Milestone Group Quarterly: April 2008
Articles
By Invitation:
Mobile Advertising Measurement by Chetan Sharma
In 1996, Nicholas Negroponte first described the digital footprint as "the slug trail" (in Being Digital) on the Web. More than any other device on any other media, mobile devices can capture the daily activity stream. Turning the mobile digital footprint into a consumer's "declared intent" may be more achievable in mobile than in almost any other media, except perhaps for interactive TV.
Reaching the full power of this declared intent has been the Holy Grail of advertising for decades. As John Wanamaker (considered the father of modern advertising by many) famously stated, "I know that half of my advertising dollars are wasted... I just don't know which half."
Measuring its effectiveness has been an issue since the early days of advertising. The Wanamaker quote speaks to the reality that many marketing programs are not easily justified on basic return-on-investment (ROI) measures; and that advertising, in particular, ends up being a leap of faith because it is expensive and its direct benefits are difficult to quantify.
Measuring the actual impact of a campaign has been a constant challenge, as stated by John Coulson, Vice President of Research at Leo Burnett Company: "As I see it, this is where we stand. We measure the sales effectiveness of ads or commercials on their ability to attract attention and communicate, or on their ability to affect attitudes, or on some combination of these and we hope, and have some evidence to indicate, that we are really measuring the sales effects of the advertising."
With the advent of Internet advertising, things have become more transparent and, we dare say, measurable. Indeed, search advertising is all about results, and the ad dollars only get spent when there is some measurable user action. Yes, there are still issues with the model because of click fraud and lack of openness on the part of some players, but Internet advertising is a substantial improvement over past media.
Indeed, a new generation of advertising pioneers and thinkers is promoting the new medium that gives some control to the consumers. The current TV advertising model is pretty much broken, as it is seldom targeted and often reaches unintended audiences.
Although the Internet is a vast improvement over traditional advertising avenues, it is something of a broken model in its own right. Users know how to ignore ads on their big screen monitor, so the pressure to create engaging ads is high. There is a Firefox browser plug-in that replaces ads with artwork. Targeting is minimal in display advertising because the same computer could be in use by multiple people, the user's delete cookies might intercept the ad, profile information might be lacking, and so on.
As an advertising medium, mobile's forte includes targeting, context, and measurements. The mobile device is the most personal of all mediums: tracking data is virtually guaranteed, the availability of location adds context; and yes, you can measure the heck out of your campaign. All the pieces are in place to make a viable medium for the advertisers.
As the industry matures and the structural elements fall into place, phone undoubtedly will become the most preferred advertising medium, especially in targeting the youth segment. One-on-one tracking allows granular user profile development, which enables great understanding of user behavior both individually as well as in a clustered population, so as to fine-tune the marketing message to almost absolute certainty. Thus, effectiveness of campaigns increases tremendously. Advertisers will know the expected return from campaigns as well as exactly which half or what percentage of their budget was wasted.
The value of mobile measurement starts by answering the most basic and fundamental question: Did the person watch the ad or not? In mobile data, almost everything gets logged and measured. Although mobile will, no doubt, have its own set of issues concerning measurement, it offers the potential for accurate insight starting from exposure to persuasion, to transaction.
When mobile phones become payment devices (as they already are in South Korea, Japan, and Scandinavia), the impact or the effectiveness question will be answered at the finest transaction detail possible. Operators play a significant role in enabling the measurement ecosystem for mobile advertising, although Internet brands are extending their online measurement capabilities to mobile. But they also face significant challenges in pulling things together to be effective.
Companies like Nielsen Mobile and M:Metrics are also using both mobile metering applications on the phone and surveys to accurately measure the exposure and impact. In terms of variables tracked, it will evolve and be based on the channel and the goal of the campaigns. A five points framework of Reach, Engagement, Targeting, Viral, and Transaction can help define the parameters that are important in mobile advertising:
Reach and frequency: For unique user and the number of impressions for those unique users.
Rich media: Measurements for video and audio that enable completion rates, time viewed, interaction rates, replay counts, and viral measures for counting how many people it was sent to.
Direct response: Click-through rates (CTR), cost per click (CPC), cost per lead, and cost per sale, transaction, or customer acquisition.
Branding measurement: Aided or unaided brand awareness, ad recall, message association, purchase intent, and purchases or transactions.
Mobile enables other media, such as print, television, and radio to be interactive. This interactivity enables metrics far better than the previous generation of measurements. Campaigns that were once not measurable (to the degree which mobile interactivity enables it) are now highly measurable. The interactivity is an engagement breakthrough for the consumer, and the metrics are a major step forward for advertisers and brands involved.
Chetan Sharma is president of Chetan Sharma Consulting and co-author of 5 books on wireless related topics. This article is excerpted from the just released book "Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market" (John Wiley, 2008) by Chetan Sharma, Joe Herzog, and Victor Melfi.
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