Gap between mobile use and spend is growing: Forrester
By Chantal Tode
January 14, 2014
Marketers are assigning mobile to in-house agencies
While many media companies and retailers are expected to see more than 50 percent of their traffic coming from mobile devices, most will not be able to shift their priorities and resources to keep pace, according to a new report from Forrester Research.
Forrester reports that half of digital professionals are spending less than $1 million annually on development costs, not nearly enough when a transactional application can cost up to $2 million annually and a marketing app up to $500,000. To address the discrepancy between mobile use and spend, marketers must focus on how mobile benefits customer value, brand engagement, business impact and mobile agility to convince their bosses to reallocate budgets.
“Mobile is rightly primarily perceived as a loyalty channel for now – a way to increase customer engagement or improve customer satisfaction -not so much as an acquisition tool,” said Thomas Husson, Paris-based vice president and principal analyst of the marketing and strategy client group at Forrester as well as a co-author of the report.
“Also, a lot of the available inventory comes from apps that lack integration with more traditional mobile web technology standards,” he said.
“I think we will see a shift of mobile ad inventory to programmatic and mobile RTB but we still lack an industry-accepted – non-cookie standard to offer massive reach. The good news is that we will see in 2014 more and more mobile ad-centric formats offering more rich-media opportunities. In short the mobile ad industry is starting to mature and we’ll see some more consolidation in the space.”
Over-hyped tech questions
Marketers need to think less about if Facebook FBX will extend to mobile and more about creating a mobile advertising strategy that leverages mobile’s unique context and formats, according to the report, “Predictions 2014: Mobile Trends For Marketers”.
Many technology-focused questions in mobile are over-hyped and distract marketers from the important questions, such as how to test new ad formats and compare their ability to offer better-targeted mobile experiences, per the report.
In 2014, Forrester expects new mobile-centric ad formats to emerge and more effective mobile video inventory, driven by improvements in user identification although an industry-wide standard will still remain elusive.
Other key predictions from the report include that most companies will not differentiate their tablet and mobile phone experiences despite growing evidence that the use cases are diverging. Additionally, marketers will fail to leverage the convergence of mobile and social. Forrester recommends marketers learn from other brands’ early experiments.
Wearables will not move past a niche market in 2014, according to the report. Even so, this is the time for marketers to begin to experiment with experiences for these devices.
Forrester expects 2014 will be the year that companies increase their mobile investments and lay the foundation for mobile to transform their entire business.
In 2014, there will be more than 2 billion smartphones globally, making mobile the new digital hub and a bridge to the physical world.
As companies move to re-engineer their processes, platforms and organizations to address the new mobile society, several trends will emerge.
Expect the intersection of mobile and the physical world to emerge as a top priority, with success being driven by the ability to leverage mobile to enhance the customer experience within physical spaces.
To effectively address this trend, companies need to expand the role that mobile plays throughout the organization, prioritizing efforts based on the impact on customers and the business. Forrester recommends companies work with cross-functional teams to understand and plan how mobile can improve customer and employee processes by enhancing in-store, in-airport and on-premises experiences.
Companies will need to leverage big data and analytics more effectively in order to effectively capitalize on mobile, which is transformative only if consumers are engaged in the exact moment of need with the right services, content or information. This means understanding consumers’ context as well as insights gleaned from data over time.
For example, combining real-time analytics with push notifications or in-app messages can be a powerful way to deliver contextualized experiences.
Mobile-driven insights will become more sophisticated, with companies beginning to leverage mobile to help them understand consumers in physical environments as well as digital ones.
Marketers must use mobile data to enrich what they know about specific customer segments to better target them via other marketing tactics, both online and off.
Forrester recommends that marketers look to China, where mobile adoption is happening quickly even as the infrastructure is slow to keep pace, for inspiration.
Forrester also expects 2014 will see a continuation of high-value initial public offerings for media companies based on mobile. The difference in 2014 will be that some of these companies will have mobile revenue streams already in place and have the potential for even bigger valuations.
For marketers, this means it important to have a plan in place for how to staff up to support their long-term strategic shift to mobile.
“Most marketers are not yet fully prepared to analyze and act upon the fantastic insights they can gather from mobile devices,” Mr. Husson said. “Back in 2013, only 49 percent of marketers we interviewed had a mobile analytics solution in place.
“Hopefully, many more will join in 2014 but this is not just about having the solution in place, this is how you connect it to your CRM and business technology systems to be able to deliver contextual services,” he said.
“In addition, mobile is a key driver of big data.”
Chantal Tode is associate editor on Mobile Marketer, New York