comes in four formats: messaging, display (e.g., banner and rich media ads), search and video. There is another format: branded apps. These apps are designed to foster branding but often contains additional functions (e.g., transactions), not just advertising. They are examined in-depth in the chapter on mobile apps. Video ads are essentially a form of display ads. Statistics on them are often lumped together with those on display ads. On the other hand, video ads have their unique characteristics and in some major markets such as the United States they constitute a major category of spending. Examining them as a distinct format can offer valuable business insights.
Messaging is the oldest format and video is the most recent. Search advertising accounted for the lion’s share (62 percent) of the total advertising spending worldwide in 2011, far ahead of display advertising (28 percent) and text messaging (10 percent). This pattern was true for all world regions except Latin America, where text messaging ran slightly ahead of search and far ahead of display advertising.
In the United States, search advertising captured the largest share (45 percent) of $1.45 billion being spent on mobile advertising in 2011. Display advertising (both banner and rich media) was in the second place (33 percent). Among the two display formats, rich media ads took off in 2011, rising nearly eight folds to $224 million that year from only $29 million the year before. It is projected to stay ahead of banner ads in the years ahead. Meanwhile, ad spending in messaging was comparable to search advertising ($254 vs. $253 million) in 2011. It is projected to decline gradually from $254 million in 2011 to $202 million in 2016 despite rapid growth in total mobile ad spending. Its share will decline from 33 percent of total spending in 2011 to below 2 percent in 2016. Video ads had the smallest share (4.7 percent) of mobile advertising spending in 2011 but will grow at the fastest pace, 74 percent annually, between then and 2016. Sometime in 2013, it will overtake messaging as the third largest mobile advertising format (eMarketer 09/06/2012).
Text messaging includes short message and multimedia messaging services.
Short message service (SMS)
SMS refers to the exchange of short written messages, up to 160 characters each, between mobile phones over a phone network. Why such a limitation on message length? Back more than two decades ago when SMS was under development, bandwidth was very limited and expensive. Messages would have to be as short as possible and 160 characters in length were considered as sufficient space for users to communicate most thoughts (Milian, 2009). Messages can also be sent over the Internet but only through SMS centers set up by the companies that own the mobile network in that particular region.
The first SMS message was sent from a computer to a mobile phone 20 years ago on December 3, 1992. Not long after that, Nokia brought to the market the first mobile phone that let users send text massages to each other. This and other mobile phones at the time had only 9 keys with which users entered text; mobile phones with a full keyboard were not introduced until 1997. Texting caught on as cell phone users in various parts of the world discovered by chance that their network operators did not have adequate facilities to monitor and bill for SMS. Later on when this “loop hole” was plugged, users still found SMS attractive as a cheaper alternative to mobile voice-calls (Mukund 2003). Texting continued to gain popularity. Americans sent an average 35 text messages per person per month in 2000, for example, and then 218 messages in 2007 when they sent more text messages than they made phone calls (213 calls per person per month). By 2011, the number reached 357 messages per person per month or about 1.5 trillion messages for whole population of the United States that year. Worldwide, more than 8 trillion messages were sent (Tatango, 2011). That figure should rise to 10 trillion by 2013 and hence average out to about 200,000 SMS per second (SMS Global).
Marketers wanting to use SMS for advertising sign up with a service provider that allows them to use its SMS centers to send out ads to its mobile subscribers. SMS advertising con¬sists of placing a marketing message into a text message that the consumer has opted in to receive. At the phone user’s request, for example, a retailer regularly sends out alerts regarding sale and special events. That retailer may also send out mobile banners, which the phone user can use as a coupon and show at an in-store checkout counter to receive a price discount. Despite lacking the glitz and glamour that are found in other mobile ad formats, SMS has one key advantage: virtually all mobile phones can send and receive text messages. SMS advertising messages can potentially reach the widest mobile audience.
SMS advertising works well when it contains a call-to-action such as sending a message to a short code. Also known as short numbers, short codes are special telephone numbers that can be used to address SMS messages from mobile phones. They are significantly shorter than full telephone numbers (i.e., in 5 or 6 digits) making it easier to read or to be keyed in on mobile phones. Consumers in the United States, for examples, can text the key word “COUPON” to 62297 (or “macys”) in order to receive SMS messages about sales and deals from Macy’s, a leading department store chain. The key word is unique to only a particular advertising campaign. It tells the SMS provider which SMS campaign consumers are requesting to join. In fact, short codes are the only phone numbers that are approved by wireless providers for transmitting marketing or promotional text messages.
