Vikas Gulati spearheads business development at Vserv.mobi for South East Asia. Based in Singapore, he is responsible for driving key aspects of business – developers, publishers, and advertisers. He can be reached on Twitter, @vikasgulati. Disclosure: Vserv was a sponsor of our Bandung Hackathon event last year.
As consumers rapidly move to mobile, here are the top trends that will drive mobile advertising and take centre stage in 2013:
1. Android will continue to be the “mass market” smartphone momentum
Everyday over 1.3 million Android devices are being activated, with most of them priced for the “mass market.” In 2013 Android will cross an install base of one billion users. That’s a truly massive number. Windows Phone 8 launched last October amid a lot of fanfare, and there are other new platforms in the news such as BB10, Ubuntu Mobile, and Tizen. But the Android/iOS duopoly will continue given the head start these two platforms have. We will see new operating systems and platforms chip away small shares but there is nothing on the radar that will make a significant dent in the ongoing Android momentum. Over the long term, it may be a different story but this is unlikely to change in 2013.
2. Mobile advertising will get smarter
The surging app ecosystem has not gone unnoticed by marketers. Mobile internet traffic is booming across the globe and it is now clear that the mobile internet will grow far bigger than the ‘desktop internet.’ Advertisers today are now adapting their campaigns to connect with consumers. While the buzz is mostly about smartphone advertising, soon you will see marketers leveraging the broader mobile ecosystem. Internet-enabled feature phones still dominate emerging markets, and advertisers will have to invest time evaluating mobile habits and behavior patterns in order to create smarter campaigns.
3. Freemium will flourish: In-app purchases and ad-based revenue in parallel
Developers using the classic in-app purchase models to monetize are seeing that only 10 percent of their app users make paid transactions. With an increasing number of app users coming from emerging markets, this conversion rate will drop even further. While emerging markets have a high mobile penetration, the GDP per capita is much lower and credit card penetration is only in single digits. More developers will work to monetize the remaining 90 percent of their app user base by plugging into telco billing for micro-transactions, or use powerful mobile advertising solutions. 2013 will see such premium apps come into the mobile advertising foray and advertisers will benefit from being able to target the premium audience of these apps and games.
4. Mobile ad ecosystem further fragments, with new players, new models, new forms of mobile advertising
We are already noticing traditional online advertising networks trying to extend their footprint to mobile. As mobile platforms become a part of mainstream media, this trend is likely to continue. At the same time, network operators who missed the mobile advertising bus are still looking to get back into the game and cash in on opportunities, especially in emerging markets. We have seen Singtel making such moves last year. In 2013, we will see more action and partnerships as companies dive further into the rapidly growing mobile advertising industry.
New business models and forms of mobile advertising will become popular. Tablets will start contributing significant inventory to the overall mix and new engaging formats will emerge. Overall, display advertising on mobile will grow exponentially as a result!
5. Consumers’ mobile lifestyle will allow brands to converge advertising, distribution, and transactions!
Mobile is fundamentally altering consumers’ lifestyle today, changing how we live, work, and play. Over the past few years brands have tried to integrate mobile as part of their overall media mix. In 2013 they will have the opportunity to take it to the next level, leveraging mobile for all the four Ps of marketing! Marketers are now realizing that mobile means ‘place-shifting’ purchases, i.e. purchase decisions are not happening at a physical store but in the hands of the mobile consumer. Combined with micro transaction capabilities of mobile, m-coupons can alter the pricing paradigm with hyper-segmented offers! As more and more consumers use their devices for making purchasing decisions they previously made offline, the lines between advertising, distribution, and transaction will blur.
6. Video on mobile will explode
The latest trend in online video is the rise in mobile viewership. As consumers get used to watching more and more videos on their devices, publishers will significantly increase the distribution of video content on mobile. This will also present a unique opportunity to brands to leverage the mobile platform for video advertising. Given the popularity of video ads online, mobile video advertising will become widely accepted in 2013 as advertisers realize the benefits of targeting consumers on the go.
7. Mobile performance marketing will go mainstream
Much of the work in mobile advertising has been focused on rich media formats and app creation. However, as mobile advertising now begins to go mainstream, the focus will also shift towards performance. Mobile, like all digital media, is highly measurable, and advertisers will be looking for response/outcome focused campaigns such as leads, acquisition, or any other definitive actions that enhance the ROI of the marketing budgets.