Mobile advertising is taking off. Billions of ad impressions every month are generated on mobile apps, mobile landing pages and mobile pay per click. And until now, most affiliates in the US were locked out of this market, because all the major CPA based networks have been located in Europe and Asia. The market here in the US was not large enough to be able to scale to the numbers that larger brands can measure, but that is changing.
The smartphone (iPhones, Droids, Blackberry’s , Windows 7 mobile devices, etc.) is now 20% of the mobile handset pie accounting for 45 million US users according to comScore, and in the next 24 months, that number is likely to reach 40 to 50% of the market in the US. There are 26 million iPhone and Android devices in use in the US alone, and 40.8 million worldwide, according to an AdMob Report.
As “feature phone” contracts come up in the next 18 to 24 months, carriers such as AT&T, T-Mobile and Verizon will undoubtedly want to sell more mobile data packages that come with the smartphone. This can represent a nudge of 15% profits increase to them. Already we have seen a 21% increase in smartphone ownership just between the 3 Month Period of Sept, Oct. and Nov. 2009 and the 3 month period of Dec., Jan., and Feb 2010 according to comScore. And the trend will continue. Android installs are at 100,000 a day according to Internet News. New iPhones are selling at the briskest pace ever, and RIM is selling record numbers of Blackberry devices, and with the massive launch of Microsoft’s Window 7 Mobile Phone, due out later this year it is a perfect storm for mobile internet usage to skyrocket.
And this will result in more ad impressions being created. This is the basis for a hollowing of the mobile ad market, such as we saw in the late ‘90’s, when CPM rates hovered between $25 and $50. Companies based their projections on those numbers, investors flooded money in because the profits looked unending and consumers bought hundreds of millions of computers and hooked up their phone lines to the internet. Thus the end result was a commoditization of the online ad market due to the increase in supply; more ad impressions from more people going online. Prices for CPM dropped to $0.75 to $3.00 in the span of a year and deflated the boom. This was the bust of the early 00’s.
In mobile we are seeing the same trend today, although lessons learned from those days are being injected into mobile’s accelerated growth. Today we are seeing carriers building out network capacity faster than they can roll out new handset models. All in anticipation of increased mobile data usage in the US. And what does that mean, well, almost a parallel in the bust of the early 00’s, CPM rates will tumble, and mobile networks will be looking at the “performance” model as an attractive way to shore up their bets on ad purchases.
For affiliates this means opportunity is knocking with a sledgehammer. The mobile space is rally wide open right now, and looks to remain that way. Mobile is not exactly like the web. There are ground rules, as with any game.
Rule #1: The web is used differently when on a mobile device.
This is relatively easy to swallow. Look at your own behavior on the mobile web. It is usually short bursts of information gathering. Much of the activity is centered around local searches such as addresses, what is nearby and so on. Research is normally not done on a mobile device. Who wants to read a tiny screen and use a tiny keyboard for anything other than the most “important at the moment tasks”. The one anomaly is apps. People spend quite bit of time with their apps and are exposed to a lot of banner and text ads. Mobile games also attract a fair amount of time wasting. Make sure to respect what the end user is doing when designing a mobile media campaign.
Rule #2: Mobile is not the place for long.
Long is the killer in mobile. Think of it as Twitter on steroids and where only the MOST relevant content gets read. This is why social media (friends), sports and travel are some of the top categories that account for mobile web usage. Make sure to design for minimal space and maximum impact.
Rule #3: Local, Local, Local
If you can reach local, you will close more sales. Local business searches seem to be the most popular. If you can be relevant locally your chances of success are greatly improved. Engaging on a local level can also win you SMS clients, who are very loyal and usually a very high close ratio.
The real story for affiliates is that mobile is wide open. SEO in mobile is just at the beginning stages and there are a multitude of portals that have not yet been established in the mobile side of the web. The opportunity for affiliates to capitalize on this gap will not last long as more and more players enter the market every day.
Here are some valuable resources that should help any affiliate marketer with understanding the mobile web.
AdMob Metrics – AdMob is one of the largest mobile ad Networks, and was just acquired by Google, their research is a must for anyone trying to figure out this market:
Smaato Metrics– The leading Mobile Ad Optimization platform. Smaato is the best kept secret for affiliates to find targeted traffic for campaigns. They also publish a fair amount of data on the mobile web.
Mobile Marketing by Cindy Krum – Cindy is the undisputed madam of mobile. She is about as far ahead of the curve as you can be in mobile SEO. A must read if you have any desire to master the mobile web from a search standpoint.
OfferMobi Network – The fastest growing US based mobile affiliate network has released tools that will allow you to emulate sites on a number of different handsets, see how mobile search differs from desktop search and a myriad of other useful tools for developing mobile landing pages.
I must disclose that I am the VP Business Development for OfferMobi. If you are interested in becoming an affiliate, please apply here. If you are an advertiser looking to increase your reach into mobile, we also operate a full service mobile ad agency and can open up your marketing to the world of mobile performance marketing. Contact me at firstname.lastname@example.org.