Besides inviting SMS replies, SMS advertising messages can also be designed with a call-for-action that, when activated, connects consumers to other media to give them a richer experience. In that case, SMS messages serve as the entry point to other marketing media, e.g., following a link to visit a mobile website, calling a phone number, downloading an app, watching a video or receiving a coupon. Universal Pictures, for example, launched an SMS ad campaign targeted at consumers of digital media in promoting its new release “Forgetting Sarah Marshall.” It sent out SMS ads inviting consumers to reply SARAH to find out more about the movie; those who responded got more information about the film and an opportunity to view the trailer.
SMS advertising works well when the call-to-action messages are clear and relevant, and contains some incentives to encourage actions and reward on-going engagement. Hard-to-notice or confusing calls are likely to be missed or ignored. Calls that are contextually relevant to the opted-in content or search by consumers are likely to bring them back for more. SMS advertising can thus be designed to build interest and engage consumers by inviting them to answer a question, play a game, check out an offer, look up some information or download a discount coupon. Each message, in “bite size”, is intended to lead to further messages, thus turning these messages and their generated responses into a dialog with consumers.
Multimedia messaging service (MMS)
Coming a decade after SMS, MMS takes messaging one step further. It can deliver not only text messages but also rich content including images, videos, games and sound, thus making the advertisements more appealing and informative than plain text messages. It can be even more appealing than TV in some regards. Its rich media content can be created faster than TV commercials, be viewed on demand and be accepted or rejected by mobile device users (John et al, 2009). Unlike SMS (with 160-character-per-message limit), MMS has no size limit. However, it requires the high transmission speed that is suitable only for mobile devices with 3G (third generation) or later technologies.
These ads include mobile banner ads and rich media mobile ads (RMMAs). They can be served on or off mobile devices and inside web browsers or in-app.
How Display Ads Are Served
On-device vs. Off-device
Mobile display ads are for the most part served as on-device ads – being delivered onto the mobile devices themselves. They are quite similar in format to those ads delivered to desktop PCs (e.g., text links, banners or video pre-rolls, which is a short video ad playing before the selected video). They can also be delivered as off-device display ads (e.g., a print magazine ad with a QR code) featuring a call-to-action on mobile devices (e.g., once scanned by a mobile app, the QR code leads to an in-stream product video). This is similar in effect to a click-through on a banner ad or a direct-response to an on-sale print flyer.
An example of mobile advertising with off-device displays is a campaign by Turkish Airlines during the 2012 London Olympic Games. The campaign tried to reach a large number of visitors from around the world coming for the Games and gained their attention that Turkish Airlines served over 200 destinations worldwide. It created a kind of scavenger hunt by transforming 73 national flags into QR codes and placing them on digital posters at 94 bus shelters throughout London. Fans were encouraged to scan their way through London as they waited for a bus. Upon scanning a “national flag” QR code, they were automatically checked-in with that flag via the Turkish Airlines mobile website. Upon check-in, the mobile site allows participating fans to check the total number of check-ins and the number of check-ins per country, and to find on a map the other bus shelters with the poster-size QR codes. Top participants in term of check-ins would then be entered into a drawing for two tickets to any destination served by Turkish Airlines. Below are some images related to the campaign and a link to an online video explaining how the campaign worked.
Unlike their off-device counterparts, on-device mobile display ads are served straight onto mobile devices. They typically use banners and text links that appear on a mobile web page or mobile application.
In-browser or In-app
Mobile banner ads can be served via mobile web browsers or mobile apps. For the whole world, the split is roughly even – 48.1 percent via apps vs. 51.9 percent via web browsers. In North America (the US and Canada) and EU5 countries (the UK, France, Germany, Spain and Italy), the split is skewed toward mobile apps – nearly two-thirds of the ads are served via mobile apps (62.6 and 62.4 percent, respectively) and slightly more than one-third via web browsers (Perez, 2012).
Mobile browsers are set to automatically load mobile websites, which should be designed to load quickly, fit content to smaller screens and accommodate a wide gap in computing power among mobile devices, ranging from smartphones and media tablets to basic cell phones. Smartphones with a high-resolution screen can handle visually rich ads with ease while legacy mobile phones with fewer resources may be limited to simpler ads being designed for a small, low-resolution screen. Media tablets having a larger screen and more computing power can typically display desktop websites without difficulty.
Banners can also be served inside mobile apps. For RMMAs, however, the process of serving them in-app is not as straightforward as serving them in web browsers. There is no single coding standard for how mobile apps need to handle ads. Each app therefore has its own ad specifications. An ad coded to run in one particular app (e.g., CNN) cannot run inside another app without some recoding to meet the latter’s ad specifications. That takes time and money, especially in case of RMMAs. So until there is some industry standard, this limitation will remain a hurdle dampening the growing popularity of in-app RMMAs.
Mobile Web Banner Ads
These ads are often designed as a still image in some common graphic formats (e.g., jpeg or PNG) to ensure its proper display across various mobile devices and ad serving networks. Like banners on the “desktop” Internet, they are typically “clickable”. Once clicked (or actually “tapped”) on, they enable users to take some actions, e.g., going to a mobile website or downloading a mobile app.
