Will Mobile Live Up to the Hype?

Chances are 2012 will be declared The Year of Mobile — for the 12th straight year. And while there’s little doubt that consumer attention is wrapped up in a dizzying array of devices, the money hasn’t followed. Brands are more often to talk a big game when it comes to mobile rather than open their wallets.

The mobile advertising challenges are known and in many instances being addressed, although not as quickly as many would hope. There’s the creative issue, the constant battle of digital media to adopt tech standards and the nettlesome issue of demonstrating real return on spending. Right now, mobile is coasting on its reputation — and that’s not going to cut in the long term, particularly as the economy continues to struggle.

“We’ve all been to the conferences and read the whitepapers, and everyone’s still talking about the numbers, about the growth of mobile. We need to start talking about and sharing real-life case studies,” said Dirk Rients, management director, mobile platforms at Draftfcb.

According to Rients, most brands are still reluctant to “pull the trigger” on mobile, despite substantial and growing interest. They’re talking about it, but tend to be conservative and stick with the channels they’re comfortable with, such as TV and print. “It’s an education piece. … It falls on the agencies and the brands to share information around what’s working and what’s not,” he suggested, which could help turn some of that chatter into budget.

While he acknowledged that agencies have a major part to play in that education — and in demonstrating ROI, of course — Rients suggested that brands should also take it upon themselves to invest more effort in understanding the channel. He noted that those arriving to the party early are already finding success. “They need to dedicate resources. For big brands, having just one person focused on mobile just isn’t going to cut it,” he said, adding, “It’s in their interests to get ahead instead of being reactive.”

Paul Gelb, vp of the mobile practice at Razorfish, agreed to some extent but suggested brands are often being let down by their partners. “Some creative agencies either don’t understand the space, or just don’t do mobile well,” he said.

Gelb also noted that some of the larger agencies just aren’t incentivized to promote mobile over other mediums. “They’re not suggesting clients shift budget to mobile. They’re focused on reducing costs, and doing something new requires investment in a new talent set. … If they’re not bringing mobile to the client, the client isn’t seeing it,” he said, adding, “brands need to look at their relationships with agencies and think about whether they have the right teams in place there.”

One glaring opportunity being overlooked by many brands is the link between TV and mobile devices, for example. Advertisers continue to tip the majority of their branding budgets into television, despite the fact that smartphone and tablet devices are increasingly commanding users’ attention during commercial breaks.

“This is absolutely a big opportunity for brands. TV performance is declining as audiences go elsewhere, but mobile is a great way to take that ad spend and to significantly enhance it,” Gelb suggested, adding that Razorfish is in talks with a range of clients about the possibilities the relationship between the two screens opens up.

To date, brands have invested much of their mobile budgets in applications, to varying degrees of success. The days of “build it and they will come” are long gone, though, owing to the plethora of branded content now floating around in application stores.

Despite that fact, agencies continue to spend, often without strategic consideration. “Everybody wants the big shiny object. In this day and age, you can do something similar in a rich-media ad as you can in app, and probably spend less,” Rients said, adding, “If you want your app to be in the top 25 you need to spend about $1 million in media to get it there anyway.”

Gelb also predicted that brands will shift their focus from apps to media as the medium matures. “Mobile is still pretty new. Over time that budget will shift to ad spend,” he said.

Ultimately, though, mobile’s continued lack of brand traction is largely due to its immaturity. The medium is well on the radar of most advertisers thanks to the increased hype that has surrounded it over the past two years, and it’s inevitable that budgets will continue to grow. As Gelb phrased it, “It’s not that the pipes are broken, it’s that they’re just being built.”

As part of Vizu’s sponsorship of this series, Digiday shot videos with industry leaders to discuss the main challenges that have faced the Web when it comes to branding. In this video, Ken Solano, digital strategy supervisor, discusses the risks and rewards of brands building on top of tech platforms.