Banners come in many different sizes, with mobile banners having more variations than desktop banners so as to accommodate a large variety of screen sizes on mobile devices. There are several screen resolutions for the iPhones alone – 320×480 on the older iPhones, 640×960 on the iPhone 4 and 640×1136 on the iPhone5. On the Android platform, there are many more devices with so many different screen sizes, e.g., 480×800 on the Samsung i9000 Galaxy S and Google Nexus S, 720×1280 on the Samsung Galaxy Nexus, just to name a few. To that one can add a number of media tablets, each with their own screen size, e.g., 1024×768 on the iPad 1 and iPad 2, 2048×1536 on later iPad models with retina display, 720×1280 on Google Nexus 7, 1024×600 on Amazon Kindle Fire, 1280×800 on Samsung Galaxy Tab 10.1inches, and so forth. As a result, the mobile advertising industry currently uses over 60 unit sizes for banners. To reduce that to a smaller, more manageable number, the Mobile Marketing Association (MMA, 2011) recommends nine sizes ranging from 120×30 to 320×50, plus four text taglines options ranging from 10 to 24 characters per line.
There are banners that are designed to fill the full width of the screen regardless of screen size. Known as smart banners, they help address the screen fragmentation caused by the proliferation of mobile devices with different screen sizes and resolutions. They can detect the screen size of the device and its orientation (i.e., portrait or landscape) and render the ads accordingly.
Rich Media Mobile Ads (RMMAs)
Banners can also contain rich media design elements. The term rich media refers to a variety of dynamic motion or digital interactive media, including videos, 360-degree image spins, animation and zoom imagery; the dynamic motion occurs at certain points on a timeline or in direct response to user interactions (other than click-through). The most common design element for RMMAs is to create them as expandable banners, which can expand across the whole screen in response to user action, creating a larger surface area for the display of information and further interactions. Two thirds of RMMAs are expandable banners; the remaining third includes interstitials (21 percent) and animated banners (12 percent). Interstitials, a.k.a. “splash page”, are ads that take up the whole screen. They run before a mobile web page loads, in between two content pages or in between levels of a game.
Below are images of an expandable mobile banner ad for Vicks DayQuil and NyQuil cold remedies, which are designed by Medialets, and a video clip showcasing it. The ad runs at the height of cold and flu season inside the Yahoo! Fantasy Football and CBS sports apps. Tapping on the banner expands it into a full screen ad, which invites users to play the Dayquil or NyQuil version of the “Cold Symptom Knockdown”– a football-themed game of target practice. In the game, users are given 10 chances to knock down 5 “symptom” targets and presented with the option to play again, allowing numerous attempts and creating further brand awareness. The in-ad game experience allows users to interact with the Vicks brand in a new way, without having to exit the app.
RMMAs are typically displayed in two stages: “display” and “activation”. They are initially displayed just like a still-image banner. Only upon user activation (by tapping or swiping on a banner ad, or flipping between pages of a magazine app) are the rich media features showcased. The addition of motion and multimedia features (e.g., videos) makes these ads attractive and eye-catching, thus leading to high engagements, click rates and conversions. Engagement (defined as the percentage of ad impressions resulting in user interactions with an ad) is found to average in the double digits (12.8 percent), with video and gaming experiences being the most engaging (16.6 percent of users respond to a gaming element) (Small, 2012).
Wap 1.0 Banner Ads
At least half of mobile phone users still rely on older cell phones with a small screen and very limited computing power. They can be served with WAP 1.0 banner ads (WAP stands for wireless application protocol). These ads are designed with black-and-white and low-resolution still graphics that can be displayed in a small screen and require little bandwidth to download.
Text Tagline Ads
Text links may also be used in place of graphical ad units. There are many older mobile phones that are not capable of supporting graphical images. There are also publishers who prefer to use text ads instead of graphical ads to lighten up their mobile websites. Text links can be used as stand-alone ads, which are “clickable” and act like banners. They can also be used to supplement graphical banners, typically appearing just below the latter. The Mobile Marketing Association recommends this practice of using text links. Accordingly, some consumers are unfamiliar with mobile banner ads and may not realize that these can be clicked on for navigation. A text link can be quite helpful in such case (MMA 2011). Text links should be phrased in such a way to make the call-for-action clear (e.g., “Learn more”, “Start saving” or “Just get it”). They can also use a tagline – a phrase that sums up the tone and premise of a brand or product – so as to make them more inviting and memorable. Examples of taglines include “Every inch an iPad” (for Apple’s iPad mini), “JUST DO IT” (for Nike sportswear) and “Turn On Tomorrow” (by Samsung).